How to make the will fair

[Xanthe68]

A friend has asked for my advice-

A woman marries, she and her husband have two children, they work hard and are lucky and end up with a flat in London (approx £1.5m), a house in the country (similar) and investments of about £2m.

After a long happy marriage the husband dies. The woman inherits his share. 10 years later the woman begins a relationship with another woman- they live together and and they are very happy together for 5 years (and ongoing).

The woman wants to write her will. What should she do? All her wealth comes from the period of her marriage (both partners contributed) and was thought of as the children’s inheritance. But she’s worried about her new partner who doesn’t have much (not lazy- has worked hard all her life in a low paying profession).

WWYD? FWIW the children are very happy about their mum’s new relationship and it’s probable that the late husband would have been as well (based on how he was in life). Would you leave everything to the kids or something to the new partner? (Unmarried).

I agree with a pp that you need to seek professional advice. most people on this thread are splitting the full value of the estate but without inheritance tax planning it won’t be anywhere near that value.

What I would do is firstly consider what I should do now. I think that would look something like seperating out half of the estate including one of the properties and either gifting that to the children (slowly over some years to minimise tax) or using it to create a family trust with them as beneficiaries or a combination of the two. What I chose would probably depend on if they were independently wealthy, how much help they had already had, if there were grandchildren (or likely to be).

I would then make a will which looked like a fair split of the remaining assets - 3 ways potentially- with thought as to what would happen to the remaining property. With a view that this might change over time if I married my partner or split up with them etc.

@HollowTalk Yes probably. Presumably the DC are adults with their own lives. DF chose not to split his share of the estate on his death with no guarantee the money would end up with them. Many DC end up with nothing eventually due to second relationships/marriage/step DC. It's not unreasonable for someone with a new partner to split her share equally between DC and newer partner. The DC still end up with the lions share of the estate.

My mums will is really simple OP. She decided to split it 4 ways equally between me and my brother and her 2 grandchildren, Thats it no debate for anyone! I am the executor as I am the oldest (??) I sort all assets and the funeral then everything is done.,no arguments,not that there would be as we are all close and a happy,get on well kind of family,Everyone was told by mum what was what and she brokered no discussion which was fine. Wouldnt work for some families but it works fine for us. Should be fairly straight forward when the time comes to sort it out.

No that is not true. My now H has a lifetime interest in the property but he has his own children and own assets. I have agreed I will not take anything from him and vice versa. I love him more than my first. My divorce assets are for my children.

Defineitely take financial advice. However, I think she should leave everything to her own children. Does the new partner have family? If so, why should her family (strangers to the friend and late husband) inherit money from her? Is the partner too old to begin planning for her retirement herself? Leaving life time interests is messy and problematic too. Her children should come first.

Yes this feels fair - akin to a stepparent will.

Having had a family member left a lifetime interest I wouldn't ever go anywhere near one - sounded great in writing was hell in reality.

Taking all the emotional aspect out - it tied together two lots of people with nothing in common for years.

@PurpleMarie the OP says the dh died after a long and happy marriage, and that it was 10 years later that the woman met her new partner who she has been with 5 years.

This is not about whether she loves her new partner 'just as much.' It's about having a will which reflects the fact that she has two children from her marriage, that her late dh contributed as much to their wealth as she did (and also that up until 5 years ago her now partner was obviously supporting herself or in a previous relationship from which she may have assets.)

The logical way is that her late DH's half goes to the children. Her half is then split 3 ways.

Your suggestion of 50% to the current partner means they get more than each of her children.

Something to the new partner.

I think I'd be minded to try to buy a fairly nice buy to let flat as an investment, using cash, in a location the partner would be happy to live, and then leave the partner the buy to let flat, the right to live in the central london flat for 2-3 years after death, and some cash (£20k, £50k, much more?!!?!?!)

If the partner didn't want this then it would appear likely that the partner can be left enough cash to buy a reasonably nice home, but maybe not as nice as the £1.5 central london flat.

All to the kids.

Yeah the kindest, generous thing would be a life interest. Less generous a specific period in a property. But they would need to provide enough to maintain said properly somehow too, in order that the children recieve it in good nick.

Thank you to everyone who has commented on this thread- I've shared it with my friend. She is going to get legal advice but has been asking around for advice from friends to try to get a handle on what's a fair way to proceed. Everyone gets on very well so she's also planning to tell her children and partner what she's proposing so that people know what to expect and can speak up if they're worried.

I would take it that half belonged to dad, and half to mum. So when both parents have past, kids should have all of dad's and half of mum's so she can leave something to partner.

So I would do 75% split between the kids, and 25% to the partner.

I'd leave everything to the kids with £500K to the partner so she can buy herself somewhere to live (and depending on area and size of property) have a bit to live on or blow on a new car/holiday etc.

Even better, buy a property now and give it to the partner. As long as you survive 7 years there's no IHT; and then leave everything else to the kids.

It’s quite a high value estate so the expense of a trust is worth it @Xanthe68

Your friend should set up a trust in her will for her children. Her partner - if they’re still together - should have her life use of the INCOME but not the CAPITAL of your friend’s estate.

It really doesn’t matter than if your friend’s partner remarries etc. The estate is left in trust to the children, with the partner/widow with a life right to the income, but not the capital (properties, stocks etc). With strong trustees who will stop her liquidating assets.

It’s the way things have been arranged in my family for several generations.

The advantage here is the size of the estate, there is enough here for both children and the partner to be left in comfort so it should be amicable.

I would give half of the investments to the partner and everything else to the DC. This would give her enough to set up on her own and leave her financially comfortable. It would leave the family homes to the children (what if one of them decided they would like to live in one). If the estate is eroded because of care fees then it's the partner's share that's eroded.

I would also speak to the children and partner and make sure they knew your wishes, and the reasoning. That way, if the situation changes and the will can't be changed (money gone on care fees, property market tanks, one of the children becomes ill and has expensive care needs, whatever), then they have some understanding of the underlying wishes and may well be able to make changes in line with your wishes.

Your friend should take legal advice, particularly If she lives in England where the Inheritance Act 1975 might apply.

This law allows cohabitees, who were living with the deceased for at least two years prior to their death and were ‘financially supported’ by their partner, similar rights to claim against an estate as an actual spouse or civil partner. The impact of this is that the partner might have grounds to contest the will if her legacy isn’t similar to what a divorcing spouse would receive.

So in this scenario - based only on the facts in the OP- a ‘fair’ division could look like up to 50% of friends assets go to the partner plus a life interest in their home, and 25% to each child.

The friend would be well advised to seek legal advice on the will and to put a cohabitation agreement in place.

It would depend entirely on if the adult children have their own homes, decent income and so on. If yes, I would divide the wealth by thirds. Eg. Partner gets current house, rest divided between children. It's important that the current partner is house adequately

Is the flat their shared home?

I'd leave that to the new partner. £2m between DC is plenty. It would be different if there wasn't a lot to go round, but there is.

I hope your friend is getting legal advice soon and does a little estate planning as part of that (Need a STEP related solicitor) as if not, there is going to be an insane IHT bill to pay.
If assets are £5M, thats 40% of £4M due = £1.6M

75% to kids

Full 50% from the father share is theirs

Then half the mothers share to be split between them and her wife.

So she gets 25%

Roughly 40% share each to kids and 20% to partner means kids have had half their dads estate each and a third of their mums and DP has had a third of mum's (ish).

50% to the current partner, 25% each to the children of the marriage.

She needs an estate planning professional, but I présumée you’re asking about moral fairness?
80% kids 20% partner