making a will, leaving a house

[Himaginn]

What about leaving them different amounts of shares in the house, e.g. 60/40 split? Would that alleviate any immaturity in one child?
Perhaps adding some conditions, e.g. if/when sold 50/50 split?

 

[EFLImpudence]

I believe there is a reducing tax system. I.e if you give it to them now and survive for 6 years, they will only have to pay 1/7 of the tax that would have been due.

I did not know that.

if you "give" it to them and continue to live in it, it will be a gift with reservation and inheritance tax will still apply.

Nor that, but...
...how does that work with the above?

It would be good to know the value.
If just a 'normal' modest house in Chichester then what is the reason for the original worry?

 

[Himaginn]

https://www.gov.uk/inheritance-tax/gifts
But it doesn't apply in this case, 'cos there is no inheritance tax.

 

[JohnD]

I went through that not long ago, when a husband had left his share of a house to his sons, with his widow having the right to live in it, and when the widow died, many years later, her estate was liable for inheritance tax on the whole house, not just on her share. It was somewhat difficult ascertaining the rules, and we had to pay for an opinion from a specialist lawyer.

If you are a widow or widower, and your spouse died after Inheritance Tax replaced Death Duties, I think in 1975, then any unused proportion of the spouse's IHT allowance is transferrable, so there may be an allowance of up to (2 x £325,000) = £650,000 which in most parts of the country would cover a typical family house. It would be wise to get professional opinion if IHT is a concern.

 

[Bosswhite]

as an aside
if the boys get any benefits or get housing help a part share in a house will effect them

But then again the rent received should offset any loss, in the end it would be up to the boys what they wanted to do with the property

 

[big-all]

as an aside
if the boys get any benefits or get housing help a part share in a house will effect them

But then again the rent received should offset any loss, in the end it would be up to the boys what they wanted to do with the property

thats just one point
if you have savings greater than 16k you are not entitled to any benefit and i suspect the house as an asset will be counted as the 16k
and having part ownership off a house would not be entitled to any sort off housing help as you have a house so dont need help
now iff you live in the house as your primary residence then it doesnt count as cash above 16k so can still claim benefits as before

 

[Doggit]

Sorry that things may go south so soon Peter; so it's essential that you get the will sorted ASAP. If you die without having a will in place, then it needs to go to probate, and if you have to get a professional involved, then they often charge a fee, plus a percentage of the estate. A local solicitor should charge about £150 plus VAT for a basic will, but you can ring around and get a few quotes.

Have you had a chat with the kids yet; do they know how bad your health is, and do they expect to be able to blow their inheritance, (which I suspect you reckon they'll do) or make use of it.

There are no IHT implications, and you won't be giving them the property till the very end, so you need to decide whether you make a basic will, and leave them each a share of it, or you put it into a trust that's managed for them, so they can't access the asset until they are a little older.

At the end of it, they will either sink or swim, and if they decide to enjoy themselves, then they've got to deal with the consequences.

 

[Himaginn]

or you put it into a trust that's managed for them, so they can't access the asset until they are a little older.

As Doggit said, trustees do not have to be professionals, other relatives or friends can be trustees.
There may be a small annual cost for auditing.
Most banks will have an account that will suit for trusts, although usually no interest is earned. It's up to the trustees to buy, sell assets or invest any money, as they see fit.

 

[JohnD]

I've seen cases where an asset left to be shared between siblings leads to them falling out. E.g. one of them wants to sell it and have the money; the other wants to keep and improve it as an investment; one wants to live in it, they both think the other is being unreasonable and getting more than their fair share.

You could appoint a trustee, I saw a will once where the person had said something like "and if they can't agree it must be sold and the proceeds divided equally between them" and another where the person said "proceeds to be kept in trust until the legatee reaches the age of 30."