Following on from Alan Salter’s 10 minutes last week, he just wanted to share the other 2 scenarios that he shared with us in the meeting.
A middle aged couple Terry & Kerry aged 52 and 49. Both are employed – Terry is a sales manager and Kerry works as a dinner lady at the local school. They have children, Steve (20) & Eve (19) both at university. They are homeowners with £275k home, small mortgage and £50k savings.
Terry & Kerry both believed that ‘a will is a will’ and also put Basic Wills in place leaving everything to the survivor on first death, then to the children on second death.
Terry suffered a heart attack one day whilst playing squash and died. 3 years later Kerry remarried. Subsequently, Kerry died before her new husband. Kerry died without a Will and her estate passed to the new husband through the Laws of Intestacy. The new husband didn’t get on with his stepchildren, he was the proverbial wicked stepfather, and excluded them from his own will.
He actually left everything to his own children from his first marriage which resulted In Steve & Eve inheriting nothing! ANOTHER EXAMPLE OF NOT HAVING THE RIGHT ARRANGEMENTS IN PLACE! IT COULD ALL HAVE BEEN AVOIDED
Mature retired couple – Peter & Rita aged 66 and 67. Both worked their entire lives at a local factory. They have 2 adult children – John and Jennifer and 2 grandchildren. They own a £175k house, mortgage free but only £5k savings.
Basic Wills were put in place and the decision was made to put the home in the name of their sons. The home was registered in the name of their sons at HM Land Registry. Their intention was that if they were to need care in later life, that the Local Authorities could not force them to sell the family home to pay for their care as it was no longer theirs.
Their sons now had to make Wills giving their parents the right to live in the property for as long as they could, should the sons die before them. Not long after, Rita passed away and a few years later Peter did go into a local residential care home.
The two sons, had by now sold the property and split the proceeds 50:50 believing they had effectively received their ‘inheritance’ early, fair and square! Unfortunately, their father’s care didn’t come for free – his pension didn’t nearly cover the cost of his care and his savings soon ran out.
The Local Authorities were able to recover the cost of his ongoing care from the sons through the Deliberate Deprivation rules. Disaster struck! This caused financial problems for both John and Ron as they had both treated themselves to holidays and new cars from what they believed was rightfully their inheritance.
The cars and other assets had to be sold at a much lesser value than they were purchased for and both were left with huge debts.
ANOTHER SAD EXAMPLE OF NOT HAVING THE RIGHTS ARRANGEMENTS IN PLACE… ALL COULD HAVE BEEN AVOIDED.
These problems can be addressed very easily with the correct estate planning.
Not a case of IT WONT HAPPEN TO ME – more a case of WHAT IF it happens to me?
If you have any questions you can contact Alan direct on 07974 098696 or email him on firstname.lastname@example.org