INHERITANCE

[mybutty]

i have a few houses that i rent out. they are all on buy to let mortgages. can they be left to my children in a will? thanks for any replys

[ummmm]

Have you got life insurance on them?

[factor-fiction]

I can't think of any reasons why not. Has someone said something that makes you think you may not be able to do it?

[woofgang]

The percentages of the house that you own can but depending on the mortgage company they may require the houses to be sold and the mortgages repaid. I know this is true because that was what happened to a friend of mine last year.

[factor-fiction]

Of course depending on the mortgages and the value of the properties there may be nothing to leave as the houses belong to the mortgage company unless you have the relevant life policies

[mybutty]

no. i have'nt got life insurance on them. i did'nt think that you could leave a house that is not paid for. in a will. so how does this work i have three children.

[ummmm]

You take out life insurance so the mortgages get paid off if/when you die.

[mybutty]

how much would this cost and where do i go to get one

[ummmm]

It depends how much is outstanding on your mortgages. Go to one of the comparison sites 'gocompare.com' or 'comparethemarket.com'

[cathfromsaron]

at present you only own the equity, and this can be left to whomever you want! but like they say, life insurance should make up any shortfall!

[mybutty]

thanks everyone for your input

[d9f1c7]

Yes. You leave the value of your estate at the time.

[tonywiltshire]

Obviously you can only leave what you own often a property has been disposed of that is named in the will so it has no effect. If you intend to leave your estate to your three children this is no problem but make it clear how you wish it to be done, make sure there are two witnesses to your signature who are not beneficiaries in your will,
It will not matter if they predecease you, but what happens if any of your children predecease you?
As has been said you may wish to consider life assurance.
It will probably be a good idea to name the beneficiaries as executors, but make sure they are aware of the location of the will and get their agreement to be executors, do make your will clear, if in any doubt get a solicitor to draft your will. A judge in the high court once said about a DIY will “the testator filled in the will form and signed it no doubt thinking he had done a good job, he had for the legal profession”.

[ladybirder]

You don't HAVE to take out life insurance if you don't want to. It just means if you do, then the houses will have 100% equity in them and if you don't, then your estate will just have the equity percentage that you own. Haven't put that very well but I hope you get what I mean.

[McMouse]

If your will states that your children should inherit then providing your estate is in funds or has assets then they will be OK. If there are charges such as mortgages on any assets then the estate will settle them first.

[Im a BusyBee]

depending on the size of estate there will undoubtedly be taxes to be paid and unless there is enough cash or other assets to cash in to cover this it may mean the house(s) have to be sold to raise enough cash. Or put another way if you leave a property to each of your children then how will the tax get paid? The answer to that can be via other things in the estate but if you then detail that you will leave, say, each of your grandchildren 10k (as you have that much equity in other things once cashed in), will they actually get their cash once taxes are settled? It can and does get extremely complicated. Often the easist and fairest way is to sell everything and leave %'s of the 'pot' (after tax)to named people.
With regard to life insurance this could be a reducing payout upon death as the amount you owe on your mortgage decreases each year.