Will after divorce

[TuesdayFilmClub]

Hi, looking for advice about my will.

I have recently divorced and thinking about getting a new will drawn up. The split was amicable and neither of us are looking for a partner currently, and if we did find someone else I would look at my will again.

I trust my ex wife implicitly to do the right thing by the kids. So, I intend to leave my entire estate to her in the event of my death. My thinking is that, she can pay off her mortgage, even reduce her hours at work to look after the kids while they are young (10 and 12) and support them through university financially.

My question is this, would this be a sensible thing to do or would it be better to leave it to her and my two children? My worry is that if I leave it to all three there wouldn't be enough for to pay off her mortgage.

Once the kids are adults I would change it so they are the sole beneficiary.

What would be the sensible decision?

In principle, it's a lovely thing to do, but I think you need advice. Leaving money to someone who's not a spouse or a child changes inheritance tax limits.

I would leave it to the kids and have her as a trustee until they are adults. Could you take out a life insurance policy that she is the beneficiary of until the children are self sufficient? You never know what could happen. She could marry again and divorce/ die and the money would be gone.

Thank you both for your comments. The tax implications are something I hadn't fully appreciated. I would definitely look at my will again if either of us got into another relationship. I get a death in service payment from work, maybe I could leave her that and the kids get the proceeds from the house sale.

I would not trust anyone to see my kids right financially - have you not read the many many stories on this board.

leave everything to your kids with her a trustee while they’re young. She will be able to use that money for things like paying off the mortgage, but any money used to do that will give the kids an interest in the property so she can’t just leave everything to a second husband or more kids if she had them or the donkey sanctuary.

Leave it to your children and have her as a trustee. People change.

I don’t understand why you would leave anything to her? She could remarry, die, and leave everything to her new DH. Your kids would get nothing.

I would also leave it all to the children and set up a trust. If the worst happens, they would be able to support themselves through university with your money.

This. If you are happy with the money eventually going to her second husband and your kids not getting a penny, leave the money to your ex.

It doesn’t even have to be malicious / deliberate on her part - if she doesn’t realise marriage invalidates a will, the second spouse inherits the first big chunk of her estate. If she and a second spouse get divorced, if the inheritance has been commingled (such as by paying off a mortgage), it’s a matrimonial asset and gets split on divorce.

Edited to say: Also, if she doesn’t leave her spouse in a will what he would have got on divorce, he can make a claim against her estate and it will be successful.

Thank you all for the advice. These are all very good points. I just don't want the three of them to struggle if I was to die while the kids are young. I will take all this on board and have another think.

You’re divorced. You need to leave your estate to your DC. Just imagine this - you die and leave everything to her. She remarries very soon afterwards, has another child and 5 years later she dies without a will. Guess who will get her money? Mostly her widow. He would get the first £332k plus half of everything else. The rest would be split between her 3 DC. If your estate is worth £600k, and it all passes to her, that would eventually leave your DC with just £44k each.

In your situation, I would take out a reducing term life insurance to cover her mortgage which would pay out if you die - but only to the value of her current outstanding mortgage. Name her as the beneficiary. Why would she need to reduce her hours to look after the DC if you die? They’re teens, they don’t need babysitting.
Your DC should inherit any death in service which can then be invested for their future. The same with any other pension and equity in any property you own.

That’s not correct. He would have to prove that he was financially dependent on her, and even then it would be a huge stretch.

I agree with others that I’d aim for the children to be beneficiaries rather than the ex but it is nice to see an amicable divorce with someone thinking about the children and not trying to screw then! It seems quite rare.

I’d think about it in terms of the current ages of 10 and 12 mean you have 8 and 6 years until the children are 18 and could feasibly inherit in their own right. I’d be more inclined to look at a level term life insurance to cover what you might be paying in maintenance for the next 8 years. If you died after that the children would be 18 and could use the money themselves to cover university etc. downside to that is you’d have a cost rather than just allowing your ex to inherit but if you have to re-write your will a few times there would be a cost associated with that too.

A common myth. The ‘financial dependence’ requirement *does not *apply to a spouse. A spouse is entitled to ‘reasonable provision’ which the courts typically interpret as the amount he / she would have got on divorce.

Financial dependence only applies to unmarried partners.

Edited to say: it’s the difference between s.1(2)(a) (spouses) and s.1(2)(b) (everyone else) of the Inheritance (Provision for Family and Dependants) Act 1975

I'm glad I asked this question, there have been lots of aspects I hadn't considered. Thank you everyone for your replies.

On reflection I will put my children as my sole beneficiaries and take out life assurance until my youngest reaches 18, so my ex will get a lump sum in the event of my death. I feel happy that this will bridge the financial gap and my kids will definitely receive all that I intend to leave them. This also future proofs if either of us meet someone else.

In England and Wales, a spouse who is left little or nothing under a will can potentially make a claim against the estate, but the claim is not automatically based on what they would have received on divorce.
The relevant law is the Inheritance (Provision for Family and Dependants) Act 1975. Under this Act, a surviving spouse can ask the court for “reasonable financial provision” from the estate if the will (or intestacy rules) do not make adequate provision for them.
A few important points:

• A surviving spouse is in a stronger position than most other claimants under the Act.
• When considering a spouse’s claim, the court may take into account what the spouse might reasonably have expected to receive if the marriage had ended in divorce rather than death. This is often called the “divorce cross-check.”
• However, the court does not simply award the same amount as a divorce settlement. The circumstances are different, and the court considers factors such as:
• the size of the estate;
• the financial needs and resources of the spouse;
• the needs of other beneficiaries;
• the length of the marriage;
• the age and health of the parties;
• any obligations the deceased had toward the spouse.

Whether the claim succeeds depends heavily on the facts. For example:

• If a husband is left nothing after a long marriage and the estate is substantial, a claim often has a good prospect of success.
• If the spouses were separated for many years, financially independent, and the deceased had good reasons for leaving assets elsewhere, the claim may be weaker.
• If there was a financial settlement on divorce before death, that can significantly affect the position.

If you can tell me:

1. Were they still married when she died?
2. Were they living together or separated?
3. Roughly how large is the estate?
4. Was the husband left nothing, or just less than he expected?

I can give a more specific view of how likely a claim would be to succeed.

Don’t leave it to your wife as you could have had this will last week, got hit by a bus the following day and next year when your kids are still young, she marries a prick and gets divorced so gets all your estate which you left to her. Leave it to your kids and if possible, restrict access until they are older or for uni etc.

I don't think you need to take out the insurance as you have a 'Death in Service' provision. Your ex wife would be your 'nominated person' then you change it to the kids' names when they're 18.

But he could die in a few years when her mortgage balance is £1000 but his DIS is £150000. Are you suggesting she gets the lot?

Following the divorce my ex has a larger mortgage than me, hence why I would like to help in the event of my death. Unfortunately, my DIS wouldn't be enough to cover putting both kids through uni but it would reduce the amount of life assurance I would need. But, as you say, it's only until they are old enough to inherit.

Speak to a solicitor. If you leave all your assets in trust for your children you can specify in your will that your trustee can use the funds to invest in a property they will be living in. That means your funds could pay off the ex wife's mortgage but the children would have a financial interest in the property. If ex wife remarries she could buy them out but your assets remain with your chlldren.

Take legal advice.