Unmarried, need to update wills

[user50and]

We are an unmarried couple, both 52, two DC each from previous marriages (mine are 14 &19, his 18 & 20), no plans to get married. We've been together 12 years this years and bought a house together 3 years ago. On the deeds as tenants in common and own the property 50/50. We have an appointment next week to do our wills as they haven't been updated since we bought together. Property worth around £850k, mortgage is £300k.

What do I need to think about before the appointment? Not bothered about each others pensions or savings, just want my interest in the house to be protected for my DC.

My DC's DF passed away in 2019 so I was thinking of naming DC19 as DC14's guardian? Rather than DP? (Sorry if I sound a bit harsh towards DP, I'm not, I've just been burnt in the past, specifically when exDH passed)

Anyone been in a similar situ?

Are there other assets either way apart from the house?

I'm wondering about potential for IHT.

No other assets no.

He has his own business though if that makes a difference? It's a Ltd company with him as a
sole Director.

To protect your interest in the house for your children, leave your partner a life interest in your share of the house with it passing to your children when he dies. That will ensure he can continue living there and can downsize or move elsewhere if he wants or needs to, whilst making sure that your half of the equity in the house will go to your children whatever happens.

Thanks prh4 and I'm assuming vice versa should anything happen to him?

Yes, if he does the same that will protect his share for your children regardless of anything that happens after he dies.

I'd be wary about life interest. He could live to 95 and your DC would be much older at the point they inherit.

You could do house to be sold within x years (or remaining partner buys out), so your DC get sooner.

Also if older DC is guardian, how will they support the younger one and have somewhere to live if their inheritance is locked up?

What prh47bridge said.

BUT I would consider how this could work if the worst were to happen in the near future. Your Dp could live until his 90s, meaning 40 years when your Dc were unable to access their inheritance. Even watch your Dp meet someone new and move her in in 20 years time!

I would leave him say 5 years in the house, or until he sells or co-habits, whichever is the sooner. And then re-visit the terms once you reach your 70s, all Dc are adult and independent etc.

Where would Dc1 & 2 live while Dc2 is still a minor? Hopefully with your Dp as they have lived with him for so long, but it will be 7 or 8 years before Dc2 finishes Uni.

As you are leaving your share of the house to your Dc your IHT threshold is £500k. Your pension is not generally considered part of your estate for IHT purposes - check who the beneficiaries are. Your DC1 would presumably need your pension to care for Dc2?

Thank you everyone. My DC are named 50/50 beneficiaries on my pensions. DC19 is working, not at Uni.
They (my DC19&14) would still live with DP should anything happen to me. DP would like to be DC14 named guardian, however I worry if he was to meet someone new he could potentially uproot DC14 away from friends and my family.
Should anything happen to DP his DC still have their DM.

Yeah I would stay away from 'life interest' wills. Your DC will be negatively impacted by this.

Stick to your guns about DC19 being guardian for DC14.

Also make sure your will is stored safely with HM courts & tribunals / probate service. Which I'm sure your solicitor will know about.

Give a copy of your will to DC.

Have a list of all bank accounts, properties, pensions-with whom-you have them with. Update regularly, as and when needed. Put this alongside your will.

Get life insurance where your DC are named beneficiaries. Put it in trust if the payout is worth more than the IHT threshold. Lifesearch are quite good. Or just any comparison website.

If OP does not make a life interest will, she risks leaving her partner homeless. Yes, he could live a long time after she dies. But her children's share of the property will be protected, and the value of their share will increase as the value of the property increases.

I agree
around 5 years for partner to live in house - or maybe more to take your children to 24 - he’d have enough to buy his own place and yiur children could get their inheritance

That is still a life interest trust.

Whilst a life interest trust will always terminate when the surviving partner dies, it can be set up so that it will also terminate in some other circumstances, such as if the surviving partner remarries or starts cohabiting with someone else. It can also be set up to last for a certain number of years or until a specified date.

Interesting that pretty much everyone saying OP shouldn't give her partner a life interest is actually recommending doing exactly that.

@Magatha @Hmmmmaybe You keep mentioning about kicking the surviving partner out. You do realise that the same would apply to the OP as well?

Men often die earlier than women and, to follow your suggestions, the OP would be kicked out of the family home after a few years rather than seeing out her days there.

Is that really in the OP's best interest?

This argument is a fallacy. If he were to live to 92. Does that mean her DC has to wait till they're 59 and 54, till they get their inheritance?

No point in the property value going up, if they can't utilise that property in the here and now, whilst they are youngish and need it most. Also, to use the inheritance in the way they want. So that they can one day buy their own property in an area of their choosing, eg where career/ jobs/friends/partners are etc.

Why not just make it so that, upon death of one partner, the sale of the property is triggered, (for the safety of the remaining alive partner/DC not becoming homeless), the house is sold as part of a chain, so that no one is left homeless. Everyone just downsizes instead.

Honestly OP, for the sake of your kids, don't do a life interest will. Your kids will secretly begrudge you for it.

You and your partner would have been better off just getting two separate smaller, cash brought properties, each on your own names respectively. Even if it meant you were next door neighbours or lived down the road from one another.

That way both of your sets of kids would have an easy and clear cut time, when the worst does happen one (hopefully a long time away) day.

Don't underestimate how quickly a partners decent nature/loyalty etc can change, upon becoming a widower, and under the influence of a new partner.

How is my argument a fallacy? It is a statement of fact. If she does not leave her partner a life interest, her children could force a sale of the home she and her partner currently share. There is no guarantee that there will be sufficient equity in his share of the property to allow him to buy something adequate to meet his needs.

You seem to think that OP should force her partner to instantly move out of the home they share when she dies (with the corollary that, should he die first, she would then be forced to move).

As a rule, people don't inherit when they are young. The average age of inheritance is 61. If her kids secretly begrudge OP setting things up so her partner can continue to live in the house they have shared for many years, I don't think much of them.

And the whole point of a life interest is that it protects OP's children regardless of any change to her partners nature or loyalty or the influence of a new partner.

Most of us have to wait for our second parent to die before we can have the house etc.

No different here.

Most people don't inherit anything of note until their fifties or sixties. That's just how it is when the average lifespan is in the eighties.