I am the executor of the wills of both my father and mother. My father has only the minimum assets as several years ago he transferred his investments and the family home to my mother (his wife) His motivation for this was that he had a very substantial retirement pension and the transfer of his assets to my mother enabled her to bear the tax liability on the income from his assets. My mother thus holds assets in the region of around £700,000, including the family home.
Time has passed and both parents are now in their nineties and are increasingly aware of their mortality. They are concerned about a possible adverse IHT outcome relating the order of their demise. Should my father be the first to die there would be no probate requirement nor IHT implication, as his retirement pension will die with him and he has now little other assets.
if my father is the first to die, my mothers personal IHT allowance, plus the unused IHT allowance of her deceased spouse, would ensure that there would have no IHT liability on her estate. However should my mother be the first to die, she would only have the single IHT allowance of £325,000, as my father would still be alive and there would be a substantial IHT liability on my mother’s estate.
Is there any way, should my mother be the first to die, that the double IHT allowance could be claimed against her estate, notwithstanding the fact that her spouse would still be alive. They are considering the necessity of changing my Mothers will to leave her estate to my father, to cover the IHT issue. Presently both their wills leave everything to me as their only child.
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