How to pass assets to current wife and children from previous marriage

[genou]

Note that because of the amounts involved, - i.e. the property currently being worth a lot more than my liquid assets/investments and the uncertainty of how those values will change in the future,

Is there any mileage in suggesting that you downsize now, and give yourself more flexibility?

[Chrysalis]

I might have suggested this before, but what about making your children partial owners of the property now (via tenants in common), with a less than 50% ownership, and your wife owns/inherits the majority? Then they can’t dictate when she moves but will still get their share.
But I agree with Clitheroekid that it would be best to find a solution that does not involve a trust.

I also agree with your suggestion not to include a professional executor but to leave it to the executors to appoint legal support.

[richfool]

I might have suggested this before, but what about making your children partial owners of the property now (via tenants in common), with a less than 50% ownership, and your wife owns/inherits the majority? Then they can’t dictate when she moves but will still get their share.
But I agree with Clitheroekid that it would be best to find a solution that does not involve a trust.

I also agree with your suggestion not to include a professional executor but to leave it to the executors to appoint legal support.

Re your first point above, - you didn't quite suggest it before, though I suggested something similar and then you responded to that (see next quotes):

What if I transfer the ownership of the property into joint names with my wife (now), but hold it as "tenants in common", split say 60/40 (60% held by me and 40% held by my wife. Then in my Will bequeath my 60% share to my adult children (split between them 50/50). Then upon passing my wife continues to hold her 40% share and is able to continue to live in the property, and my children inherit the 60% share between them. It would then be up to them to sell as and when my wife and children agreed to do so. The only potential hiccough I could envisage would be if children wanted to sell straight away and my wife didn't.

In response to which, Genou replied:

This works, sort of. It means your children will be exposed to CGT on any eventual sale. I think it exposes them to additional stamp duty should they move their own residence while the house is still owned, which won't bother the non-UK one, but may be a deal breaker for the other. As you say, if one of your children goes rogue, bust or has a bad divorce settlement, your wife can lose the house as a place to live even if she gets to keep her share of its value.

And you replied:

It also gives your wife no security over her home, which will be majority owned by your children, who could force a sale. How well does she get on with them?
On the other hand, it does give a clear and simple solution, which gives it quite some merit. An even simpler solution would be to abandon entirely the idea that your wife will stay on in the house after your death.
Or, would it be possible to downsize to a property you could leave entirely to your wife, and gift or bequeath the children th3 rest, or the majority of, the other assets? Or rejig the inheritance so your wife gets the house and the children the other assets?

So I was rather put off that route by the implications mentioned.

At the moment it seems that the best solution would be to make my wife, perhaps along with my daughter (if she shows enough interest!) joint executors; make my requirements clear in my Will, and then rely on them to see those requirements through and appoint solicitors as and where they need assistance, such as for probate, in connection with the sale (whenever) and perhaps to distribute net proceeds.

[Clitheroekid]

Those factors were: that I do very much want to provide for my wife which includes wanting to provide her with somewhere to (continue to) live, and I don't want her to be in a position where she might come under pressure from my adult children to move out of her home, sell up and go. Though note, that said, currently, she thinks she will want to (sell up) and go back to her home country, but I don't want to put her under pressure or force her to do that. I think she will want to, but I don't want to box her into a corner, as she may change her mind or at least she may wish or need to stay on a couple more years to wind things up before making that step (returning to her home country to live/retire).

Thus re your assertion that "the best strategy by far is to divide everything at the time of your death", becomes a question/problem of how do I split the estate which includes the property that my wife is living in at that time, without pushing her out or putting her under pressure to leave (even though she may well want to leave)?

Note that because of the amounts involved, - i.e. the property currently being worth a lot more than my liquid assets/investments and the uncertainty of how those values will change in the future, it makes bequeathing the property to my wife and my liquid assets to my children, or vice versa, an unknown or potentially uneven split. If I passed the property in its entirety to my wife, she would get much more than my (2) children and she would have no liquid funds/minimal income to help support her. Conversely, if I pass the property to my 2 children and my liquid assets to my wife, - then, firstly I couldn't be sure how much of those liquid assets would be left at that future point in time, and secondly, that would require my wife to vacate the property and return home without any discretion or flexibility, in order for my children to sell the property and get their hands on the "cash". Noted as mentioned above, that my wife may well wish to leave the UK and return to her home country to live, and thus that strategy could fit well.

Thanks for explaining the position - I hadn't realised that there was such an imbalance between the value of the house and the value of your liquid assets.

As I asked in my last post, have you actually discussed it with your wife? Your focus seems to be on enabling her to carry on living in the house, but there's no point in doing so if she's really not bothered one way or t'other. Many widows that I've dealt with are only too happy to sell what was the family home and downsize, not just for financial reasons, but also because they don't want to rattle around by themselves in a large house full of memories of happier times.

So subject to anything your wife might say I think it's inherently unlikely that she would want to remain living in the house indefinitely. The most likely outcome is that she will indeed go back to her home country.

But if you insist on an arrangement that will allow her to live in the house indefinitely then I'm afraid it's almost inevitable that it will create friction between her and your children. Even if they get on OK now there's no reason why they should particularly want to help her after your death, as there's no blood relationship and there may even be some lingering resentment about you having taken a second, much younger wife. I obviously know nothing about the background story, but I have come across many similar situations, and, sad to say, that's the default position.

Consequently, whatever the legal arrangement your children will almost certainly want her gone ASAP, and she's bound to be aware of that and feel pressure to comply.

In any case, if you do a simple date of death split it doesn't mean that in practice she'd have to move immediately after your death. Your children will no doubt be so relieved that you haven't set up a life interest that they will probably be more than happy to leave things as they are until your wife's ready to move out. However, if you're really bothered about it you could always provide that the house shouldn't be sold without her consent for a reasonable period, say a year.

But as I said before, there's a great deal to be said for a simple, immediate arrangement which avoids all the uncertainty and worry of who gets what and when, and the potential family disputes that can arise out of such a situation.

[richfool]

May I come back to the subject of my Will again.

I've been having a look through my existing Will (which makes the solicitors the Executors and Trustees).

The way it is written, it makes my wife the beneficiary and it gives the property and contents "(free of tax) to my Trustees ON TRUST for sale ( with the full power to postpone the sale without being liable for loss)."

It goes on to say (amongst various other provisos): "My Trustees shall allow the Beneficiary to reside in my house and to have the use of the contents so long as the Beneficiary may wish and shall not exercise the trust for sale except with the Beneficiary's written consent (but without prejudice to the provisions of (f) below...". It then lists various options and conditions, including options to sell and buy another property.

Further on it refers to: "IF at any time the Beneficiary ceases to reside in the Dwelling" ..... or (my quick summary) remarries, fails to maintain the property adequately ...blah, blah, etc etc.... "then the Beneficiary's rights under this clause shall end and my Trustees shall treat any property held under it as an immediate accretion to my residuary estate". It then covers various other scenarios before coming back to the residue of my estate, saying that the "I give the residue of my estate" (after various expenses detailed) "to my Trustees ON TRUST to sell call in and convert into money such parts as do not consist of money but with full power to postpone doing so for so long as they see fit without being liable for loss" (and such estate and property and the property which currently represents it is referred to in this Will as "the Trust Fund")".

"My Trustees shall hold the Trust Fund on TRUST to divide it or treat it as being divided into ten parts of equal value and to hold them subject to the following provisions" It then goes on to indicate how those ten parts are to be distributed, which includes my wife and my 2 adult children.

There is then a lot of various "what ifs" and "buts" and other information.

So the way I read all that is that, the solicitors would be the Exors and Trustees, my wife the Beneficiary, and the trust provides distributions to all three upon sale of the property. So that all seems fine. Though to me, a layman, it didn't seem to clearly say that I wanted my more liquid assets distributing upon death (after probate), though when I questioned my solicitor about that, he said the Will was fine, that that wasn't a problem and that they also have their notes and my emails to give the trustees guidance/direction regarding my intentions.

Bearing in mind I do want my wife to be able to stay on living in the property as long as she wants to, and for her not to be pressurised by my children to sell up. As previously discussed on this thread, I also want to try and avoid the solicitors as Trustees eroding the value of my estate through their ongoing fees (at hourly rates.). Additionally, regarding the choice of Exors, one my offspring lives on the other side of the world and the other who lives in this country, can't be bothered to engage with me on the subject! So I am stuck in terms of who I can use as Executors.

Thus I am wondering whether it would be feasible, and indeed whether there would be any point or advantage in making my wife the sole Executor AND the Trustee, so that she holds the property in trust in accordance with the Will, for the ultimate benefit of herself and my 2 adult children. That way she would have control and all their interests/inheritances would still be provided for. She could then instruct solicitors to do the parts that she can't do or doesn't understand. At least that way she would have control of the process and would not have to worry about solicitors writing to ask if the property was properly insured, being maintained etc etc., and then receiving a bill from them for their time spent doing so!

Or a variation on that, - what about making the solicitors the Executors and my wife the Trustee of the property? That way the solicitors would do the legal work that my wife is likely to be unable to do (e.g. probate and the transfer of the property into her name as Trustee) and my wife would then become the Trustee and be left to make her decisions about the property, subject to the conditions of the trust/my Will, (and) whilst being protected from pressures to sell.

Or even, .... to pass the property directly to my wife, with no trust, but with a charge being placed upon it that upon its eventual sale (whenever) that my two children each receive a given percentage of the proceeds.

I hope that is not too long or indigestible, and that I have made my reasoning, points and questions clear enough.

Thanks for any relevant input.

[scrumpyjack]

Personally I would never ever have a solicitor as executor unless there is absolutely no one else suitable.
My sister had awful problems when her husband died and a solicitor who they thought was a friend was executor. His financial interest definitely was his priority.

[AF62]

Is this an appropriate way to deal with one's estate when you want to provide for your new (younger) wife and also leave an inheritance to each of your adult children from a previous marriage?

The answer is - don't do this - https://www.thetimes.co.uk/edition/mone ... -bqwrmcp39 sorry paywall, but in summary -

Divorced man with four adult children from his first marriage marries second wife with two adult children from her first marriage.

The new couple make mirror wills leaving everything to each other or equally to all six of their children if the other has already died.

The man then dies and everything passes to the new wife.

New wife then makes a new will leaving everything to her two children so her deceased husband's four children get nothing when she died.

Legal opinion seemed to be that the four children could throw money away challenging the new will but their chance of success was minimal.

A spokesperson for the deceased second wife's family said “It is hardly controversial that a mother should leave her assets to her own dear children”

[swill453]

The new couple make mirror wills leaving everything to each other or equally to all six of their children if the other has already died.

Well that was plainly stupid. The question in the OP is how to write a will such that it isn't the above, which is necessarily more complicated.

Scott.

[AF62]

The new couple make mirror wills leaving everything to each other or equally to all six of their children if the other has already died.

Well that was plainly stupid.

It was, which was why I said "don't do this" as this will happen!

[Chrysalis]

Personally I would never ever have a solicitor as executor unless there is absolutely no one else suitable.
My sister had awful problems when her husband died and a solicitor who they thought was a friend was executor. His financial interest definitely was his priority.

. I agree.

I thought we had already had an extensive discussion on this point, and the unanimous recommendation was not to appoint professional executors. This seems to be the one straightforward action you need to do with the Will! If you have professional executors you will end up not only with a large bill but also a permanent loss of control over the execution of the estate - the beneficiaries can’t sack the executors or trustees no matter how unsatisfactory the service. If you appoint lay executors they can of course delegate as much of the work as they choose, but they remain in control.

IANAL but my understanding is that it is usual for the execution of a Will to create a Will trust, which essentially is the way of enabling the executors to handle the assets on behalf of the estate. So even wills that don’t try to do anything complicated or create ongoing Trusts will talk about the Trustees (meaning the Executors) and what they may or may not do. Usually the Will Trust will end when the assets are distributed and the executors work is over. If there are continuing trusts, then the executors can retire and appoint new Trustees (but this can’t happen if you have professional Executors, you are lumbered with them) . That may be a very simplistic lay person interpretation so I hope Clitheroekid or some other qualified person will correct any misunderstanding on my part.

[richfool]

Personally I would never ever have a solicitor as executor unless there is absolutely no one else suitable.
My sister had awful problems when her husband died and a solicitor who they thought was a friend was executor. His financial interest definitely was his priority.

. I agree.

I thought we had already had an extensive discussion on this point, and the unanimous recommendation was not to appoint professional executors. This seems to be the one straightforward action you need to do with the Will! If you have professional executors you will end up not only with a large bill but also a permanent loss of control over the execution of the estate - the beneficiaries can’t sack the executors or trustees no matter how unsatisfactory the service. If you appoint lay executors they can of course delegate as much of the work as they choose, but they remain in control.

IANAL but my understanding is that it is usual for the execution of a Will to create a Will trust, which essentially is the way of enabling the executors to handle the assets on behalf of the estate. So even wills that don’t try to do anything complicated or create ongoing Trusts will talk about the Trustees (meaning the Executors) and what they may or may not do. Usually the Will Trust will end when the assets are distributed and the executors work is over. If there are continuing trusts, then the executors can retire and appoint new Trustees (but this can’t happen if you have professional Executors, you are lumbered with them) . That may be a very simplistic lay person interpretation so I hope Clitheroekid or some other qualified person will correct any misunderstanding on my part.

Re your your comments above particularly those I have bolded, - Yes, we have had an extensive discussion about avoiding appointing professional executors. The above isn't in contention. So yes, I am striving to avoid using solicitors as Trustees and Executors. The first part of my recent post was identifying how the Will is worded currently. (and it did refer to a Lifetime trust). I then went on to say what I was trying to do to avoid solicitors being appointed as Executors/Trustees, and suggesting ways I might achieve that, whilst still achieving my objectives regarding the distribution of assets etc.. As I said here:

Bearing in mind I do want my wife to be able to stay on living in the property as long as she wants to, and for her not to be pressurised by my children to sell up. As previously discussed on this thread, I also want to try and avoid the solicitors as Trustees eroding the value of my estate through their ongoing fees (at hourly rates.). Additionally, regarding the choice of Exors, one my offspring lives on the other side of the world and the other who lives in this country, can't be bothered to engage with me on the subject! So I am stuck in terms of who I can use as Executors.

Thus I am wondering whether it would be feasible, and indeed whether there would be any point or advantage in making my wife the sole Executor AND the Trustee, so that she holds the property in trust in accordance with the Will, for the ultimate benefit of herself and my 2 adult children. That way she would have control and all their interests/inheritances would still be provided for. She could then instruct solicitors to do the parts that she can't do or doesn't understand. At least that way she would have control of the process and would not have to worry about solicitors writing to ask if the property was properly insured, being maintained etc etc., and then receiving a bill from them for their time spent doing so! Call that OPTION ONE.

Or a variation on that, - what about making the solicitors the Executors ** and my wife the Trustee of the property? That way the solicitors would do the legal work that my wife is likely to be unable to do (e.g. probate and the transfer of the property into her name as Trustee) and my wife would then become the Trustee and be left to make her decisions about the property, subject to the conditions of the trust/my Will, (and) whilst being protected from pressures to sell. CALL THAT OPTION TWO.
**Accepted Scrumpyjack says I should even avoid making the solicitors executors, so the only option remaining, as I see it, would be to make my NOT financially astute wife the executor (and trustee if that evolves from being the Executor) and tell her to go off to solicitors to instruct them to do the parts that she can't do, but to leave the bones of the wording of the Will as it is currently. So That IS in effect OPTION ONE (again).

[b]Or even, .... to pass the property directly to my wife, with no trust, but with a charge being placed upon it that upon its eventual sale (whenever) that my two children each receive a given percentage of the proceeds[/b]. CALL THAT OPTION THREE

Once I've progressed this as far as I can here, - and I thank all very much for your input, - I will have to speak to my solicitor to agree how I will change my Will to bring about the desired end result and achieve my objectives, (even though he may resist his firm being removed from the role of Executors and Trustees).

[Chrysalis]

I would imagine your solicitors will be full of dire warnings about why you shouldn’t de-appoint them!

I thought your previous post seemed to be still considering professional executors and/or Trustees, apologies if that wasn’t the case.

Another possibility is to ask a trusted friend to be your executor, perhaps along with your wife. It is of course a big ask, for which it would be appropriate imo to include a bequest in the Will in thanks, but it might be worth considering. My executors are friends, as it happens (in the event that my spouse and I die together, otherwise we are each other’s executors), because I have no family members I would be happy to ask. (Although, I am young enough to anticipate they will not actually have to carry out this duty, we intend to replace them with our children once they are old enough).

[richfool]

Personally I would never ever have a solicitor as executor unless there is absolutely no one else suitable.
My sister had awful problems when her husband died and a solicitor who they thought was a friend was executor. His financial interest definitely was his priority.

. I agree.

I thought we had already had an extensive discussion on this point, and the unanimous recommendation was not to appoint professional executors. This seems to be the one straightforward action you need to do with the Will! If you have professional executors you will end up not only with a large bill but also a permanent loss of control over the execution of the estate - the beneficiaries can’t sack the executors or trustees no matter how unsatisfactory the service. If you appoint lay executors they can of course delegate as much of the work as they choose, but they remain in control.

IANAL but my understanding is that it is usual for the execution of a Will to create a Will trust, which essentially is the way of enabling the executors to handle the assets on behalf of the estate. So even wills that don’t try to do anything complicated or create ongoing Trusts will talk about the Trustees (meaning the Executors) and what they may or may not do. Usually the Will Trust will end when the assets are distributed and the executors work is over. If there are continuing trusts, then the executors can retire and appoint new Trustees (but this can’t happen if you have professional Executors, you are lumbered with them) . That may be a very simplistic lay person interpretation so I hope Clitheroekid or some other qualified person will correct any misunderstanding on my part.

An update for interested parties:

(Noting that I don't have anyone else who I can appoint as an Executor, that my siblings are of a similar age to me, my son lives on the other side of the world, and my daughter won't engage with me on the subject (thus) I am loathe to appoint her as an Executor or joint Executor. Thus currently the solicitors are my appointed Executors.).

So.... I spoke to my solicitor this morning and covered many of the aspects discussed and particularly my concerns about ongoing costs. A productive conversation.

No significant issues with appointing my wife as Executor. He actually suggested it as an option, in response to the various concerns I was expressing. Though he did suggest that maybe I should appoint wife and my son as joint Executors, even though my son lives in Australia. Distances are not such an issue these days what with email etc. I pointed out, and he acknowledged, that wife as Executor could (and almost certainly would in reality) instruct the solicitors to do what she couldn't do, even though that may well be most of the Executors work, apart from notifying organisations and collating information. Though point taken that at least she would have control of events, rather than the solicitors. (I have reservations appointing son as a joint Executor from the point of view that he is still going to need to sign various documents at various times, which would be cumbersome if he is in Australia).

If I appoint my wife sole Executor (Executrix), he did recommend putting a marker on the Land Registry records, noting my son and daughter's interests. That would protect against situations whereby for example, my wife, perhaps under the influence of others, might try and sell the property, take (all) the money and disappear, type of situations.

The solicitor did say that the ongoing trustee work wouldn't have amounted to much, just a brief check once a year to ensure property was insured and being adequately maintained, but that would have been charged to my wife, as and when. (The property is a flat, so buildings insurance paid by the Management company). Note that my wife may well sell and move back to her country within a year or so, thus it wouldn't have been an issue for very long. Though one can never be sure how these things will pan out in the future as circumstances can and do change, so Wills should try and allow for such changes.

He also explained how they would offer set fees for various transactions, such as dealing with a property sale, i.e. that wouldn't have been tacked on at an hourly rate, and how they are subject to scrutiny regarding work undertaken and charges. (I also clarified how and when the liquid assets would be distributed).

So currently I am 60/40 in favour of making my wife the sole Executor, versus leaving things with the solicitors as Executors.

[PinkDalek]

... So currently I am 60/40 in favour of making my wife the sole Executor, versus leaving things with the solicitors as Executors.

Random article in case Power Reserved has not been mentioned before:

https://www.co-oplegalservices.co.uk/media-centre/articles-jan-march-2019/what-does-power-reserved-mean-in-probate/

Others can develop, if of interest, vis-à-vis your son.

Similarly, again I don't know if mentioned previously, is it not possible to name an alternative Executor should the first (or others if more than one) be unable or no longer around to act?