Dying prematurely - life interest/interest in posession
Discussion
I've recently found out that I'm not likely to live anywhere near as long as I'd expected. Unfortunately, when I was diagnosed, my wife and I had started the process of separating. Ideally, I'd have left the marital home in a trust so that she would benefit from the use of the asset until her death, and it would then revert to my children. Initially, the diagnosis was months to live, and we'd agreed to stay together until I died.
However, a new consultant believes that I have years, rather than months. If this is the case, we'd want to separate, and each buy new homes. It's very unlikely that we'll divorce in my lifetime. If we separate, and each buy a home, am I still able to leave mine in a trust with her as the beneficiary of the life interest?
The marital home isn't suitable for me to live in alone as my condition deteriorates, and my wife would like to move away from the area we live in, so there is no possibility of me living there until I die and the estate then selling it.
I'm in my early 50s, and have two children from previous relationships. My wife is a fantastic stepmother and a wonderful woman. Our hopes and dreams for the future differed to the extent that we felt we would almost certainly be happier apart, but there is no recrimination or bitterness between us. I trust her implicitly.
I've spoken to a couple of estate planners, but I feel they'd be happier if my case was simpler.
However, a new consultant believes that I have years, rather than months. If this is the case, we'd want to separate, and each buy new homes. It's very unlikely that we'll divorce in my lifetime. If we separate, and each buy a home, am I still able to leave mine in a trust with her as the beneficiary of the life interest?
The marital home isn't suitable for me to live in alone as my condition deteriorates, and my wife would like to move away from the area we live in, so there is no possibility of me living there until I die and the estate then selling it.
I'm in my early 50s, and have two children from previous relationships. My wife is a fantastic stepmother and a wonderful woman. Our hopes and dreams for the future differed to the extent that we felt we would almost certainly be happier apart, but there is no recrimination or bitterness between us. I trust her implicitly.
I've spoken to a couple of estate planners, but I feel they'd be happier if my case was simpler.
s2sol said:
I've recently found out that I'm not likely to live anywhere near as long as I'd expected. Unfortunately, when I was diagnosed, my wife and I had started the process of separating. Ideally, I'd have left the marital home in a trust so that she would benefit from the use of the asset until her death, and it would then revert to my children. Initially, the diagnosis was months to live, and we'd agreed to stay together until I died.
However, a new consultant believes that I have years, rather than months. If this is the case, we'd want to separate, and each buy new homes. It's very unlikely that we'll divorce in my lifetime. If we separate, and each buy a home, am I still able to leave mine in a trust with her as the beneficiary of the life interest?
The marital home isn't suitable for me to live in alone as my condition deteriorates, and my wife would like to move away from the area we live in, so there is no possibility of me living there until I die and the estate then selling it.
I'm in my early 50s, and have two children from previous relationships. My wife is a fantastic stepmother and a wonderful woman. Our hopes and dreams for the future differed to the extent that we felt we would almost certainly be happier apart, but there is no recrimination or bitterness between us. I trust her implicitly.
I've spoken to a couple of estate planners, but I feel they'd be happier if my case was simpler.
Ouch - Hope it is years for you. good to try and sort things soon.However, a new consultant believes that I have years, rather than months. If this is the case, we'd want to separate, and each buy new homes. It's very unlikely that we'll divorce in my lifetime. If we separate, and each buy a home, am I still able to leave mine in a trust with her as the beneficiary of the life interest?
The marital home isn't suitable for me to live in alone as my condition deteriorates, and my wife would like to move away from the area we live in, so there is no possibility of me living there until I die and the estate then selling it.
I'm in my early 50s, and have two children from previous relationships. My wife is a fantastic stepmother and a wonderful woman. Our hopes and dreams for the future differed to the extent that we felt we would almost certainly be happier apart, but there is no recrimination or bitterness between us. I trust her implicitly.
I've spoken to a couple of estate planners, but I feel they'd be happier if my case was simpler.
I think to clarify-
Do you have a will at present? If not it will all go to the wife.
Marital home - Is this jointly owned? Do you have the legal right to say what happens to it?
Do you and wife have any children together? ie does wife have any claim on the house?
How long married? ie does wife have any claim on the house?
Does she look after the house whilst you work/pay the mortgage etc? What contribution does she make to enable you all to live in the house?
Thats the key part as you may find she has a claim to some ownership in any event which may prevent you saying what happens.
Has she agreed she has no claim on the house at all?
The aim -
If you separate and live in separate homes why would you want her to have a life interest in the house? She is living somewhere else a long way away?
Why not leave the house to your children? what is the benefit of your wife moving back in? living there for 50 years and then your children inheriting (assume she is 50 and lives to 100)
You can setup all sorts of trusts but I would recommend to think about why - whats the aim.
Thanks for your reply. I need someone to ask questions like this to clarify exactly what I mean, and what I want.
I currently have no will. We approached someone a few years ago to try to write one, but didn't get on with him, so shelved the idea.
The marital home is jointly owned, and mortgage free.
My wife and I have no children together, and have been married for just over six years.
We've both worked throughout the marriage, and the years we've lived together prior to marrying.
Apologies, I should have been clearer. We've agreed that we'll split the sale price of the house 50:50. It's my half of the proceeds I'd like to leave in trust.
My children are not of an age where I'd be comfortable with them inheriting what is, at least to me, a substantial sum. I predict unwise choices at best. I know I'll be dead, but I'd like them to be mature enough to appreciate that I've worked hard to leave them what could be a solid financial foundation.
It's my belief that my wife could benefit from an interest in trust in a property that I own in many ways. She could, if the trustees feel it appropriate, sell the house and benefit from the capital as long as she lives, or until she remarries, or whatever event I decide will end the trust and trigger the inheritance. I may well be wrong here. Ideally, I'd like her to be able to live mortgage free and retire as early as possible.
I think I have three options.
Leave the entire estate to the children, who may well piss it up the wall.
Leave the house in trust with my wife as the beneficiary until whatever trigger event I choose prompts the children to inherit.
Leave the children and my wife a proportion each, and have the estate pay IHT.
I currently have no will. We approached someone a few years ago to try to write one, but didn't get on with him, so shelved the idea.
The marital home is jointly owned, and mortgage free.
My wife and I have no children together, and have been married for just over six years.
We've both worked throughout the marriage, and the years we've lived together prior to marrying.
Apologies, I should have been clearer. We've agreed that we'll split the sale price of the house 50:50. It's my half of the proceeds I'd like to leave in trust.
My children are not of an age where I'd be comfortable with them inheriting what is, at least to me, a substantial sum. I predict unwise choices at best. I know I'll be dead, but I'd like them to be mature enough to appreciate that I've worked hard to leave them what could be a solid financial foundation.
It's my belief that my wife could benefit from an interest in trust in a property that I own in many ways. She could, if the trustees feel it appropriate, sell the house and benefit from the capital as long as she lives, or until she remarries, or whatever event I decide will end the trust and trigger the inheritance. I may well be wrong here. Ideally, I'd like her to be able to live mortgage free and retire as early as possible.
I think I have three options.
Leave the entire estate to the children, who may well piss it up the wall.
Leave the house in trust with my wife as the beneficiary until whatever trigger event I choose prompts the children to inherit.
Leave the children and my wife a proportion each, and have the estate pay IHT.
Sorry to hear about your issues.
You need to consider worst cases scenarios IMO here. ie your trust in others is perhaps not to be 100% trusted?
If you want to safeguard your kids as well as your wife then you need to do so now..........unfortunately you can't control how people react when you are gone but you can limit their ability to act in a way you wouldn't want.
Sounds like there are enough assets to go round but sometimes that can mean more hassles from the related parties.
I'm sure it could go just fine and everyone plays ball and follows you verbal wishes, equally you hear of one side getting the majority regardless of what's been said before.
I may be being unfair here, but you asked and if it were me I'd be making sure as much as possible the allocation/ideas in my head came to fruition with as much legal protection as possible. Also if you and they are all up for it a open and frank discussion on the topic might help to stop the "it's what he'd have wanted" extrapolation. But then that could cause immediate issues that impacts what time you have left, I'm looking at it from being involved with a similar scenario where such a conversation would I think have been beneficial for the parties.
Someone else might have a story of such a conversation causing rifts, so I'm just rambling!
You need to consider worst cases scenarios IMO here. ie your trust in others is perhaps not to be 100% trusted?
If you want to safeguard your kids as well as your wife then you need to do so now..........unfortunately you can't control how people react when you are gone but you can limit their ability to act in a way you wouldn't want.
Sounds like there are enough assets to go round but sometimes that can mean more hassles from the related parties.
I'm sure it could go just fine and everyone plays ball and follows you verbal wishes, equally you hear of one side getting the majority regardless of what's been said before.
I may be being unfair here, but you asked and if it were me I'd be making sure as much as possible the allocation/ideas in my head came to fruition with as much legal protection as possible. Also if you and they are all up for it a open and frank discussion on the topic might help to stop the "it's what he'd have wanted" extrapolation. But then that could cause immediate issues that impacts what time you have left, I'm looking at it from being involved with a similar scenario where such a conversation would I think have been beneficial for the parties.
Someone else might have a story of such a conversation causing rifts, so I'm just rambling!
s2sol said:
Thanks for your reply. I need someone to ask questions like this to clarify exactly what I mean, and what I want.
I currently have no will. We approached someone a few years ago to try to write one, but didn't get on with him, so shelved the idea.
The marital home is jointly owned, and mortgage free.
My wife and I have no children together, and have been married for just over six years.
We've both worked throughout the marriage, and the years we've lived together prior to marrying.
Apologies, I should have been clearer. We've agreed that we'll split the sale price of the house 50:50. It's my half of the proceeds I'd like to leave in trust.
My children are not of an age where I'd be comfortable with them inheriting what is, at least to me, a substantial sum. I predict unwise choices at best. I know I'll be dead, but I'd like them to be mature enough to appreciate that I've worked hard to leave them what could be a solid financial foundation.
It's my belief that my wife could benefit from an interest in trust in a property that I own in many ways. She could, if the trustees feel it appropriate, sell the house and benefit from the capital as long as she lives, or until she remarries, or whatever event I decide will end the trust and trigger the inheritance. I may well be wrong here. Ideally, I'd like her to be able to live mortgage free and retire as early as possible.
I think I have three options.
Leave the entire estate to the children, who may well piss it up the wall.
Leave the house in trust with my wife as the beneficiary until whatever trigger event I choose prompts the children to inherit.
Leave the children and my wife a proportion each, and have the estate pay IHT.
its a stressful time I bet. always good to chat whats the aim and then work out if you can do it.I currently have no will. We approached someone a few years ago to try to write one, but didn't get on with him, so shelved the idea.
The marital home is jointly owned, and mortgage free.
My wife and I have no children together, and have been married for just over six years.
We've both worked throughout the marriage, and the years we've lived together prior to marrying.
Apologies, I should have been clearer. We've agreed that we'll split the sale price of the house 50:50. It's my half of the proceeds I'd like to leave in trust.
My children are not of an age where I'd be comfortable with them inheriting what is, at least to me, a substantial sum. I predict unwise choices at best. I know I'll be dead, but I'd like them to be mature enough to appreciate that I've worked hard to leave them what could be a solid financial foundation.
It's my belief that my wife could benefit from an interest in trust in a property that I own in many ways. She could, if the trustees feel it appropriate, sell the house and benefit from the capital as long as she lives, or until she remarries, or whatever event I decide will end the trust and trigger the inheritance. I may well be wrong here. Ideally, I'd like her to be able to live mortgage free and retire as early as possible.
I think I have three options.
Leave the entire estate to the children, who may well piss it up the wall.
Leave the house in trust with my wife as the beneficiary until whatever trigger event I choose prompts the children to inherit.
Leave the children and my wife a proportion each, and have the estate pay IHT.
I used to do probate a long time ago so anything I suggest will need to be checked by an up-to-date lawyer.
so the house is 50/50.
the rest of the estate ie cash and other assets - easy leave in a will. Get something simple drawn up saying I leave all of my estate and assets to my children and name them otherwise if you are run over tomorrow it will all go to your wife.
this gives you a bit of time to then work out a better split/wish in another will.
The biggest issue is likely to be that your wife will want the house sold so you both can go your separate ways so she can free up her 50%. Is this not the plan?
If she has a life interest in YOUR 50% thats more of a restriction on her if she has already moved out? I can't see the benefit to her.
Will you will want to live there for as long as you can? She may require you to sell asap to help her fund her new life? If she agrees for you to stay will she want 50% rent etc?
What normally happens is that your children are left via the will your 50% - the property is sold to realise the cash or bought out.
As you are splitting earlier than death then the house really should just be sold. You can then leave whatever to your own children.
If your children are over 18 then you wont be able to restrict in a will/trust the age they can inherit or what they do with it.
You could pay into a pension for them which would have a similar effect during your lifetime but you need the cash to do so hence selling your 50%
I may be looking incorrectly at your aims?
My aims are to give my wife some financial help after I die, and once my wife dies, the balance to pass to my children. Another aim is to limit the lump sum the children will get until they can be trusted not to piss it up the wall. One is over 18, the other is likely to be 18 before I die. The separation issue is possibly a red herring. We won't divorce, so we'll still be spouses.
s2sol said:
My aims are to give my wife some financial help after I die, and once my wife dies, the balance to pass to my children. Another aim is to limit the lump sum the children will get until they can be trusted not to piss it up the wall. One is over 18, the other is likely to be 18 before I die. The separation issue is possibly a red herring. We won't divorce, so we'll still be spouses.
Some good aims. As mentioned you cant stop beneficiaries (your children) from doing what they like with an inheritance if 18+ - you can ask, give guidance etc but cant be enforced.
Financial help to wife - is good but I would keep it as cash rather than any sort of life interest in 50% house - its a very messy and blunt way of just giving some cash in your will. Have you asked her what she would prefer?
as mentioned before I cannot see it as a benefit to her to have life interest in half a house when she is not living there. Even if you grant this - she may decline this or just end it after a short period of time.
its a source of conflict between your children and her. I dont think this will achieve what you want.
If me Sell up, split the house money, if you have any excess fund pay into or set up a pension for your children.
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