If I own a house with DP mortgaged and one of us dies what happens ??

[eyesandearsandamouth]

We have mirror wills giving each other everything and life insurance to pay off the mortgage, no other assets, but the mortgage is massive. But would there be an inheritance tax as we aren't married? We have two children, joint accounts.

Bump anyone know

I don’t think so if it’s a joint mortgage

There did used to be inheritance tax for assets over 325k but in 2020ish it changed to 1 million

Do you own it as joint tenants or tenants in common?

For the love of god, see a solicitor and a tax advisor. There are loads of variables, including the form of joint ownership, so you need proper advice. The short answer is that inheritance tax may well be payable, but you can probably reduce the liability.

www.gov.uk/inheritance-tax

This is one of the examples where being married makes a huge difference. IHT on everything over £325k, unless you leave it to a spouse or civil partner or leave property to children or grandchildren.

citizensadvice:livin-together-marriage-and-civil-partnership/living-together-and-marriage-legal-differences

If you inherit money or property from an unmarried partner, you are not exempt from paying inheritance tax, as married couples are.
See GOV.UK for more about inheritance tax.

Though it would also depend how you hold the property Joint tenants v tenants in common- joint tenants on death it goes to other holder.

Only if you're married an leave it to a spouse (or civil partner).

Your inheritance tax insurance options

I did wonder if the insurance payout would be except but reading above it looks like it wouldn't.

So agree with a PP you do need to talk to legal and tax people if you don't marry or get a civial partnership.

On the mortgage issue if you are worried about paying it if one of you dies, this is exactly what you need life insurance for

however, it’s far more likely they one of you will get Ill and not be able to work, than die. This is where you need critical illness cover as well as life insurance.

May I recommend a quick trip to the register office? This is when it's more than just a piece of paper.

Wills can be changed in 10 minutes.

So can the Life Insurance Policy beneficiaries.

On the mortgage issue if you are worried about paying it if one of you dies, this is exactly what you need life insurance for
OP has this - she is now worried because they aren't married there will be an inheritance tax bill on top - which there may be.

As StCharlotte says it's one of those time it's more than a peice of paper.

When I was widowed the mortgage was paid off by Mortgage Protection insurance. Do you have insurance for the mortgage? It did take several months of chasing to get the money but eventually paid out more than the remaining mortgage due.

Own as tenants in common - yes value of house liable to inheritance tax if whole estate over the limit. Own as joints tenants and the house passes direct to the surviving spouse without even forming part of deceased's estate.

Even if owned as joint tenants, the dead partner's share of the house forms part of the estate & is subject to IHT above the 325k limit. My IFA was very clear on that point.

That's not true - a joint tenant owns the entire property 100% as does the other person. Upon death the survivor still owns their 100% - there is just no longer anyone to share that 100% with. There is literally no property that the deceased owns and can therefore go into their estate. See https://www.familylaw.co.uk/newsandd_comment/how-does-a-jointly-held-property-pass-on-death

There are so many of these posts on MN atm. They give me palpitations tbh. People enter into massively expensive joint ventures without making sure everything is covered legally.
Please, please OP, get proper advice from your mortgage company and life insurance company. This should have been all sorted out when you got the mortgage.
What are the terms of the life insurance policy? Whose name is it in? A will on its own is very flimsy given that it can be easily changed without anyone else's knowledge.
Getting married would solve these issues up to a point, but if there are children involved you need a lot more than a will.

If you have children you urgently need IHT and estate planning advice.

We are in this position, we are tenants in common and so each others bit of the house is left to each other in our wills, technically liaible for IHT although the house is not worth enough to qualify at present

However I dont want to be married, never have done.

I don't think you should be asking Mumsnet. Go and see a solicitor and get your questions answered properly as it's really important

Recently brought a house with my partner and it had 3 options to choose from during the paperwork process. They were to decide what happens with the house if one of us dies.
We choose the option that meant it would automatically go to the other person whos name is on the mortgage.
I can't remember both of the other options but I remember one of them was if one of us dies that half would automatically go to our children.

Maybe ring up your mortgage provider and ask them what yours says etc

There is frequently brilliant advice on MN, also there is often conflicting advice even when the answer is actually black/white or right/wrong. It's good to read it all, ask questions, and then go to a professional. Unfortunately on here, you have no idea if people have the qualifications they claim to have and some others will state something as FACT, when it's actually just what they think should be fact!'

it's worth paying for legal advice! Though, I have to say, you're better organised than a lot of people who have bought together!!