Writing a will- do you have your partner AND kids as beneficiaries?

Another2Cats · 14/08/2024 19:31

A few thoughts:

"I have recently received inheritance,..."

Anything from that inheritance that you may wish to specifically leave to your children should remain in an account solely in your own name. If it is placed in a joint account then that will automatically pass to your DH regardless of anything you put in your will.

"...I don't want them to just piss it all away when they turn 18 😳 so it's just earmarked in my head for them just now. Maybe that's not wise though??"

It is certainly possible to specify an older age in a will when they will inherit, for example 21 or 25. Your solicitor will explain the details of that.

"I'm not sure whether to just put that my estate all goes to DH, or would I specify that he gets a % and each child gets a %? I do trust DH but part of me thinks if it's not written down then the kids might not get the inheritance I want them to get (as who knows what might happen in the future, in a worst case scenario!)"

If you read some of the threads here you will see that the "worst case scenario" does actually happen from time to time.

Just speaking personally, I would suggest maybe changing the ownership of the home to tenants in common rather than joint tenants (ie you each own 50% of your home rather than owning the home jointly) and then leaving your 50% share to your children with a life interest for your DH to live there.

And, of course, he has a mirrored will saying the same thing.

This ensures that at least half of the family home is left to the DC and will also protect half if one of you later goes into care. Again, your solicitor should explain this in detail.

"Alsos I want to put a 'catastrophe clause' in, in the event that me, DH and kids are all obliterated at the same time. How many beneficiaries do you think would be OK to put in, in that event??"

As many or few as you want, it really doesn't matter. It could be your brothers and sisters or it could be your nephews and nieces etc. You can also name charities if you wish.

Generally speaking, if your children also die at the same time but they have children of their own (so, your grandchildren) then their share will be left to your grandchildren.

My understanding is that if you do not include a "catastrophe clause" and all beneficiaries are dead (and don't have children of their own) then the rules of intestacy apply, it is referred to as a "partial intestacy".

So, in the situation you mention, everything would be left to your parents. If they were not alive then any of your siblings would be next. After that comes half-siblings.

From there it would go to your grandparents. After that it goes to your aunts and uncles or then your cousins.

After that it goes to any half uncles or aunts (eg if your grandparents remarried and had children from the second marriage - although, they don't actually have to have been married of course)

If none of the above are alive then the estate goes to the Crown.

Original poster

tricerotopsrule · 14/08/2024 20:51

@Another2Cats oh that is so helpful thank you! Lots to think about. Part of the reason for the will is to ensure my sister doesn't inherit anything from me or have care of our kids (long story but we are estranged). I only realised recently that she would if we were all obliterated 😬

I hadn't thought about the house issue too. Although I did wonder about specifying DH gets my share of the house and then the kids get a % of my inheritance (which doesn't include the house).

Hmmmmm

OP posts:

TheoriginalMrsDarcy · 14/08/2024 22:16

I would name your children as the beneficiaries and husband can have life interest in the house. You read so many stories on here where the wife dies first, leaving everything to the husband and trusting him to pass everything to the children. Then the husband remarries and then leaves everything to the new wife. The children get nothing.

I have discussed what age to leave inheritance to children with my DH and we think 25 would be a sensible age.

FriendlyNeighbourhoodAccountant · 14/08/2024 22:20

tricerotopsrule · 14/08/2024 20:51

@Another2Cats oh that is so helpful thank you! Lots to think about. Part of the reason for the will is to ensure my sister doesn't inherit anything from me or have care of our kids (long story but we are estranged). I only realised recently that she would if we were all obliterated 😬

I hadn't thought about the house issue too. Although I did wonder about specifying DH gets my share of the house and then the kids get a % of my inheritance (which doesn't include the house).

Hmmmmm

Do you own the house as joint tenants or tenants in common?

NewspaperTaxis · 14/08/2024 22:32

Some advice for older will makers perhaps... it does help to leave money to the sons or daughters rather than the spouse because otherwise if it comes to over a million, you get inheritance taxed on that later. So, eg, Mum dies leaves all her savings to Dad, that takes his savings to over a million so when he dies a few years later, son and daughter get taxed on that when they wouldn't have otherwise.

Another2Cats · 14/08/2024 22:41

tricerotopsrule · 14/08/2024 20:51

@Another2Cats oh that is so helpful thank you! Lots to think about. Part of the reason for the will is to ensure my sister doesn't inherit anything from me or have care of our kids (long story but we are estranged). I only realised recently that she would if we were all obliterated 😬

I hadn't thought about the house issue too. Although I did wonder about specifying DH gets my share of the house and then the kids get a % of my inheritance (which doesn't include the house).

Hmmmmm

"...or have care of our kids"

It is quite normal to include in a will a statement saying who you wish to care for your children in the event that both you and DH pass away.

It's usually best to have a word with them beforehand though.

I actually come from quite a large family (my dad has 5 siblings and my mum has 3 siblings - so I have 8 sets of aunts and uncles). In the will that my parents wrote when I was young they nominated one of my mum's brothers and his wife to be guardians.

"long story but we are estranged"

I am in a similar situation. I have long been estranged from my sibling. When our DC were young our will stated that my DH's brother and his wife would be guardians. We spoke with them before adding this to the will to make sure they were ok with it.

We also decided at the time to make them the trustees of the inheritance as well. However, we were advised that is also a good idea to appoint a separate trustee as well who is not related to the guardians in order to guard against any conflict of interest, especially if the inheritance is quite large.

"I hadn't thought about the house issue too."

Here's an example. The house is owned as joint tenants. Your DH passes away and, as joint tenants, the house automatically passes to you.

A few years later you fall madly in love with some guy and you decide to get married. Unfortunately, you pass away first so the house passes automatically to your new husband and your DC get nothing.

22mumsynet · 14/08/2024 22:49

NewspaperTaxis · 14/08/2024 22:32

Some advice for older will makers perhaps... it does help to leave money to the sons or daughters rather than the spouse because otherwise if it comes to over a million, you get inheritance taxed on that later. So, eg, Mum dies leaves all her savings to Dad, that takes his savings to over a million so when he dies a few years later, son and daughter get taxed on that when they wouldn't have otherwise.

This is incorrect. If you leave a gift in a will to a child it uses up your ‘nil rate band’ (‘NRB’). The £1m NRB is made up of a £325k tax free allowance plus a £175k allowance if a home is left (broadly) to direct descendants. This is £500k which is transferable to a surviving spouse. If for example £100k is left to a child on first death then this uses up £100k of NRB so there is only £400k NRB to transfer. So on second death only £900k NRB not £1m.

OP your solicitor will be able to advise you on trusts to carry out your aims. Consider a life interest trust for spouse. Be careful of a specified age for a child, what will they be like at say 25? Will they have gambling problems? Drugs? Controlllig partner? Divorce? You don’t know. Can use trusts so trustees decide when they get it. You leave them guidance in letter of wishes you trust them to follow. Use a STEP qualified solicitor for proper advice. Not someone who dabbles in wills or a will writer as they are not trained, insured and regulated in the same way as a solicitor.

Comefromaway · 14/08/2024 22:54

I have left the contents of my ISA to my kids (or their children if they pre-decease me) a few small/charitable legacies from my personal account then everything else to Dh.

im about to change things though and make a mirror will with Dh so we can specify certain items if anything happens to both of us. Eg. Dd loves a painting we own but Ds wants our piano!

Another2Cats · 14/08/2024 22:59

NewspaperTaxis · 14/08/2024 22:32

Some advice for older will makers perhaps... it does help to leave money to the sons or daughters rather than the spouse because otherwise if it comes to over a million, you get inheritance taxed on that later. So, eg, Mum dies leaves all her savings to Dad, that takes his savings to over a million so when he dies a few years later, son and daughter get taxed on that when they wouldn't have otherwise.

That's slightly mistaken.

"... it does help to leave money to the sons or daughters rather than the spouse because otherwise if it comes to over a million, you get inheritance taxed on that later."

Not really. If a person leaves everything to their spouse then there is no inheritance tax (IHT) to pay at all. Also, the tax free allowances that they have (up to £500,000) are passed on to the surviving spouse.

In that way, if a couple have mirror wills leaving everything to each other and then the children then the couple can pass on up to £1million free of IHT.

"So, eg, Mum dies leaves all her savings to Dad,... so when he dies a few years later, son and daughter get taxed on that when they wouldn't have otherwise."

The thing is though that son and daughter would be taxed on anything above up to £500,000 that they receive.

This is because a person can pass on up to £500k to their direct descendants free of IHT. Anything above that is liable to IHT.

So, here is an example. Let's say that mum's estate is worth £1 million and dad's estate is worth £1 million.

Mum passes away and leaves everything to dad. There is no IHT to pay and also the £500k allowances are passed on to dad.

When dad passes away his estate is worth £2 million and so his estate has to pay IHT on £1 million (as there is £1 million of allowances available) and the children get £1.6 million.

In contrast, mum passes away and leaves everything to the children. Her estate is worth £1 million and her allowances are £500k so the estate pays IHT on £500k. The children receive £800k.

Dad then passes away and his estate is also worth £1 million with allowances of £500k. The children receive £800k

In each case, whichever way you do it the children are looking at getting £1.6 million.

The only situation where this would work out better for the children is if dad were to live at least seven years longer than mum and make a gift of the money to the children at least four years before he died (preferably seven as no IHT would be due in that case).