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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11153
Experience:  30 years as a practising solicitor.
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Hi, I have a property worth £500,000. I want to make a will

Resolved Question:

Hi, I have a property worth £500,000. I want to make a will leaving it to my husband age 65 to live in for his life time and for my children age 13 and 12 to own after he dies. What kind of trust do I need to draw up and would IHT be payable on my death?
Submitted: 3 years ago.
Category: Scots Law
Expert:  Remus2004 replied 3 years ago.

Jo C. :

Thank youHi. Thank you for your question. My name is XXXXX XXXXX I will try to help with this.

Customer: replied 3 years ago.

Thanks, XXXXX XXXXX forward to hearing from you

Expert:  JGM replied 3 years ago.
Thank you for your question.

You can do this with a will. You leave the house to your husband in liferent and to your children in fee. That means the heritable property right goes to your children with the liferent allowing your husband to remain in the house until he dies.

Because the property is valued at above the IHT threshold there would be tax to pay your death.

Happy to discuss further.

I hope this helps. Please leave a positive response so that I am credited for my time.
Customer: replied 3 years ago.

How can the iht be paid without selling the house? How could my husband continue to live there if the house had to be sold to pay the tax bill?

Expert:  JGM replied 3 years ago.
If you have no other estate other than the house then the best way to proceed would be to leave the house to your husband as there is no IHT payable where the spouse inherits.

Alternatively, if you are not comfortable with this you could transfer the house to your children when they turn 16 reserving a liferent to both you and your husband and the survivor of you.

Finally you could consider placing the property into a family trust.
Customer: replied 3 years ago.

Hi thanks for your advice. I am still unclear about what kind of trust I would need to have drawn up if my children are to receive the house without having to pay IHT when I die. Would it be called a Discretionary trust, Accumulation and Maintenance trust? Also if I put the property into a family trust would it avoid IHT?

Expert:  JGM replied 3 years ago.
It is likely to be a discretionary trust but the solicitor you choose to prepare the documentation will undoubtedly advise what is best in your specific circumstances.

If the property is transferred to a trust and the transferrors survive for seven years there is no IHT to pay on death.
Customer: replied 3 years ago.

Thanks, XXXXX XXXXX point I need to consider all of this is what age can my children become executors for me? Is it 16?

Expert:  JGM replied 3 years ago.
No, they should be 18.
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 11153
Experience: 30 years as a practising solicitor.
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