Question on wills – please take care!

[Tender Face]

Please take care – not everyone may wish to consider this at this time, but it’s the type of issue many are faced with (or something similar) when looking at funding care for relatives ......

A friend (I have yet to persuade to post on TP) has come across a situation which I suspect needs independent and individual legal help – and I know no-one here is qualified to advise – but this is a ‘new one’ on me ... and I can’t recall this ‘scenario’ being raised on TP before so thought it might help others too to share any responses .... (apart from me feeding back) .....

Can someone make a will which stipulates that their main (or other) property cannot be used for any other purpose other than to be bequeathed to their beneficiaries after their death ? If the will was drawn up say 15 or 20 years ago – with or without any thought of having to realise their asset to pay for care – could their wishes be fulfilled? Or does the ‘Law of the Land’ over-ride if they later in life need to fund their care outside their own home?

Would the property (ies) HAVE to be sold against that person’s wishes?

Is there a difference in wills drawn up before a certain time? (Else we might all run out to protect our children’s inheritances and damned where we might languish if necessary?) Not so much a matter of inheritance – but if someone has been quite explicit about matters of property – how does an executor subsequently deal with an estate when that property has long since gone? - or how does an attorney deal with affairs knowing stipulations in someone’s will (not yet deceased) will never be realised?

Sorry, not nice thoughts – but very important in terms of honouring people’s wishes and managing ‘funding’ in the 'here and now'.

Thanks, Karen, x

 

[jenniferpa]

Not an expert either Karen BUT: my understanding is that a will is meaningless until after someones death. I mean to say, I can leave my car to my son, but if I've sold my car before I die to you, there is no way that car can be recovered.

It's possible that some form of trust might do the job, but a will? It can only dispose of property that is owned by the testator at their death.

 

[lin1]

Hi

I think it would be best to get legal advise on this,

my personal opinion which is based on no knowledge whatsoever,
is that the property can be taken into account for funding care, but I may be wrong

 

[FifiMo]

Very interesting question. I'd be interested in hearing what a legal interpretation might be - my initial thoughts were along the lines of property being part of an individual's estate and by saying it can only be bequeathed to a relative, say, would that be to the detriment of any creditors (of which the LA may be one). What if circumstances had changed? What if the property had outstanding mortgage or had been re-mortgaged or they had taken the equity out of the property? How would any debts be paid off if the assets had been ring-fenced for example? Would such a provision be seen as a licence to run up debts knowing that your estate would not cover them?

My second question would be - why didn't they just transfer title at the time and have a life-long tenancy agreement? Or hold the property in trust? If those were options available to them yet they still proceeded with the stipulation then it would appear that someone (assuming it was written by a lawyer) considered that the property would be untouchable if there were any other debts outstanding at the time of death wouldn't it? Perhaps the person at the time had plenty of liquid assets and never considered that they would be depleted (perhaps) through a prolonged period in care?

Like you say - it opens up a whole topic in itself and that's before you get into the rights and wrongs of paying for care and seeing everything you've worked for disappear and having nothing more than (potentially) £22K to bequeath to anyone !

Fiona

 

[sue38]

Hi Karen,

Jennifer's right. A will speaks from date of death, before that it has no legal significance.

A trust however can remove property from someone's estate immediately, but you have to tread carefully around the deprivation of assets legislation.

 

[JackMac]

I don't know the answers to your questions but I would get them to at least have a good look at the will that was made that long ago. I made my Will 4 years ago and can't remember everything I put in it.
However, my parents made theirs about 20 years ago and a few weeks ago Dad got it out and had a look. He got the shock of his life. The bank were executors (meaning they can actually lock the doors on the house when they die until the estate is settled) and they were going to be very well off too. It had been so long ago, he had not remembered (and maybe did not understand at the time) that the bank had full control and would probably end up with 4% of his money!
Needless to say a new Will is now in its place!
All I'm saying is you don't always remember the details of something you did that long ago and since the laws can change so much, its worth them getting some advice and maybe doing a new Will.

 

[Clive]

A Will only takes effect once you have died. The executor has to try and fulfil the terms of the will from the assets that are left when you die. The more complicated the will, the more likely you will not get the results from it you expect, and a large cut will go to the solicitors (or bank if it is an executor) for sorting out the concerns.

Giving your house to a beneficiary of your Will is a bit like giving your favourite diamond necklace. If it has previously been stolen (illegally by a burglar or legally by the state) there will be nothing for that person.

The best way of leaving your estate is to ask the executor to sell everything and give a fixed percentage to each beneficiary. That way there can be no argument.


Clive

PS

You remind me of the person who wrote in his will that he forgave the son who had not repaid a very large loan that had been made many years before to start a business for the son.

The result was that the Tax Man added the long forgotten loan back to the person’s estate and charged Inheritance Tax on it. This then meant there was less left to share between the beneficiaries as the loan was never repaid... but the tax had to be paid.

 

[Nebiroth]

It would have no effect because:

1) A Will has no effect whatever until after the person has actually died

2) Estates can only be distributed as stated in the Will by the Executor only after all debts owed by the deceased person are settled. Thus, if the Will states that £10,000 is to be bequeathed to someone, but the deceased person had debts of such magnitude that their estate was worth less than that after the debts were paid, then only what was available after said payment could be bequeathed.

There is also an order of priority in which debts must be settled, basically you pay such debts in order until they are all done or the estate runs out of assets - and debts owed to the state (such as, the tax office) take priority over all else.


I believe that assets you place into trusts can have conditions placed upon them whilst you are alive, but a Will has no relevence until you actually die.

It is basically a statement of your wishes, that are carried out by the executor.

 

[Tender Face]

Thanks everyone. Will pass the comments on.

Very thought provoking (not that I have many diamond necklaces to worry about but that’s a great example) .... In fact, by being so specific and trying to ensure one or more beneficiaries ‘inherit’ certain assets, quite the reverse can apply? How sad the poor souls thinking they were doing their best by their loved ones - with no thought their assets might be needed in their own lifetime to support themselves - have actually not? Perhaps one of those very rare occasions, their dementia may be a blessing, in that they would not comprehend?

Oh dear.

Karen

 

[jenniferpa]

Interestingly, the diamond necklace example might actually be one of those exceptions when it came to paying for care. That comes under the category of chattels and you can't be forced to sell them according to CRAG. Assuming it wasn't purchased the day before entering care and then handed over to a child, this is something that can be gifted while the person is still alive and doesn't come under deprivation of assets. Everything that comes under this category (things like art, antiques, jewelry even cars) can't be seized as it were, provided, as I say, it wasn't purchased with a view to taking the money out of the pot.

 

[FifiMo]

Sadly, from reading some of the comments, the lesson for everyone seems to be to give whilst you're alive and don't rely on your last will and testament to deliver your wishes for you.

Property can be transferred, say, to your children with life long tenancy agreements and such things, or put in Trust etc. Whilst these options do exist you have to do them far enough in advance for them not to be considered as Deprivation of Assets.

As for diamond necklaces, my personal view would be that if i owned such a thing, then i'd like to see the person's face when they receive the gift so i'd probably dispense with it when I was alive.

As someone already said, the only ones to benefit from all of this are lawyers and banks and other professional bodies.

Being an Aberdonian, I dislike the idea of people making money at my expense. Afterall, copper wire was invented by two Aberdonians fighting over a penny.

Fiona

 

[Izzy]

Being an Aberdonian, I dislike the idea of people making money at my expense. Afterall, copper wire was invented by two Aberdonians fighting over a penny.

Fiona

Sorry - a bit off the point but I didn't know you were an Aberdonian Fiona! We lived there for 10 years and I was a headteacher there (Springhill Primary) for 15 years and an Assistant Head at another school for 3 years (Middlefield Primary) before that. I loved and still do love Aberdeen!

Apologies for the off thread hijack!

 

[Clive]

To have any chance at all of pulling off Fiona’s suggestion of transferring the house to the children with a life long tenancy agreement you would need to pay the going rate in rent to your children every month (from your remaining savings or pension). The children would then have to pay income tax on their income from renting the house to you.


As Fiona said the only way of guaranteeing where your earnings go is to give or spend as you get it.


I had a bachelor friend who thought he knew how to fairly distribute his estate. In his Will he listed his 13 favourite people and left each one a percentage of the residue of his estate, which should have been quite a reasonable sum. He also left a fixed amount to each of his favourite charities and asked his executors to arrange a substantial celebration for after the funeral service.

Unfortunately the gentleman had no family to look after him, and consequently spent some time in a Nursing Home where he was self funding.

The result was that when he died almost all his fortune had been eaten up with the NH bills and once the charities had received their fixed amounts and the celebration of death and scattering of the ashes had been taken care off, there was very little left to share out as he had intended.

All very sad… but he was given a good send off.

Clive