ASK THE EXPERTS: You can't leave Isas to your sons in a will
|
UPDATED:
21:07 GMT, 17 March 2012
This
week's experts are PAULA JAMES, a partner with solicitor Thomas Eggar
in Worthing, West Sussex; MICHAEL GARVEY, from advisers Edinburgh
Wealth Management in Edinburgh; and FIONA SHARP, a financial planner
and specialist in divorce issues at Almary Green in Cambridge. Do you
have a personal finance query Write to: Ask the Experts, Room 301,
Northcliffe House, 2 Derry Street, London W8 5TS.
S.P. writes: My wife and I recently updated our joint wills to ensure everything passes to our sons after our deaths. But I have since been told that any cash or share Isa investments cannot be covered by a joint will. Is this true
P.J. replies: The proceeds of an Isa pass into a deceased’s estate like any other asset. Remember, an Isa is an individual savings account and cannot be jointly held and will not automatically pass to a spouse on death. But it will be cashed in by the executors of the deceased who will then deal with paying the estate’s liabilities, legacies and then dividing the residue in accordance with the will.
It is not possible to have a joint will. You have probably made two separate wills, the terms of which ‘mirror’ each other so that you leave all your individually held assets to your spouse.
It is likely that only after the second death will your assets and investments pass to your sons in specified shares.
Safe savings
D.J. writes: I have savings with Cheltenham & Gloucester, Scottish Widows and Birmingham Midshires. I know these are all part of Lloyds and that taken together the value of my accounts is more than the 85,000 covered by the deposit guarantees. Is this safe or should I diversify elsewhere
M.G. replies: Protection under the Financial Services Compensation Scheme – 85,000 per depositor, per institution – depends on the Firm Reference Number (FRN) of each institution as specified by the Financial Services Authority.
While they have a common parent, each of the institutions you mention has a different FRN. Therefore you will be covered for the first 85,000 of deposits that you hold with each provider respectively. The 85,000 includes any interest due to you at the date the bank defaults.
Check FRNs at fsa.gov.uk/consumer information/uk_groups.
Does my new partner’s cash count in divorce
H.G. writes: My husband and I are divorcing. No children are involved. Would any financial settlement take account of my new partner’s income and savings
F.S. replies: It would normally take account of your financial needs, such as housing and living costs. The length of your marriage and the assets acquired during it will also be a factor.
If you intend to, or do, cohabit with a new partner, then their assets and income should be disclosed on your financial statement as living costs may be shared. If you are not cohabiting, then your partner’s situation should have little bearing on the outcome.