Mr and Mrs E were on second marriages and Mrs E. had a grown up daughter with two minor grandchildren. Mr E had no children and was happy to leave his estate to his wife’s children and grandchildren. Amongst their £1m estate was a property that was in the sole name of Mrs E, having been owned by her prior to their marriage. They approached me asking for their wills to be re-written as they wished to change one of the executors and Mrs E. wanted to make a specific gift of her jewellery to her granddaughter.
I also suggested the following important changes:
Should Mrs E die first we placed the property into a Right of Residence Trust which would allow Mr E. to stay living there after her death, but pass ownership on to her daughter and two grandchildren on his death. This protected the inheritance of the property by Mrs E.’s bloodline relatives.
We changed the age that the grandchildren were to inherit the property as if they inherited after age 18, the share of the property going to the children would not benefit from the couples’ Residence Nil Rate Band. By changing the age of inheritance the full £140,000 inheritance tax could potentially be saved (i.e. 40% x (2 x £175,000).