How to deal with complicated finances if a partner dies
Discussion
Due to a recent death in the family I know I need to do some serious planning in case the worst should happen! It was bad enough sorting some basic finances out, but ours are complicated.
My partner and I are not married, but we have 2 kids. Our wills were written about 5 or 6 years ago when I was PAYE, with 1 house, 1 mortgaged, so a pretty standard life. Our lives have got quite complicated since then, as I now work for myself (Ltd Co) and we have a few other investment properties, some owned individually, some joint, some mortgaged, some not.
We have an appointment on the 20th to see a solicitors to do new wills, however my partner is quite concerned that she doesn't understand our finances. She does the books for my company, but just that. She wouldn't know the differences between the various taxes (Company vs personal etc.) as I deal with that. I also have various bank accounts to deal with household bills, BTL stuff.
I've said I will write a document detailing the "What if I was hit by a bus tomorrow" scenario, only to realise I don't actually know what has to be done beyond she will get inherit it, and there will be a ton of tax to pay!
So far I've detailed all of my bank accounts, the company accounts, the accountants contact details etc. I now need to detail what she would need to do, and in what order. Assuming I've suddenly died, what does she need to do (and what documentation is needed) to deal with:
1. A Ltd Company with me as the sole Director (money still going in/out, and certainly tax to pay)
2. Property in my name only (with mortgages)
3. Property in joint names
4. Bank Accounts in my name
5. My Pensions (she’s already registered as the recipient if I died)
6. The inevitable huge tax bill.
One thing I have done is get the accounts that pays our bills, and the BTL bills into join names, that way only my personal accounts would get frozen, and there is never much in there.
Ideally I could tell her to contact a professional to sort the complicated stuff out and work out tax liabilities etc. I assume that if my life was reasonably simple then it could be a solicitor, but as there is a Ltd company involved my accountant would need to part of it. What’s the best way to approach this?
I'm sure a lot of these questions will be answered by my solicitor, but it would be good to have a lot of this clear (or at least an idea) in my mind before I go to the initial appointment.
My partner and I are not married, but we have 2 kids. Our wills were written about 5 or 6 years ago when I was PAYE, with 1 house, 1 mortgaged, so a pretty standard life. Our lives have got quite complicated since then, as I now work for myself (Ltd Co) and we have a few other investment properties, some owned individually, some joint, some mortgaged, some not.
We have an appointment on the 20th to see a solicitors to do new wills, however my partner is quite concerned that she doesn't understand our finances. She does the books for my company, but just that. She wouldn't know the differences between the various taxes (Company vs personal etc.) as I deal with that. I also have various bank accounts to deal with household bills, BTL stuff.
I've said I will write a document detailing the "What if I was hit by a bus tomorrow" scenario, only to realise I don't actually know what has to be done beyond she will get inherit it, and there will be a ton of tax to pay!
So far I've detailed all of my bank accounts, the company accounts, the accountants contact details etc. I now need to detail what she would need to do, and in what order. Assuming I've suddenly died, what does she need to do (and what documentation is needed) to deal with:
1. A Ltd Company with me as the sole Director (money still going in/out, and certainly tax to pay)
2. Property in my name only (with mortgages)
3. Property in joint names
4. Bank Accounts in my name
5. My Pensions (she’s already registered as the recipient if I died)
6. The inevitable huge tax bill.
One thing I have done is get the accounts that pays our bills, and the BTL bills into join names, that way only my personal accounts would get frozen, and there is never much in there.
Ideally I could tell her to contact a professional to sort the complicated stuff out and work out tax liabilities etc. I assume that if my life was reasonably simple then it could be a solicitor, but as there is a Ltd company involved my accountant would need to part of it. What’s the best way to approach this?
I'm sure a lot of these questions will be answered by my solicitor, but it would be good to have a lot of this clear (or at least an idea) in my mind before I go to the initial appointment.
Steve Campbell said:
I'd do as much as possible to simplify rather than provide answers as to how to deal with the aftermath ! Sounds like you've started that with joint accounts....but still have an account only in your name ....what for ?
There are 3 accounts in my name only1. My current account, so just my monthly spending money
2. The company account (technically the company name, but I'm the sole director)
3. A mortgage offset savings account. The mortgage is in my name only so the account has to be me.
desolate said:
There really is no need for there to be a large tax bill, unless the properties are worth an absolute fortune and even then there are ways particularly if you are still young.
As a general point it is worth keeping a summary of everything you have one the go so that someone can refer to it if you are incapacitated. A sort of idiots guide.
If your estate is very substantial then you should pick a good lawyer and make sure your expression of wish is updated regularly.
Its not substantial, however it needs to be organised. I'm doing the idiots guide, however I'm not a legal or financial expert. I have to guide my partner on what to do if I'm not aroundAs a general point it is worth keeping a summary of everything you have one the go so that someone can refer to it if you are incapacitated. A sort of idiots guide.
If your estate is very substantial then you should pick a good lawyer and make sure your expression of wish is updated regularly.
Robertj21a said:
Also consider taking out mutual Power of Attorney documents (in case of stroke or other incapacity). People know about Wills etc, they forget about incapacity.
That is very high on the list to be sorted. My partners father died 6 months ago and had refused Power of Attorney. He was suffering from mild dementia but still ok enough to tell us what he wanted (bills paying etc), and we did it. The big problem was her mother has severe dementia so when her father died she inherited anything they had, which was immediately inaccessible doe to her mothers dementia.We had no way of knowing what money/income they had, or any way to pay the bills. The care homes started sending us the bills. We're talking bills of thousands of pounds when someone earns a couple of hundred per week from a part time job!
Eric Mc said:
Inheritance Tax is the main tax where not being married can bite you big time. Capital; Gains Tax can also be an issue in certain circumstances.
There are also issues regarding joint bank accounts and authorities for such things as utilities and rights to pensions.
In fact, there was a landmark court case only last week on the right of an unmarried person's right to her deceased partner's pension.
Finally, in law there are automatic succession rights between married couples which don't exist when couples are not married. This can cause real problems for a surviving partner UNLESS a very carefully worked out and specific will is drawn up which makes it clear who gets what on death.
This is why we're seeing a solicitor on Monday There are also issues regarding joint bank accounts and authorities for such things as utilities and rights to pensions.
In fact, there was a landmark court case only last week on the right of an unmarried person's right to her deceased partner's pension.
Finally, in law there are automatic succession rights between married couples which don't exist when couples are not married. This can cause real problems for a surviving partner UNLESS a very carefully worked out and specific will is drawn up which makes it clear who gets what on death.
AyBee said:
98elise said:
Agreed, I will never marry. Sad but true.
With that much joint already and 2 kids, I suspect married or not, the outcome in a split would be the same anyway...I prefer the security of knowing that everything I've worked for cannot be taken away from me. I've seen mates lose pretty much everything.
I've always felt this way, so its not something my partner has done wrong
Robertj21a said:
desolate said:
98elise said:
My kids are of uni age and my partner owns a house, so I suspect not.
I prefer the security of knowing that everything I've worked for cannot be taken away from me. I've seen mates lose pretty much everything.
I've always felt this way, so its not something my partner has done wrong
I would suggest you meet with a solicitor who specialises in that field as well as I seriously doubt that is the case.I prefer the security of knowing that everything I've worked for cannot be taken away from me. I've seen mates lose pretty much everything.
I've always felt this way, so its not something my partner has done wrong
I'm fairly sure that any judge will not resolve issuess as simply as the OP believes.
Eric Mc said:
98elise said:
If we split why would she have a claim over my property?
Because of her "contributions" - whether pure money or time and effort - into forging a life with you.Judges take all sorts of factors into account when deciding whether the other party has a right to a share of a person's assets.
It is not a simple monetary exercise.
Its a moot point anyway, as we have no intention of splitting, and are currently planning our retirement together
Gassing Station | Finance | Top of Page | What's New | My Stuff