Splitting assets in my will

[PrincessPeache]

I’m only 34 and in good health but with a disabled DC I can’t keep avoiding writing my will.

DC is 8 and is in good physical health but has several complex neurodevelopmental conditions, and may not ever live independently.

DP is not legally his parent but Ex isn’t involved at all and will have no desire to take DC into his care if I die (and due to previous police and SS involvement it’s unlikely he’d be allowed to either). We are considering whether DP might adopt DC but he is going to be named as my DC’s guardian in my will.

DP owns a house with a small mortgage. I’ve never contributed to this and have no desire to be on the deeds. It’s left to me in his will.

My only assets are a Civil Service Pension (Alpha) and a £300,000 life insurance policy.

DP was made redundant last year at the same time I got a promotion. My earning potential has always been significantly higher so we decided he would become DC’s carer as my promotion would have made things very difficult without this. We live comfortably on my income and his carers allowance plus DLA higher rate for my DC.

I’m thinking it makes sense to leave my DC the life insurance policy (perhaps in trust? WitH my DP gatekeeping until DC is 30?) and my DP the pension? Is there any downside to this that I’m not seeing?

@PrincessPeache are you planning to marry DP? It makes sense, because then his home can be left to you without inheritance tax or capital gains tax issues. As your DP doesn't work, you may also benefit from marriage allowance.

https://frazerjames.co.uk/4-ways-that-marriage-can-reduce-your-tax-bill/

Your life policy may only have a fixed term. Your pension may not pay anything beyond death. Insufficient information here to tell, but these are main concerns.

A downside is that any relationship can break up and DS will certainly need a dedicated parent figure for at least 10 years perhaps much longer. Suppose you and DP separate? Suppose you die and DP has a new partner who doesn’t welcome your son? I’d be very careful of giving DP this responsibility however good things are now. Is there a family member who could care for DS?

I’d also question relying on the life policy and when/if it expires.

A civil service pension will probably have provisions for a dependent child. have you looked into that aspect

Are you in one of the civil service unions eg PCS? They may also have a death in service payment, just to make you aware.

The life insurance policy is fixed term but more than covers me dying in DCs childhood. I’ll obviously re-assess when he’s into adulthood ☺️ right now I’m trying to get my head round ensuring DC gets the care he needs until he’s about 30, which the life insurance will cover.

I can’t really get my head around the pension benefits - there’s a Death in Service benefit (about 4x my annual salary) and I can also put DP down to receive my monthly pension but it isn’t very clear if this is either/or or both. Same with the child pension. I suppose I’ll have to give them a call to clarify in the New Year.

DP has raised DC as his own son. DC knows DP isn’t his legal/biological dad but loves him as a dad and calls him dad. There is no other father figure. DP is on board with being his carer as long as he needs to be and when we’ve spoken before about him becoming his guardian he is keen to do so. He would be supported by my family but no, there isn’t really anyone else - my parents would obviously look after my son, but I don’t want them to be the first choice because they’ve raised their children, still have my brother (in his mid 30s) living with them and his two children part of the time, and they’re approaching retirement and just want to live their life and travel. They had kids young so that they could have a bit of their lives back by the time they were in their 40s…that didn’t pan out because my brother never left, and it’s been the same for their 50s.

Equally I wouldn’t want my son being looked after permanently by either of my brothers because I’m not totally on board with their parenting styles (both opposite ends of the extreme whereas I’m more middle ground). DX wouldn’t thrive with either of them but he would continue to thrive with his dad.

@PrincessPeache don't think about it as writing a will once and that is it. You can write a new will when ever you want to reflect changing circumstances. What may be right for everyone now may not be right when your DC is 21.

Look for a STEP solicitor who can advise on the options to consider.

We aren’t planning to marry and currently the property value/DPs total asset value is below inheritance tax threshold but will obviously reassess if that changes.

If his assets are less than £325k then that should be ok, but watch out for house price inflation pushing him over the threshold. (If you were married or in a civil partnership the threshold would rise to £500k).

You will only be exempt from CGT if the house will remain as your main residence.