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Where Taxpayers and Advisers Meet

IPDI Query

Another1
Posts:27
Joined:Sun Apr 04, 2021 12:17 pm
IPDI Query

Postby Another1 » Fri Jan 21, 2022 12:19 pm

If a Mirror Will is worded to show Immediate post-death interest (IPDI),would the following procedure be correct for the surviving spouse to inherit the deceased estate?

For the surviving spouse to take control (effectively inheriting) of all of the deceased assets by way of a ‘loan’,I presume the Executors would write a ‘loan note’,stating such.However how would this work in practice?.If the assets were made up of Equity investments and Building Society accounts,would it be a case of the Executors simply writing to the respective provider requesting that the accounts be changed to the new holder,namely the surviving spouse?

Would RNRB and NRB be transferred automatically?

I presume none of the above is relevant upon second death and estate would pass to next in line as referenced in Will?

Another1
Posts:27
Joined:Sun Apr 04, 2021 12:17 pm

Re: IPDI Query

Postby Another1 » Mon Feb 07, 2022 1:23 pm

Any advice out there?

AGoodman
Posts:1419
Joined:Fri May 16, 2014 3:47 pm

Re: IPDI Query

Postby AGoodman » Mon Feb 07, 2022 5:34 pm

A life tenant with an IPDI doesn't "inherit" the estate, they just get a right to the income or to use the assets. A loan to the life tenant under an IPDI would be unusual so there is no correct procedure. The executors/trustees might be able to do it but they would likely need to liquidate the estate and lend it under a written loan agreement. You can't lend or re-denominate a bank account, you have to transfer the cash over. On the second death you would have to wind up two estates, including the repayment of any loan from the second to the first.

The estate would be exempt so no use of NRBs at all and you don't transfer NRBs until the second death.

If the estate is of a size where transferrable nil rand bands are relevant, you should definitely be taking advice on this.

Another1
Posts:27
Joined:Sun Apr 04, 2021 12:17 pm

Re: IPDI Query

Postby Another1 » Mon Feb 07, 2022 5:53 pm

Thank you,..Agoodman.

If the IPDI wording in the Will was to protect against ‘care home fees’ and it became acceptable to forego this option,I presume a standard mirror will would make the situation much simpler and straightforward as far as a surviving spouse inheriting deceased assets?


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