Inheritance rules

[snodhutch]

If my husband dies without making a will leaving me his wife and 3 children and one child from a previous marriage how will his estate be divided

[raysparx1]

Have a look at this link, might help you, make him do a will, makes things so much easier.


http://www.which.co.uk/reports_and_campaigns/m oney/reports/tax/family/Inheritance%20tax/Inhe ritance_tax_report_657_79327_8.jsp

[raysparx1]

Sorry you got to sign up to look at that one try this, might be better


http://news.bbc.co.uk/1/hi/business/4032019.st m

[Ethel]

Do you own your own home? If so, on what basis - joint tenancy, tenancy in common
If it is joint tenancy it is not counted towards his estate on his death, it automatically passes to you entirely.
If it is a tenancy in common, then his half is taken into account.


As his wife you get everything up to �125k plus his personal possessions.

Anything over �125k is split in half - half to be shared equally between all children, the other half held in trust during your lifetime. You get the interest and on your death the children get it.

So you can see how the house is owned is important.

[raysparx1]

Blimey Ethel, you got all that in your head ? you are excellent :-0)

[snodhutch]

Thanks Ethel. We do own our own home but how do i find out if its joint tenancy or tenancy in common

[raysparx1]

If you bought the house together and you had a joint mortgage then you are most probably joint tenants,ask your solicitor, i think tenants in common is normally for people buying as a joint venture, ie, friends or business partners, if that is wrong I am sure Ethel will correct me, she is real good.

[Ethel]

Ray is quite right. It is usual for couples to own their homes as joint tenants, assuming you are both named on the title of the property (not in one person's name only).

It sounds convoluted but I will try to explain it. As joint tenants you do not each own a half share of the house. Effectively it is held in trust and the whole is owned by Joe Bloggs and Jane Bloggs as if Joe and Jane were a single unit. It is not possible for either Joe or Jane to sell one half, or leave a half share in a will to a third person.

Assume Joe has died. His name is now removed from the Joe and Jane Bloggs unit and Jane Bloggs continues to own the whole.

This means that the house cannot count as part of the �125,000 threshold.

With inheritance tax becoming an increasingly common threat more couples are severing their joint tenancy and owning their own homes as tenants in common. When Joe Bloggs dies, he leaves his half of the property to a third party (the children perhaps) and gives Jane a life interest so she can continue to live in the house. This has effectively disposed of half of the value of the house.

So when Jane dies, hopefully her half will still be under the inheritance tax threshold, and the children can inherit tax free.
It's explained much better here:
http://www.avoidinginheritancetax.com/avoiding _inheritance_tax.htm

And you didn't even ask about it. I'll shut up now. :)