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Original poster

Widow and the inheritance act.

28 replies

Bahhhhhumbug · 19/03/2018 23:41

My Bil has left a large insurance policy in trust for his adult children (my sisters stepkids) Could she challenge this in event of his death as she will be left very little apart from a large mortgage with about 10k equity in the marital home. Surely 'D' Bil must look after his wife first or are trust beneficiaries beyond challenging under the act?

OP posts:
Original poster
Bahhhhhumbug · 19/03/2018 23:42

Sorry she's not a widow l meant in the event of his death sorry and also they have two DC together

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prh47bridge · 19/03/2018 23:56

If the insurance policy is written in trust the money will not form part of your BIL's estate. It will go direct to the beneficiaries. It cannot be challenged under the Inheritance Act.

Original poster
Bahhhhhumbug · 20/03/2018 00:03

Right thank you. So she'll have to just keep trying to get through to him then . It is ridiculous that if he died tomorrow his adult DC word get 100k each and she would only get a large mortgage and 10k equity at best. He has no works pension either as self employed and never bothered with a private one. Just out of curiosity had it not been in trust and they just named as beneficiaries could it be challenged? Because ironically she is trustee. So could she resign,?

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MyKingdomForBrie · 20/03/2018 00:16

Insurance policies have a beneficiary named, they fall outside of the Will. Her being a trustee is irrelevant. Sorry but it’s his choice what he leaves and to whom, it does seem unfair that he’s not splitting between all his children or making provision for his share of the mortgage but I don’t think plotting to disinherit his older dc is the solution.

redastherose · 20/03/2018 00:36

They should both have life insurance that will at very least repay the mortgage in the event of either your sister or her husbands death! That would mean that neither would have to worry about not being able to pay the mortgage and possibly losing their home in the event of either of them dying.

He should, of course, make equal provision for all of his children, however, it may be that he agreed to tie that life policy to his older children as part of a divorce settlement from their mother!

Original poster
Bahhhhhumbug · 20/03/2018 01:14

Well she's not plotting anything just trying to find out what her legal rights would be to be treated fairly and came across the inheritance act which she thought might protect her as a spouse who's not being reasonably lloked after in this event occurring. Definitely not part of a divorce settlement wssnt married to their mum and split years ago..

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Collaborate · 20/03/2018 07:45

She can always take out life insurance on his life, owned by her, which will pay to her in the event of his death. There's no need for her to get upset about it all. The remedy is very simple.

theeyeofthestormchaser · 20/03/2018 07:48

Did he see a financial advisor to write the trust? The FA should have taken into account all his financial circumstances and other family.

Do BIL and SIl have joint money adn investments and life insurance?

What is BIL's reason for leaving money like this??

catsmother · 20/03/2018 08:07

She can always take out life insurance on his life, owned by her, which will pay to her in the event of his death. There's no need for her to get upset about it all. The remedy is very simple.

I agree this would be the most obvious solution to protect both herself and her children in the event of her DH's death. Your sister must obviously look after herself if her DH refuses to.
However, I can also understand how upsetting it must be to feel, basically, that your husband doesn't give a shit about ensuring the future security of his wife and younger children. Presumably she wouldn't be able to service the large mortgage and would therefore lose her home ? You talk about her 'getting through to him' which implies he's either labouring under the misapprehension that there's no need for additional insurance, or, that he doesn't care. Okay, some people are ostriches when it comes to stuff like this, but as he's made provision for non dependent adult children that's not the case here. This seems like such a glaring and cruel contradiction .... I'd actually be questioning how healthy the marriage is. This smacks to me as a form of financial abuse TBH.

LIZS · 20/03/2018 08:10

But won't she be left the property and any other assets like savings? Is there no policy to pay off the mortgage in the event of either death? Most mortgage packages would require one.

OutsideContextProblem · 20/03/2018 08:15

Yep, life insurance. Ideally with his cooperation but without if necessary.

Globetrotter100 · 20/03/2018 08:15

As per collaborate's post. I have done this in the past, simply because I look after financial administration for both of us. Over and above a certain amount, medical declaration may be required. It's really not a problem.

clarrylove · 20/03/2018 08:18

I don't understand why your sister didn't query this when she signed to be a trustee?

Original poster
Bahhhhhumbug · 20/03/2018 09:53

Thanks everyone me and sister both thought the insured had to know they were insured but she's rang my FA today and he said no not if there's a close family or financial relationship so she is going to look into doing that. My Bil is a very assertive person to put it kindly and my DS is isnt so she probably felt unable to question and thought afterwards what about me. Dbil keeps saying the mortgage will be paid off gradually over next twenty years so can't see a problem but DS is is thinking what if he gets run over by a bus tomo. There was a policy in place at start of mortgage but Dbil decided they should opt out and shop around then cancelled or didn't bother renewing with so. Eone else. DS is a bit confused which one happened as was a while ago but no mortgage isn't covered. No other significant amount in assets really just 10k equity as a result of deposit and payments made so far.

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MyBrilliantDisguise · 20/03/2018 10:02

They should have a policy where each of them is covered in the event of the other's death - the mortgage will then be paid off in full. Presumably it would affect him financially if she died?

OutyMcOutface · 20/03/2018 10:04

An insurance policy is not an inheritance. If she is concerned about it she can take out an insurance policy against his life herself.

bonnyshide · 20/03/2018 10:09

What provisions has he made for the 2 children he has with DSIS?

Quartz2208 · 20/03/2018 10:12

Unfortunately everyone has the right to leave money to who they want to - unless there is doubt about ability.

here it seems your BIL knows exactly what he is doing and I have to say sounds quite controlling

catsmother · 20/03/2018 10:47

I wondered if he might be banking on the mortgage being paid off before he dies - the old 'I'm not planning to go just yet' attitude. Which is incredibly irresponsible. All it takes is an accident or a sudden unexpected diagnosis of a terminal illness (at which point he would become uninsurable).
And very unpleasant that he's willing to expose his wife and younger children to that sort of risk.

Ghostontoast · 20/03/2018 10:49

I thought if you had a mortgage on s property it had to be insured up to the value of the loan.

Is she a co-owner of the house? Can she take out a policy to cover paying off the mortgage if either of them dies?

mumblechum0 · 20/03/2018 13:01

It would be better to buy a free standing insurance policy than a decreasing term one on the mortgage, to avoid IHT potentially applying to the equity in the house once the mortgage is cleared.

theeyeofthestormchaser · 20/03/2018 15:53

You need to be better informed about your own financial situation. Make an appt to see your IFA with your h and get him/her to talk through everything so you know where investments, bank accounts etc are in the event of a crisis.

If the IFA has suggested that your h set up a trust without having any vehicle in place to repay your mortgage, that is bad advice.

RedHelenB · 20/03/2018 17:47

If there is a lot of money left to pay on the mortgage have they not been together very long? I can't see him having done anything wrong particularly. Does she work and have her own pension?

Original poster
Bahhhhhumbug · 20/03/2018 20:30

DSis works but looks after DC so works part time not on brilliant money. . Bil on good money. He could manage fine without her financial input but not vice versa. Yes he is quite a controlling or 'know it all' character imo. Been together ten years lived in house four or five married five or so. I think he just thinks he will save on all those premiums and doesn't want to pay out for wife and their DC AND for his older DC.Although on good money he is very tight. So he's just prepared to wing it and presume he'll live to pay off the mortgage. That way his wife and younger DC will be cared for and his older dc too. If he paid a premium just to cover the mortgage only his wife and younger dc would benefit if that makes sense.

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Original poster
Bahhhhhumbug · 20/03/2018 20:34

Sorry made that a bit complicated. By paying on a policy for just his adult DC rather than just for dsis/the mortgage he is killing two birds with one stone (or one premium payment) providing he lives to end of term.

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