What all Paraplanners should know about estate planning
On 11th June, John Bunker joined us for a Howwow special on estate planning basics, focussing on the processes and procedures to be aware of. Plus we dipped into the special measures taken during COVID-19. John delivers legal and tax training, as well as consulting for Irwin Mitchell.
Replay, slides and a couple of questions we didn’t have time to get to
If you missed it or want to watch again, you can watch the replay here. You can also get a copy of John’s slides here.
There were two questions that we didn’t have time to get to on the show but John has taken a look at them and answered them here. We’ve copied and pasted the questions straight from the ‘Ask a question’ area of the Howwow. You can get full context by watching the replay.
How is the residence nil rate band impacted where the main residence was owned as tenants in common 50:50 and the 50% paid out to sons, prior to RNRB. Widow has downsized to a property which is now worth less than her own RNRB. Is the deceased’s RNRB lost in this case?
Yes but this isn’t straightforward. There are some principles:
- If a deceased spouse left half to the sons, or that was done from his estate, then the widow’s half share is in her estate and she has a potential NRB of her own plus possibly part TNRB to transfer if the half share of property is less than value of spouse’s NRB.
- If downsized since July 2015, she can look at value of earlier half share of property, and claim a “downsizing addition” on top of the RNRB for the house she has.
- If the spouse died pre RNRB, she can claim TRNRB and may have more than one RNRB if sufficient value in previous property.
- RNRB will be lost if the value of her current property and any downsizing addition is less than the full RNRB available.
Can you use a DoV to remove/change benefits which were to be paid to a minor, even if you are looking to give them a share of a house, as an alternative to another asset, to use a RNRB?
You cannot do a DoV to take away anything from a minor. If that minor is the right beneficiary e.g. child or grandchild, and has the right trust in the will (e.g. bare trust or 18-25 if a child) so closely inherits, it does have possibilities.
- If child say has half estate and house worth £500K, their half = £250K and could use £175K RNRB. It doesn’t need a specific gift; it could be just a share of the estate.