Free wills month - any good ?

[kingrollo]

Are free wills offered by many charities any good ? - or is there a sting in the tail ?

I only have simple affairs no overseas properties or business interests?

Any pitfalls to look out for ?

 

[vickster]

Are free wills offered by many charities any good ? - or is there a sting in the tail ?

I only have simple affairs no overseas properties or business interests?

Any pitfalls to look out for ?

There is an expectation I think that you leave something to the charity in the will (so choose a charity that you would leave something to anyhow).
As an alternative, I got support to do will via a prior home insurance's legal cover (as an alternative to a pure DIY or solicitor)

 

[T4tomo]

If the budget reduces inheritance tax thresholds significantly then you might want to actually pay for some advice. The simple (for couples) we each leave everything to each other and then to the kids when the 2nd of us pops off could be very IHT inefficient.

Even simple stuff like leaving your half of the house to kids in trust but for your partner to enjoy in their lifetime, could make a big difference and protect at least half of it from being accessed for care-home costs should that be a factor.

 

[wiggydiggy]

If the budget reduces inheritance tax thresholds significantly then you might want to actually pay for some advice. The simple (for couples) we each leave everything to each other and then to the kids when the 2nd of us pops off could be very IHT inefficient.

Even simple stuff like leaving your half of the house to kids in trust but for your partner to enjoy in their lifetime, could make a big difference and protect at least half of it from being accessed for care-home costs should that be a factor.

My parents have done this, I'd very much recommend paid advice on how to proceed and when dealing with the land registry to make the necessary changes, though some things can be done yourself e.g. registering the trust with HMRC for tax was a few forms for me online.

It does raise some interesting moral questions though - if a surviving parent wanted to sell they would only get 50% of the sale proceeds which kind of locks them into staying put. I would have preferred to have some input when it was setup to allow for them to move freely (whilst retaining the trust protection) but whether that was possible doesn't matter now as it is what is and I'll support them regardless.

Professional paid advice every time if you want to do a trust.

Are free wills offered by many charities any good ? - or is there a sting in the tail ?

I only have simple affairs no overseas properties or business interests?

Any pitfalls to look out for ?

Both my parents started with a free will, which evolved into paid services. Its worth doing as a starting point.

 

[T4tomo]

It does raise some interesting moral questions though - if a surviving parent wanted to sell they would only get 50% of the sale proceeds which kind of locks them into staying put. I would have preferred to have some input when it was setup to allow for them to move freely (whilst retaining the trust protection) but whether that was possible doesn't matter now as it is what is and I'll support them regardless.

down sizing is still very possible, the surviving parent (& kids trust) sells the existing home buys a new place but the kids trust may have say a 30% share in the new place (and have converted 20% of the 50% into cash).

When parent 2 goes, only 70% of the property value is in the estate for IHT purposes (or available for care home fees clawback).

of course if the kids want to behave like brats and not make any of their 50% available to reinvest in surviving parent's new property then they are entitled to, but then surviving parent could always disinherit them....

 

[wiggydiggy]

down sizing is still very possible, the surviving parent (& kids trust) sells the existing home buys a new place but the kids trust may have say a 30% share in the new place (and have converted 20% of the 50% into cash).

When parent 2 goes, only 70% of the property value is in the estate for IHT purposes (or available for care home fees clawback).

of course if the kids want to behave like brats and not make any of their 50% available to reinvest in surviving parent's new property then they are entitled to, but then surviving parent could always disinherit them....

I'd have to explore the will, and the trust, in detail to know how it would work for us but I've already said to them if they did want to sell then anything that came to me from the sale would go back to them to help buy. Whether I am buying a share, or the trust is, I don't know but thats why I mentioned I would have liked to have been more involved at the time the will/trust was setup to have understood it better.

For now, its a none issue for us as there is no desire to move.

 

[SpokeyDokey]

Free Wills or even DIY Wills are OK for very small estates.

Property, investments, trusts etc need expert wording & advice. Worth the financial outlay.

Currently getting an updated Will done but awaiting advice on Mutuall Wills etc and, of course, what happens with IHT tomorrow.

 

[Regular.Cyclist]

I got a free will drawn up by a local firm of solicitors many years ago. I gu they were hoping to catch you early so that you would be more likely to to partake of their paid services later in life.

 

[PaulSB]

Are free wills offered by many charities any good ? - or is there a sting in the tail ?

I only have simple affairs no overseas properties or business interests?

Any pitfalls to look out for ?

Our affairs are very simple as well. We did though need to set up a family trust to protect the interests of one son. He is in long-term care and can't take responsibility for his own finances.

We also needed to change our house ownership from joint to tenants in common.

This is very simple stuff but my feeling is once one enters these areas a good solicitor is essential. It took me 25 years to find a solicitor I felt understood our needs - I wasn't looking every day for that time!!!

Be aware the companies that make presentations on behalf of charities will be looking to follow up and talk to anyone in the audience that they can. I've seen it happen.

 

[Psamathe]

When parent 2 goes, only 70% of the property value is in the estate for IHT purposes (or available for care home fees clawback).

Out of interest (but not applicable to myself), presumably if half the home was left in trust to children then when it comes to the surviving parent needing to qualify for state aid the house value used for means tests would be half the full market value (as they only "own" half)? Or would that the surviving parent could live in the house in effect count as an "income".

I know of one situation some years back where both parents put their house in some trust for their children with them having the right to reside there. Then a Mr G Brown made restrospective tax rules changes and they had to declare the market rent value of the property as "income" on their personal tax returns (ie taxed as income). In the end they wound-up the trust as they were paying too much being taxed on ther market rental value.

Or maybe this illustrates what others have said in that apparently simple situations can easily get complex.

Ian

 

[dicko]

Your will, drawn up by a solicitor, isn’t expensive. We were glad we used one when we had ours drawn up last. They pointed out many things we were unaware of and we had it done the way we wanted it to be done and unchangeable. Money well spent.

 

[simongt]

We used an established will writing service based locally. Through circumstances, we've altered our wills a couple of times without any problems.
Just a wee point, as we've no-one in the family who is young enough to be around, or we don't trust to act responsibly when we've both gone; something to bear in mind, we've appointed a charity as executor. Also that way, less of our estate gets into solicitor's grubby hands.

 

[PaulSB]

Out of interest (but not applicable to myself), presumably if half the home was left in trust to children then when it comes to the surviving parent needing to qualify for state aid the house value used for means tests would be half the full market value (as they only "own" half)? Or would that the surviving parent could live in the house in effect count as an "income".

I know of one situation some years back where both parents put their house in some trust for their children with them having the right to reside there. Then a Mr G Brown made restrospective tax rules changes and they had to declare the market rent value of the property as "income" on their personal tax returns (ie taxed as income). In the end they wound-up the trust as they were paying too much being taxed on ther market rental value.

Or maybe this illustrates what others have said in that apparently simple situations can easily get complex.

Ian

I'm not sure about the "income" question.

We have three sons. Our wills are designed to ensure two of our sons have access to our estate while the third can only benefit indirectly. This is because our middle son is in long-term care. If he has assets in excess of £16,000 he loses his state benefits. By putting our estate into trust our son doesn't have any assets but our other two sons can use the money for his benefit. A holiday perhaps. This is what we have done.

A family trust has been set up with two sons as both trustees and beneficiaries, the third son is a beneficiary only. This trust is accompanied by a Letter of Wishes detailing how we wish our third son to receive money from the trust. The other two can, as trustees, agree to take money for themselves. As a part of this process we changed our house ownership from joint to "tenants in common." This means we own half each as opposed to jointly owning the property. On first death the family trust becomes active and the 50% of the property owned by the deceased goes into the trust.

The survivor only owns 50% of the property. This means there cannot be a forced sale of the property to cover care costs etc. It also reduces the value of the survivors assets for the purposes of financial assessments, means testing etc.

On second death the remaining 50% of the house goes into the trust along with the rest of our estate.

 

[T4tomo]

I'm not sure about the "income" question.

I think tax on "imputed income" went out in about 1965. Gordon Brown rammed the final nails into Miras (which its self replaced a scheme to offset the imputed income) but not retrospectively so. I don't think the recollections of @Psamathe are fully accurate, but then its second hand info anyway. The caveat, especially with Trusts, is to seek your own legal advice.

 

[PaulSB]

I think tax on "imputed income" went out in about 1965. Gordon Brown rammed the final nails into Miras (which its self replaced a scheme to offset the imputed income) but not retrospectively so. I don't think the recollections of @Psamathe are fully accurate, but then its second hand info anyway. The caveat, especially with Trusts, is to seek your own legal advice.

I couldn't agree more. It took decades to find a solicitor who understood our simple needs. When I explained the situation they all said to the effect "we can check that for you." In other words they didn't know.

The solicitor we chose was brilliant. She understood why we were there before we arrived. Her opening presentation answered all our questions before we could ask them. I remember listening and thinking halfway through the cost doesn't matter, this person gets it.

This was our son's long-term security in care which was under discussion. Confidence was the issue, not cash.