Wills - Whats your perception of fair.
Discussion
Wife & I need to sort out wills. Been married for less that 2yrs, she has 2 kids from previous marriage, me 1. So both came into marriage with reasonable assets. She has 2 properties in her name, me 1.
How would you go about structuring wills to have an equitable disbursement of assets between the kids.
I will be getting legal advise, however was wondering what people was a fair position to start from.
How would you go about structuring wills to have an equitable disbursement of assets between the kids.
I will be getting legal advise, however was wondering what people was a fair position to start from.
If you look at it from the point of view of any of the kids, they will likely want their parent's assets that were brought into the relationship to come to them. Eg if your one house is worth more than her two, I'd imagine your child would not want to see it or part of its value distributed to his/her step siblings.
Stuff that you and your partner accrue during the relationship: split three ways.
Stuff that you and your partner accrue during the relationship: split three ways.
Greg66 said:
If you look at it from the point of view of any of the kids, they will likely want their parent's assets that were brought into the relationship to come to them. Eg if your one house is worth more than her two, I'd imagine your child would not want to see it or part of its value distributed to his/her step siblings.
Stuff that you and your partner accrue during the relationship: split three ways.
Yes, this is what I was thinking as being reasonable or even the rules were I to drop dead today which I think is a straight 50:50 split between wife & son.Stuff that you and your partner accrue during the relationship: split three ways.
megaphone said:
You need to think, what if you die first? Can you trust your wife to be fair to your child? You need to ensure you look after your child. And of course vice versa if your wife dies first.
Yes, another aspect, hence why we need good legal advice. I can see this getting messy with trusts & wot not made more messy by a likely very substantial inheritance on my side coming into play at some point! Your key issue is whether you have married someone you trust. If you have it's relatively easy, if not you have a problem.
The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.
If you do trust them it's simple, on the first death everything goes to the partner, on the second you then go into the means of calculation you agree. If you trust them then they/you will stick to it, or change it in a way they are confident would make sense to you.
If you don't trust them or they don't trust you that's different, it's hard to know your best way forwards. Whatever you come up with won't benefit the one of you that survives the first death, it may cause major problems.
So it does all come down to whether you trust the person you are married to.
The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.
If you do trust them it's simple, on the first death everything goes to the partner, on the second you then go into the means of calculation you agree. If you trust them then they/you will stick to it, or change it in a way they are confident would make sense to you.
If you don't trust them or they don't trust you that's different, it's hard to know your best way forwards. Whatever you come up with won't benefit the one of you that survives the first death, it may cause major problems.
So it does all come down to whether you trust the person you are married to.
gizlaroc said:
What have you two discussed about it?
Pretty much what has been outlined IE: what was our own prior to marriage, is ours to go where ever, whats post marriage gets split. HenryJM said:
Your key issue is whether you have married someone you trust. If you have it's relatively easy, if not you have a problem.
The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.
If you do trust them it's simple, on the first death everything goes to the partner, on the second you then go into the means of calculation you agree. If you trust them then they/you will stick to it, or change it in a way they are confident would make sense to you.
If you don't trust them or they don't trust you that's different, it's hard to know your best way forwards. Whatever you come up with won't benefit the one of you that survives the first death, it may cause major problems.
So it does all come down to whether you trust the person you are married to.
....and I do trust, but also want to propose something thats fair. If it was manifestly unfair then it may give rise to a lack of trust. Does that make any sense! The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.
If you do trust them it's simple, on the first death everything goes to the partner, on the second you then go into the means of calculation you agree. If you trust them then they/you will stick to it, or change it in a way they are confident would make sense to you.
If you don't trust them or they don't trust you that's different, it's hard to know your best way forwards. Whatever you come up with won't benefit the one of you that survives the first death, it may cause major problems.
So it does all come down to whether you trust the person you are married to.
GT03ROB said:
....and I do trust, but also want to propose something thats fair. If it was manifestly unfair then it may give rise to a lack of trust. Does that make any sense!
The issue is that it is not possible.Take an example. After years of marriage the wife dies, aged 75. The husband continues on to 90. During those 15 years you, presumably, can either have all the funds because she trusts you, or she insists that a significant amount goes to her kids and not you. (And of course it works the other way round as well)
If some goes to the kids is that OK? Would you be OK on a lot less because of that? Would it matter that you couldn't go into a good care home or maybe have a private health operation or even have just quite the same holiday because some kids have the money?
But there may be some way of doing it? No there isn't, it's either money that is your's or there's, sure you can have it in forms of trust funds in theory, but really those died with the CGT changes, any retention of it is so restrictive as to be too usable, might almost give them the money anyway.
So from your perspective if she dies you should have the priority to get the money, distributing to her kids should take place only when you've gone and the same should work the other way round for her.
HenryJM said:
Your key issue is whether you have married someone you trust. If you have it's relatively easy, if not you have a problem.
The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.
If you do trust them it's simple, on the first death everything goes to the partner, on the second you then go into the means of calculation you agree. If you trust them then they/you will stick to it, or change it in a way they are confident would make sense to you.
If you don't trust them or they don't trust you that's different, it's hard to know your best way forwards. Whatever you come up with won't benefit the one of you that survives the first death, it may cause major problems.
So it does all come down to whether you trust the person you are married to.
I vehemently disagree with this I'm afraid. It is this that leads to most disputes. Both parties need to lay out a defined set of rules that not only the parents but also the children (if old enough) understand. The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.
If you do trust them it's simple, on the first death everything goes to the partner, on the second you then go into the means of calculation you agree. If you trust them then they/you will stick to it, or change it in a way they are confident would make sense to you.
If you don't trust them or they don't trust you that's different, it's hard to know your best way forwards. Whatever you come up with won't benefit the one of you that survives the first death, it may cause major problems.
So it does all come down to whether you trust the person you are married to.
It's essential to factor in the really simple stuff like the impact of the child who has lost the blood parent's behavioural change. Very common for that child to go off the rails etc. at the same time it is all too common for the other siblings to resent any inheritance etc.
And then there is the arrival of a replacement partner and the issues that causes.
Trust has absolutely nothing at all to do with writing a will. Trust is the cause of nearly all such disputes. The will must lay out in very simple and clear terms what happens under what conditions, must protect all parties and all parties must be party to the structure of it.
And let's not forget the most common error which is to forget to change your will after separating so your assets go to people whom you would probably not have agreed to at that time.
For certain the will needs to contain two sets of rules where the sets are defined by co-ha biting within a relationship or not and this is defined by two executors nominated by the deceased. Ie your two closest friends will know the truth of your relationship at point of death and can be relied upon to act in your best interests. The ex partner cannot.
Blending families and doing the right thing is a can of worms to start oth but there is absolutely no room for trust at all because there will be no trust when the money is being divied out regardless of blood ties or no blood ties.
There is no dispute, your assets go to your wife or husband, only on their death does it go anywhere else. Why would it be any other way? Would you like to cope with both your wife dying and a lot of money going to her kids?
If you have the sorts of kids who can't cope with that then they are the ones with the problem.
If you have the sorts of kids who can't cope with that then they are the ones with the problem.
Hugely complicated as presumably one of the three properties is the family home and the other two aren't. So whichever child gets given the family home in the will in theory can't do what they want with it until the family has left home!
You also need to think about Guardian's and Trustee's should both you and your wife depart before the kids are adults. Who is going to look after them and would you trust that person to in charge of your kids inheritance ? In my case what we have done is appoint some friends as guardian's of our kids (that's not an easy choice and a huge potential undertaking for them) and then have appointed two separate friends as trustee's both of whom are financially savvy. They all know each other and I know get on very well and are all practical and pragmatic people but ultimately you have to protect your children's interests and I would not want one person or a couple having total say over them.
You also need to think about Guardian's and Trustee's should both you and your wife depart before the kids are adults. Who is going to look after them and would you trust that person to in charge of your kids inheritance ? In my case what we have done is appoint some friends as guardian's of our kids (that's not an easy choice and a huge potential undertaking for them) and then have appointed two separate friends as trustee's both of whom are financially savvy. They all know each other and I know get on very well and are all practical and pragmatic people but ultimately you have to protect your children's interests and I would not want one person or a couple having total say over them.
HenryJM said:
Your key issue is whether you have married someone you trust. If you have it's relatively easy, if not you have a problem.
The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.<snip>
No. Everybody has a £325k IHT allowance. So GT03ROB can leave up to £325k to whoever he chooses without any IHT being payable. Anything over and above this amount should be left to his spouse.The first one of you to die should pass everything to the other, doing that makes sense, there is no tax and the tax allowance passes on to them so no more is paid running that way. So it saves no tax, the only reason for doing anything else is because you don't trust them.<snip>
Countdown said:
No. Everybody has a £325k IHT allowance. So GT03ROB can leave up to £325k to whoever he chooses without any IHT being payable. Anything over and above this amount should be left to his spouse.
No. Everyone can have a £325k allowance but there is no need to use it on first death, it can all be carried forwards to the second and be, currently, £650k.There are lots of problems - say, for example, on your depth your wife and yourself make £1 million, £750 in the house. So £325 to the family can mean she has to find £75 she doesn't have.
The only fair route is to leave to each other and then trust them to distribute it on from there. Sure, she may not, but there really is nothing you can do about it unless you want them to live the end of their life with what they may need.
But for all of it - don't think of it as how you would take it, work out what it means if she dies first. If she dies do you have to pay out to her kids, could you afford it? Could her kids have the money whilst you need medical treatment?
Edited by HenryJM on Tuesday 20th January 20:20
HenryJM said:
No. Everyone can have a £325k allowance but there is no need to use it on first death, it can all be carried forwards to the second and be, currently, £650k.
I'm aware of that. However, if OP wants to leave £X000 to his own offspring why not do this directly (upon his death) rather than pass BOTH his assets AND his nil-rate IHT allowance and then "hope" that she does the right thing?Countdown said:
I'm aware of that. However, if OP wants to leave £X000 to his own offspring why not do this directly (upon his death) rather than pass BOTH his assets AND his nil-rate IHT allowance and then "hope" that she does the right thing?
OK, so you have a sum of money of £1million, the wife died and you were then happy to pass on £325million to her kids whilst also wondering where to get that from as trying to sell the house to raise the money.Does that work well?
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