Jump to content

 

BankFodder BankFodder


Mary Hart

Leaving property in a will with conditions.

Recommended Posts

Hi,

 

I am the sole owner of our family home, where I live with  my partner and our two children. My partner has no interset in the property and we are not married.

 

I had planned to leave the house to my partner in the event of my death and ultimately it will be passed to our children when he dies (my current will leaves it to him), but he has recently had some financial difficulties. I do not want to leave a house to him that will then be used to settle his debts.

 

Can I leave the house to the children but state that he can remain in control of it unti lhis death. I say control rather than live in it because I want to potentially provide him with some flexibilty to maybe rent it out if he chooses or to sub let to supplement income.

 

Thanks for any advice

 

MH

Share this post


Link to post
Share on other sites

I'm no trust lawyer or have any particular experience with Wills – but yes you can.

You can leave it to your children with a life interest to your partner. That means that basically the children own the house in trust but whilst your partner is alive then he will have the beneficial interest in it to whatever extent you say and then it will revert to your children when he dies.

Tell him to watch his back!


Share this post


Link to post
Share on other sites

I'm also no tax lawyer – but I have a feeling that this would be very efficient thing to do – assuming that it is sufficiently valuable to incur inheritance tax. If you leave it to your husband then there will be inheritance tax. If he then leaves it to your children there will be more inheritance tax. My understanding is that if you leave it your children, there will be inheritance tax – but your partner won't have to pay any because he simply takes a life interest

All of this needs checking with somebody who knows


Share this post


Link to post
Share on other sites

It's just been pointed out to me by one of the site team – and I had forgotten – that there is no inheritance tax between spouses. I gather you are married – but on the other hand if you have had the children together then clearly you have a partnership which probably counts is the equivalent. I'm afraid that once again, I'm out of my depth – but it may well be that there would be no inheritance tax anyway.

However, the main answer is that yes you can leave your partner a life interest and then revert to the children


Share this post


Link to post
Share on other sites
Posted (edited)
12 hours ago, BankFodder said:

It's just been pointed out to me by one of the site team – and I had forgotten – that there is no inheritance tax between spouses. I gather you are married – but on the other hand if you have had the children together then clearly you have a partnership which probably counts is the equivalent. I'm afraid that once again, I'm out of my depth – but it may well be that there would be no inheritance tax anyway.

However, the main answer is that yes you can leave your partner a life interest and then revert to the children


OP states they are not married.

“common law marriage” isn’t recognised at law for inheritance tax (nor almost all legal situations)* [so there ain’t no such beast], though civil partnerships are.

 

Yes, sounds like OP wishes to will the legal interest in the property to the children, with a lifetime beneficial interest to the partner.

As the legal interest must be held as a joint tenancy rather than a tenancy in common : if the children (let’s say A and B) themselves have children (AA for A and BB for B),  if A or B die while holding the joint legal title it gets a bit more complex.

 

Testator dies. A & B hold legal title, as joint tenancy, on trust for the partner who has a lifetime beneficial interest, with A & B gaining beneficial interest on partner’s death.

 

A dies. B solely holds legal title, on trust, for

partner’s lifetime beneficial interest, and themselves, but if AA gets a beneficial interest or not depends on the Will planning (I suspect that “to be shared equally” A& B’s beneficial interest will need to be held as tenants in common, rather than joint tenants)


* “Common law marriage” can be recognised for Trusts / Equity, not as a pure legal concept, but as an implied / constructive trust due to “shared intent”.

 

It’s a good long while since I studied this, so am happy to be corrected!, and I suspect the OP should get advice on Will planning / if it is best to form a Trust to achieve their intent.

Edited by BazzaS

Share this post


Link to post
Share on other sites

If the estate(s) (& especially if the property!) exceed the inheritance tax threshold : proper estate planning will be key to avoiding multiple IHT hits .....

Share this post


Link to post
Share on other sites

Hi, I did exactly this with my property in a slightly different way, the good news is that it only took 2 visits to a quality Law Firm to get it how I wanted it and the whole thing cost under £300.

 

This my be of relevance to you as what I wanted to do was leave my partner, who has no financial interest in my property, the right to remain in it until she either died or no longer needed it.

 

I could not leave the property to her and be sure that she would pass it on to my relatives once she was gone, as she has 2 hideous money grabbing children and an equally hideous ex husband who has never accepted that he and my partner are divorced.

 

As above the Will stated that the property was to be held in Trust made up of the beneficiaries that I ultimately wanted the property to go to and they would allow my partner to live in it or move and down size with caveats such as any capital from downsizing not used to renovate another property must go into into a Trust fund administered by the same Trust and money would not be released other than for specific reasons.

 

This was the only way to ensure that the minute I croaked the hideous children who have hated me from day one could not come holding their hands out for a payout.

 

I would add to this that after agreeing this with my partner and her understanding the reasons why (the kids have been truly awful to me yet I have helped them out several times), she left about a year later with no notice and no reason given, I just came home one day and she'd gone. It seems that she told the kids what I'd done and they, knowing they would receive no benefit, stepped up their pressure and she caved in and left.

 

Upsetting at the time but life is so much better when you are not surrounded by hateful people and my law firm changed my will to a simple will leaving everything to my relatives for less than £100.

 

 

 

  • Like 2

Share this post


Link to post
Share on other sites

Thanks everyone.

 

Homer67, thank you specifically as that seems precicely what Ii want to do; I want him to be able to control, downsize if necessary, rent it out if he chooses etc for his own benefit, but ultimately pass it on to the kids (who are also his, and this is his wish too). Basically I want him to be able to behave as if its his house, but without the risk of it actually being his.

 

Any further thought are also much appreciated.

 

MH

Share this post


Link to post
Share on other sites

This has already been mentioned but I wouldn't be setting up a trust without seeing a wills and probate lawyer.

 

HB


Illegitimi non carborundum

 

 

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 Caggers

    No registered users viewing this page.


  • Have we helped you ...?


×
×
  • Create New...