Life Insurance and Will writing.

[2024BigWhoop]

Morning all,

I’m just after some thoughts and advice regarding life insurance and Wills.

I’m married with two children and neither myself or my husband have Life Insurance or a Will.

We both assumed that as we are married there’d be no confusion as to who gets what etc so we didn’t really think one was necessary.

We also both had careers that came with a “death in service” payout so we kind of relied on that too.

DH is still in his career but I have recently resigned from my role due to health issues. I intend to keep my registration though and am currently in training to do another role within my career scope, although I will be self-employed which I assume will negate the “death in service” ??

I have a chronic health condition that although unlikely, does hold the possibility of an unexpected death.

We have really just coasted along with the thought process that a Will isn’t really required when we are married as all our assets would remain with the other spouse/parent should one of us pass away.

I suppose the only ‘point’ we see to a Will is to outline what would happen to our money and children should something happen to both of us.

There’s been a recent death in the family and it’s led to all sorts of issues and it has really kick-started me and my husband to seriously think about writing one.

We know nothing about it though.

Can anyone advise on any companies or different policy options for us regarding life insurance and Will writing companies?

We are both early 40’s with primary aged children.

Thank you.

You have lots of options:
Write your own Wills.
Look for “Will Weeks” locally where solicitors waive their fee, usually they expect you to leave a donation to a charity tho it’s not compulsory.
Charities also supply Will writing, again in the hope of being left a donation.

I took out an agreement about 20 years ago, paid a lump sum (£800 ish?) and I can change my Will as often as I want. I haven’t got it to hand right now but I’ll dig it out the safe later and send you the name.
Not having a Will when you die leads to all sorts of hassle and expense.

The thing about life insurance is that policies can be written in trust so that if you die, the beneficiaries (your children) get the money straight away and the money is not subject to HRT (if estate is above a certain value). You usually have to have trustees while they're underage.

Hi OP,

I do this for a living.

Your best bet is going through a reputable life insurance broker. They have a multitude of insurers on their panel and some have specialist insurers who underwrite complex medical history and can still offer term assurance.
The broker should have a free trust service so you can put the policies into trust. Doing this can avoid things like private and IHT.

If you're outstanding any tests / investigations / appts the insurers will postpone your application until it's been completed.
Depending on your medical history, you may get standard terms (which is where you get an initial quote and it stays at that price) or you might have a medical loading applied to the policy, it really depends what conditions you and DH have.
There is a possibility the applications may decline or postpone.

If you want any help I can PM you. I don't sell any policies so please don't think that's what I'm trying to do. I can help point you in the right direction though.

Trust can avoid probate that should say, and inheritance tax.

Trustees need to be over the age of 18, and your children can be beneficiaries. When they turn 18 they can be added as trustees if you have something called a 'flexible trust'

You need a will that makes your DC you sole heirs.

If you die your DH will get everything. If he remarries then he dies his new wife will get all his (your) inheritance effectively disinheriting your DC.

This happens all the time.

@2024BigWhoop as you just want a standard will, nothing complicated, you could do what we did and use a DIY template. We bought one many years ago from WH Smith, and then used the same brand again (Lawpack) when we needed to update the will. There are probably other companies that offer the service too. A "Mirror Will" pack probably has everything you need and costs about £30 ish.

When the will is complete, if you want to lodge it somewhere safe you can use the government's will lodging service for a very small fee (approx £15 from memory): https://www.gov.uk/government/publications/store-a-will-with-the-probate-service

How is this done though?

How can I leave half my assets to my children when my only asset is the house we live in and the savings me and DH have?

Is he supposed to withdraw 50% of our savings and put it in the children’s bank accounts? Or sell the family home and give them 50% of the money and then my husband finds somewhere else to live using his 50% as a deposit on another home?

I genuinely don’t understand how it’s practically done when you say I have to specify I want everything left to the children?

Hi Op

My husband died without a will so I got everything as his personal possessions did not exceed 250k. His life insurance and death in service named me. That's what would likely happen to you.

With my new partner everything is willed to DC, including my majority share of our house,

I always recommend LV life insurance - they paid out within a week with zero fuss, huge relief at the time as I was pregnant

This approach is complicated, so would need a solicitor. It is only necessary if you don't trust your husband to be pro-active about changing his will to protect your children if he remarries. A conversation to explain this to him might be enough. I say this because 10 years ago my PiLs paid a solicitor a lot of money to set up an arrangement like this - it involves putting a proportion of the inherited money in a trust. They're now reversing it because they're realising it is an unnecessary complication (though they're in their late seventies, so unlikely to remarry).

I think you can set up a living trust so your OH can stay in the house until he/she passes away and then your DC get their share then.

OP, if you google something like "will to protect children if spouse remarries" you'll get a few links. Any family solicitor will be keen to sell you their services to advise you on this but, as I said before, if you trust your husband to revise his own will before any remarriage then it may not be necessary.

I have tried LV but they won’t cover me due to my ongoing health condition.

I’m so sorry you lost your husband at such a vulnerable time x

speak to a solicitor or a will writing service. Don’t rely on what you’re being told on here.

This may be the case with many life insurers as they would see you as high risk. If the main purpose of the life insurance is to pay off a mortgage you could check to see if your lender offers a policy. They usually offer "decreasing term" insurance. It is cheaper than fixed term life insurance because the payout diminishes with time to mirror the reduction in your mortgage loan.

I spoke to someone on the phone this morning who acts as an agent for various life insurance companies and we spoke for an hour about my medical history and he found one company who was prepared to cover me.

Prior to speaking to this gentleman two other companies had rejected my application based on my health.

The company who are willing to cover me are writing to my GP for a medical report but they said it’s just routine paperwork that needs to be done to confirm what I’ve said and that it wouldn’t change their decision.

It was such a long conversation and I feel frazzled now, but at least the process has been started.

This is legally incorrect. Any will written before a marriage (or in this hypothetical scenario, DP later re-marriage), becomes null and void.

Once a person re-marries, if the person dies suddenly and unexpectedly, the next day, for eg heart attack, car accident....before having the time to make a new will, everything under £250k of theirs will be given to the new spouse, under laws of intestate. This would mean your kids get nothing, or in legal speak 'sideways disinheritance'.

No matter how trustworthy a man is, I would suggest leaving it to your kids in the will. For above reasons.

Do you own the house together as 'joint tenants' or 'tenants in common'? This is important. If owned as joint tenants, it means the house would automatically go to your DP, regardless of what your wills say. If owned as tenants in common, your will should dictate who gets what. I would advise changing to tenants in common, to ensure your kids get it, if you pass.

Also, don't forget to do Power of Attorney if you want to do that too. In case you loose mental capacity. Like a living will. Might be relevant, especially if you have health issues.

OP, you might want to look into getting a 'will trust', so that whenever you pass, your proportion of the property will go to your kids via the trust, whilst DP can keep his proportion.

Also another thing to consider, pensions. Make sure if you have any, private self invested pensions or teacher or nurse pensions, your children are named as beneficiaries. Or DP, whoever you want it to go to.

Just don't underestimate how quickly some men can move on, once you pass. Also don't underestimate that people under the influence of a new wife/girlfriend, can change, including changing their loyalties to their own children. I've witnessed this happen several times in RL. It financially cripples the children. Especially in times like these, where financial futures are largely determined by inheritances or disinheritance.

Make sure you also arrange lasting powers of attorney for both finance and health. You can download the forms from the Gov.uk website and they cost £86 to register each. Really important to give each other permission to manage health and financial affairs if one of you becomes incapacitated.

What happens if you and your DH both die together? (i.e. in an accident) Who do you want to look after your children? And the finances? You need to think these things through and include them all in your will.

There is a lot of bad advice in relation to wills on this thread.

You should speak to a solicitor, look out for one with STEP qualifications. Do not use a Will writer, they are unregulated.

If you want to ensure that your half of assets are available to your husband to use for his lifetime but the terms are fixed so it passes to your children on his death (and not diverted to a future spouse,divorce, kids, bankruptcy) then you should consider a ‘life interest trust’ on first death. He would be entitled to live in the property and to any income from investments during his life then pass to your children on his death. For your half of the house to be included in the trust it must be held as tenants in common. The advantage of a life interest trust to a spouse is that it is inheritance tax exempt (as a gift to a spouse) in a way that discretionary trust are not and so the full ‘transferable nil rate band’ is preserved for second death when gifts are made to non exempt beneficiaries (ie your children). If your estate is of high value then there may be other reasons to use a discretionary trust.

When the second of you dies (or if you die together) and the children are still young, you need to consider what they will be like at that age? You don’t know what age it may be or what they will be like. When are they responsible enough to inherit large sums of money? What if they have personal problems, financial issues, drug problems, controlling partner, looming divorce, reckless? Again a trust can help. You could use a discretionary trust (take advice on tax implications) or a flexible life interest trust. The trustees who you choose would look after the funds for your children and you can leave a letter of wishes setting out when you would consider the children responsible enough to have the funds and can specify that say at age 25 they should be given funds for a house deposit or whatever.