Mum's will and sister's terminal illness

[tactum]

Mum has dementia and all 3 siblings have PoA and are managing her affairs. She has a very standard off the shelf will drawn up before my dad died saying estate should pass to him and if he predeceases then split between us 3 siblings. All fine n dandy. Current estate value is c£400k although is being eroded at c£25k per year due to care costs.

DSis has a husband and 3 kids. Has recently been diagnosed with terminal cancer and as things are looking at the moment she will predecease my mum. In this instance presumably when mum does then die the default position would be that estate is split between the 2 surviving siblings.

However me and other sister still want the estate split 3 ways, with a third to be given to her husband, as they are still just as much a part of our family, and it would definitely be what our mum would have wanted, although she has no capacity to make that decision now herself.

So how would this pan out? Would me and other sister have to take half each and then give the husband their entitlement? Or could we amend the will using PoA? What are the tax implications??? I can't see my way through this but it must be a fairly common situation surely?

Apologies for long post, hope someone can give us some pointers about how to make it work. Tia

Sorry to hear this sad news. In most cases the share will pass according to her will or if she hasn’t got a will to her children.
However you should consider seeing a solicitor to make sure your mums will actually does this.

It depends on how well the will is written but usually if your sister predeceases your Mum then I would expect her share to go to her children and be split evenly amongst them. That is what would happen if someone left no will at all.

Ok, I don't know how Gran's will was worded, but Auntie S's share, who predeceased her, was split between the grandkids on that side. There was no question of it going to the other siblings. So my cousins got the £1000 each of the grandkids got, and then half of a child share.

Alternatively, if you and sister both agree and the above doesn't happen, you should be able to make a deed of variation to split the portion to you and surviving sister into three pots. Better to rearrange the pots of money before it is handed out to reduce tax implications.

Consider if you want it to go the the Husband, or straight to the kids. Might not matter right now, but if BiL remarries, there is no guarantee the money will go to the children eventually.

Sorry you are having to deal with all this.

Sorry to hear about your sister

This happened to my mum: estate left to children, one predeceased her. Check your mum’s will, it would be pretty standard to have a bit saying what should happen if any of her children predecease her. In mum;s case she chose to do what you want to do, but it could be that it says the inheritance goes to the surviving children in which case I think you have the option to give part of your inheritance to someone else.

Your sister's share would go to her family I think unless the will states differently.

You can do a variation of will after your mother dies if the will does not have a clause about passing to descendants of sister (its usually put in wills, or at least the solicitor asks you what should happen if children predecease you)

Sorry about your sister x

It should be fine -

When a beneficiary passes away before the testator their benefit from the estate will Lapse. This means that their death has rendered their gift void. In this circumstance the share of the estate that they would have received will be returned and become a part of the residual estate which will be distributed amongst the estates Residual beneficiaries.

There are certain exceptions to this rule, the most of common is applicable when the predeceased beneficiary was a direct descendent of the testator. If a gift in a will is made to a person’s lineal descendent (child or grandchild for example) their inheritance will not lapse if the named descendent has surviving children at the time of the testators death. (The Wills act/ s33) This Does not apply when the gift that the predeceased issue was given was a life interest.

The other most common exception to the Lapse rule is when the testator makes alternative provision in their will for the circumstances in which a beneficiary has predeceased them. This means the lapse rule does not apply as the testator has provided direction for what to do with a predeceased beneficiaries share. There are different ways of expressing this under the terms of a will. Some examples are “in the circumstances that one of my named beneficiaries was to predecease me their share of my estate should be redirected to (name of alternative beneficiary)” or “my children, those who are alive at the time of my death, shall inherit.” This clarifies that the surviving children will inherit and not the children (or Issue) of any predeceased children.

Sorry about your sister it must be tough

Variation of the will after your DM passes.
If all beneficiaries agree, this can be done up to 2 years after the death.
Get it drawn up by solicitor.

Why bother, instead of just passing money on? Because HMRC will count it as beneficiaries money , even if you’re choosing not to think of it as yours, so, in the event of the death of one of the beneficiaries, there could be significant tax implications.

Or, this may have been thought of by whoever drew up your DMs will, so there may be a clause about pre-decreasing beneficiaries, so that the share of one beneficiary automatically goes to their offspring.

And, admire you for putting fairness above personal gain.

Put your sister's share in trust for the children. Like a pp said, if the husband remarried the money could be gone.

Vitally important as pp said to ensure your sisters share goes to her surviving children and not her husband. Imagine him remarrying, dying, and second wife having everything and your sisters kids left with jothing

Has anyone noticed the post by @Quartz2208 ? It contains the solution to OP’s question. Check the precise wording of the will to ensure it fits within s33 and provided it does, nothing more needs to be done.

I'm presuming that the sister would want to ieave her share to husband. No mention has been made of the sister having children. And evenue if she did she still might want the money to go to her husband. Ask her what she wants and then act accordingly.

Your sister can't leave the money to her husband if she doesn't have it. It goes to her children, this happened to my dad. He and his aunty inherited from a cousin, as my grandfather had predecessed his cousin. My dad's aunty only got half. He got the other half as he was his dad's only child. His dad had left everything to my dad's mum, but that didn't alter anything as the cousin died after.

Power of attorney does NOT allow you to alter your mum's will at all. That'd be illegal, your mum had to be of sound mind to make the will.
Sorry you are going through this, it sounds awful.

No mention has been made of the sister having children

Yes it has. From the OP, "DSis has a husband and 3 kids".

To echo Collaborate, Quartz2208 has already given the correct answer.

Sorry I skim read it!

Thank you all for you answers, they've been very helpful. I'll get someone to look at the will and advise although it sounds like it may well be fairly straightforward. Thanks again, and thanks for the support, it's a horrible time but we're all doing the very best we can.