Revision of Wills following arrival of PFB - Mumblechum?

[FantasticMrsFoxx]

My partner and I live in Scotland. We are not married. We currently have mirror Wills that we are looking to revise following the birth of our first baby (all to him; all to me; % split to each side if die together; charity %).

While I wait for my original solicitor to get back to me, I'd be grateful for some pointers about what we need to think about in relation to passing on our estate to PFB (house worth approx £225k, both have life insurance through work of approx £90k each), some stock market shares etc).

Any advice on guardianship especially welcome, and thoughts on best age for inheritance if the worst was to happen.

TIA

Hi, unfortunately I can't advise on Scottish law, but if you were in England and Wales, the usual thing is to simply say that on the second death, all of the joint estate goes to the children (don't name your PFB - the estate will just go to whatever children survive you).

The life insurance/death in service benefit isn't counted into your estate for inheritance tax so long as it's held on a discretionary trust (it almost always is).

So far as guardianship goes, someone of the same generation as you is generally best although if you have youngish parents you could appoint them either alone or with someone younger. They would then decide between themselves who would be best placed to care for your children day to day if the worst happened.

In England, there's a small tax advantage to children inheriting at 18. This is to do with tax accrued on the trust and in my view it's not worth the risk of 18 year olds going mad with large sums of money. Most people go for 21, or for larger estates, 25.

Hope that helps a bit, and congratulations on your PFB

Thanks Mumblechum, that's really helpful. It is a 'death in service' benefit we both have. It's good to know that doesn't count for IT.

Due to family circumstances (OH's siblings live abroad) we will probably appoint friends as DD's guardians. It it usual to make financial provisions for them to do so, e.g. a regular allowance or upfront % of our estate?

No, certainly in England and Wales, you don't give anything to the guardians, as of course if you did award a lump sum and then died a week before the youngest was 18, the guardians would be getting something for nothing and thereby the children would receive less.

The guardians and trustees would agree an annual amount for the children's maintenance, and of course as and when they needed extra for holidays, birthdays etc they would agree extra payments.

Sorry to hijack this thread slightly, but we are just getting round to wills and life insurance.

Wrt the guardian, our dc's are older (9 and 11). Can we appoint a guardian who can be responsible for their wellbeing and finances, but not necessarily who they'll live with? Someone who can advocate for them?

Do we also need to say who we want them to live with? I would be happy for them to choose. We have lots of relatives. I would prefer to state who I do not* want them to live with. There is just one person. Do we have to state reasons, and would this be adhered to?

We love in the uk.

Hi Dean,

The trustees are responsible for the finances, ie the best way to invest the children's trust fund, and how much should be released to the guardians on behalf of the children.

Certainly you can appoint several guardians, on the basis that the children would live day to day with whoever was best placed in terms of geographical location and the children's educational stage etc, but with other guardians equally responsible for making major decisions such as medical treatment and choice of school.

Lots of people appoint grandparents, aunts and uncles to be joint guardians, but specify that they'd like the children to live day to day with a specific aunt, for example

That would make more sense than specifying who they shouldn't live with although you can say something if you feel very strongly about that. Any reasons which may be controversial should be set out in a separate letter rather than in the will which will eventually be a public document.

Thanks again. That all makes sense.

That's really helpful Mumblechum thankyou.

ItsgoingtoReindeer

Yes, you should make a will now, because that will cover whatever is in your estate at the date of your death, so there's no need to change it whenever your assets increase or decrease.

So far as guardianship is concerned, as you were married to your dd's father he has parental responsibility and so it would normally be presumed that she would live with him if anything happened to you. It would however still be possible to appoint a guardian in your will. The fact that you have appointed a guardian doesn't override the presumption that the dad would have residence but in the event of a dispute the court would take account of the appointment of the guardian. You should also leave a letter of wishes for the guardian with your reasons for not wanting your dd to live with her dad, and update that regularly. It's best not to put your reasons in the will itself as it will eventually be a matter of public record and so it's best not to air these things in public.

Then on your dd's 18th birthday you can simply destroy the letter of wishes

So far as your parents' wills are concerned, if they've appointed solicitors as executors the likelihood is that they will charge a percentage of the estate. For that reason I always advise my clients to appoint siblings or close friends as executors. They can always take advice from solicitors but will be paying an hourly rate when they get stuck with the paperwork rather than seeing a %age disappear from the estate.

If you'd like any further info please do ask or PM me if you prefer.