big age gaps and wills

[greenfolder]

We need to rewrite our wills as they are hopelessly out of date. We have dd1 just turning 18, dd2 nearly 16 and dd3 just 5. Originally we had a decent number of options for guardians but as the years have passed this has diminished.we only have my mum who is now too old to take om DD3, sil who is approaching retirement or my sis who has said she would take DD3 but not DD2! As dd1 is now an adult could we nominate her as DD3 guardian? What could we do about our estate? It would be around the 750k mark including life assurance. How can older ones get their share whilst ensuring there is enough for DD3?

[Theas18]

Do you trust your dd1? She could be a guardian or at the very least a trustee for the youngest. Being guardian wouldn't mn she had too take the youngest in herself but be involved in making provIsion as the probably knows best how you would be thinking. She could be adaptable-in the primary years your 5 year old could go to sil but 10 yrs hence at 28 and 15 they are much likely to be un a situation to stay together

[mumblechum1]

Your eldest daughter is eligible to act as an executor and/or a guardian. As Theas says, being appointed as a guardian doesn't necessarily mean that she'd have to have the younger two living with her, but would be able to make appropriate arrangements.

She would be able to hire a solicitor to help with the paperwork involved in acting as an executor.

I'm a will writer and normally recommend that you don't have the same people in both roles, partly because it's a lot of responsibility to look after bereaved children and do all the running around of obtaining probate, but if you are very short of options and trust her with the money then you could appoint her in both roles.

You need also to have a second default executor as a trust would automatically arise if your younger two were under 18. The second executor would act as a gatekeeper to the trust to prevent any mismanagement of the fund.

So far as your estate is concerned, money held in pension/insurance/death in service trusts isn't counted in for inheritance tax; the tax is only calculated on your estate, which comprises you house, contents, cars, savings, shares etc etc.

I'm a will writer and if you're interested, I have a paid for advert "5* Will Writers Recommended by Mumsnetters" over on the Small Business Section of Mumsnet Classifieds.

[tallulah]

We had a similar dilemma. When DD2 was born her siblings were 21, 20, 18 and 16. My mum had always said she'd take them if anything happened to us but realistically at 72 she is too hold for permanent care of a small child.

We made DD1 the guardian of DD2, and also of DS3 (should we die before he reached 18). Although we wanted everything split equally 5 ways we asked the solicitor who wrote our wills to word it so that DD1 couldn't be made to sell the house to give the others their share before DD2 was 18.

[greenfolder]

Thank you for responding! I do trust dd1 probably more in terms of looking after dd3 than handling hundreds of thousands of pounds. We do have a sound brother in law that would be good with that side of things. I must get this sorted out-many plus points to having a bonus baby but pretty hard when thinking about all this! Will have a look at your advert mumblechum

[catsrus]

its also a great comfort to kids to know what would happen in the case of parent's dying. I was in a similar situation (but not such a big age gap) and made sure I updated my will and took out life insurance to cover the cost of inheritance tax. If you own a house in London that might be something you have to consider. I didn't want them to have to sell the family home on top of a bereavement so I insured myself for enough to cover IHT and make sure they could stay in the house for a few years to get themselves sorted out. The older two were named guardians for the youngest and two family friends that they all love and trust are executors. They know that if anything happened to me they would have a home and money to live on for a while.

Honestly once it's done you will feel so much better!

[mumblechum1]

Very good point there about taking out insurance to cover inheritance tax in the (v unlikely) event that both parents die whilst the children are still young.

[Xenia]

We have a big age gap too and I'm divorced. If there is still a parent alive usually they will take charge. You can write a Letter of Wishes too setting out what you would like to happen about some times which we have too. If both parents are dead the adult sibling(s) can certainly be guardians.

Most important of all make sure that life assurance policy is in trust particularly once hte first spouse is dead as otherwise it goes into the estate and is taxed at 40% IHT if you are over the limit for inheritance tax. The life companies have verysimple forms you can easily complete to put the policy proceeds in trust which in our case was for the other spouse and since divorce in favour of the children which means the life insurance money is not sub ject to inheritance tax and could be used to pay inheritance tax due on any equity in the house when the second of you dies. Same with pension fund monies which pay out if you die before taking the pension.