Wills - What happens when one of you die?

[Mimzi1]

Hello,

We are in the process of writing our will and have been advised that because we want to leave our estate to our daughter then if I die for example before my husband, he would be the main beneficiary but he would hold the house together with our daughter, I think they said tenants in common. I think it’s because we both said if anything happened to either of us and if that other person met someone new or something changed, we would always want our daughter to not go without, she would always get something? Is this the general standard that people follow? I’m just curious to know our options before we go ahead. What have others done who want to make sure their child or children benefits from any estate?

I did mine in a rush using an online service, so I left everything to my husband then if he predeceases me to my children in equal shares

I felt a bit uncomfortable with it as I’d rather leave something directly to my children ie not rely on my husband to do the right thing.

But, I didn’t want it to turn into a big debate and as husband is the breadwinner if he died I’d rather it all direct came to me 😬

I expect we’ll redo it sometime using an actual lawyer

Traditionally you'd have mirror wills where on first death the residue, after any pecuniary legacies, goes to the spouse. On second death the residue is divided equally.

If there was plenty of money and IHT was being considered then legacies to children on first death might be an amount close/equal to the IHT threshold. That sum was then off the books at death #2.

Putting the house into a trust as tenants in common with offspring is a new one on me but it was suggested by a financial adviser we saw recently. They copied be advice from within their organisation written in terms of life tenancies and remaindermen. Having worked in a legal environment (which to be fair they know) I got the gist but would need more...

I'm not sure how far it really protects the kid(s) if I/she fall big time for a new partner after being widowed. Nor do I understand whether, or if so it would be effective, it might move part out the estate out of reach of the Council if a Care Home Place was a thing.

It also introduces new risks. What if you fall out with your kids. What if one of them screws up in one form or another and goes bankrupt?

You need to have the whole thing, upsides and downs, explained in clear english.

The problem with mirror wills is that the surviving spouse can change their will after you die, so the outcome may not be what you want.

The best way to guarantee that your daughter will inherit would be to own the house with your husband as tenants in common, so you would each own 50%. You could then leave him a life interest in your 50% with it passing to your daughter when he dies. That would guarantee that he couldn't be forced to sell the house (but it wouldn't prevent him from selling the house if he wants to downsize or move elsewhere) and it would ensure that your daughter inherited at least 50% of the property.

I think this is good advice.

We are as outlined by pp - TIC lifetime interest. The rest of my money goes to the children. We aren't married though so no IHT benefit.

I would never leave all the DH/DP as seen/heard of too many situations where they then remarry and DC lose out.

I know life isn't straight forward but I am hoping/planning to enjoy my money and give as much away to DCs as I can.

Excellent point about mirror wills from @prh47bridge . My elderly neighbours had mirror wills. They had no children and left everything to his nephew (who they barely saw).
He died first at 99, and she inherited everything. She died a year later at 96 and up pops the nephew ready to claim his inheritance. Only he couldn’t - she had changed her will after her husband died and left everything to a donkey sanctuary. That was 2.5 years ago and the will is still being contested, leaving the house empty and deteriorating.

Whilst you are doing your wills it would be a great idea to do Power of Attorney for each of you.
My mum and stepfather owned their house as tenants in common but in unequal shares, 80/20 in her favour. She thought that he would die first as he was older and in very poor health. In fact, she died first. At the time of her death he was in a respite home for 2 weeks, to be fully assessed for his substantial care needs. He never went home and is in full time residential care with a DOLS as he does not have capacity. It has taken me 18 months to apply for and receive Deputyship to handle his affairs, and only last week was I able to put his house on the market. It’s been an absolute nightmare. Having POA in the first instance would have made the whole thing so much simpler.
You don’t need a solicitor to do this, it’s simple to do online.
https://www.gov.uk/power-of-attorney

Just read a few threads on here in which adult DC - many years down the line - have found they are entitled to nothing.
They may have been told before the death of Spouse1 that they wd get everything on the death of Spouse 2. They may have helped care for either or both parents. But when Spouse 2 dies s/he decides that a new love interest shouldn't have to "lose their home" when they die. New Love Interest has own adult kids - who get the lot.

Once you've left it to Spouse 2 - you have no control at all. Spouse 2 can get scammed, seduced, gamble it, lose it, pay for care, change their mind. And that's your kids with nothing.

That may be a risk you choose to take however.

Our wills are set up so that everything is essentially left to the DC but is looked after by the surviving spouse in the event of one of us dying.

It's tough though. Even when you think your will is watertight, contesting it can see your wishes overridden. I saw it happen when sil died.

DH's step grandad is trying his hardest to ensure that he leaves everything to his second wife but knows his DC will contest it and possibly succeed. We've advised he spends it now to avoid the issue!

Unless there's a big back story here(?) step gd's DC won't succeed. He can leave his money to his second wife and there's nothing they can do about it.

Unlike some other European countries ( eg France)you are not obligated to leave anything to DC unless they are financially dependent.

To give a real life scenario that you want to avoid.

Mum died, kids were 21, 18, 16 & 5, Dad inherited everything as no will.

Dad remarried to woman with 1 child.

Dad died, kids were 28, 25, 23 and 12 + stepsibling.

Dad had a mirror will with wife, she got everything on his death, the intent was that her will would eventually leave everything split between the 5 children.

Wife has now remarried to a man with 2 children. They live in a beautiful house, in a very exclusive location, purchased from the sale of late husbands house/land/business, have retired in their 50s and live a life of luxury.

Original 4 kids anticipate getting zero inheritance.

This is exactly what we have done.

We originally bought the house as joint tenants, but changed to tenants in common a couple of years ago (very simple).

@Fifthtimelucky Hi what is the difference?

I am not a lawyer so there may be a better legal description but my understanding is that if you are joint tenants, you both own all of the house and it automatically passes to the surviving partner.

If you are tenants in common you each own half of the house, so you can each leave your half to whoever you want.

The best way of protecting my children's interests is to leave my half of the house to them. If my husband ended up with the whole house he could disinherit my children and leave the whole house to someone else.

Equally, if we were joint tenants and he died first (which is more likely) I would get the whole house and could leave it to our children, disinheriting his child from his first marriage.

I don't think either is at all likely, but it seems to happen surprisingly often!

This happened in my family years ago - my great grandfather’s second wife inherited all the family money my great grandmother brought to the family. Her children didn’t get a penny despite the money all coming from their mother’s side of the family.

This was years before I was born, but it’s a family legend!