A complex (rather) IHT case and I could use some advice and guidance please!
1. Wife died in January 2011: she left her estate to husband. Not only what was her residential property, which she purchased prior to marriage, but also an investment property, which she purchased primarily to house her elderly mother.
2. Husband died, (suddenly) in December 23rd 2000 after contracting Covid-19.
3. His will left 50% to his live-in partner (not married, not in a formal civil relationship) and the balance to his two natural children.
4. Unfortunately. his partner died on January 19th 2021.
5. The survivorship clause in the husband’s will stated: “Any beneficiary who does not survive me by 28 days shall be deemed for all purposes of my will (except clause 3) to have predeceased me”.
Thus she is out of the picture and the children inherit 100% of the net estate.
6. To further complicate matters, the husband, after the death of his Mother-in-Law, moved with his live-in partner, to the investment property and allowed his children to live in his main residence, inherited from deceased spouse!
However, I believe that since he had earlier occupied the main residence for some years after his wife's death, this should not complicate the allowances.
Now, what is not known is the value of the wife’s estate and what allowances her executor claimed against Her IHT: I understand this could impact any claim for spouse’s allowance on her husband’s estate, on a proportion basis.
The Gross Estate is circa £620,000: The Net Estate is circa £ 480,000.
Any input on the allowances which can be claimed would be very helpful.
One final point: the husband left a Life Assurance of £50,000 for the exclusive benefit of his live-in Partner: this had been written In trust. However, as she had been deemed to have pre-deceased him, the Insurance Underwriters paid this out in full to the two surviving children. However, as the trust would clearly have been dissolved, (On the death of the named beneficiary) then I believe the £50,000 benefit should have been declared as part of the estate and subject to any IHT arising, as no trust existed with the children as beneficiaries and any changes of the trust would be impossible as the Settlor was deceased.
My head hurts now......