I’m advising an unmarried couple. No assets in joint names, they each have an estate with a value close to the nil rate band, slightly over. They own their residence as Ts in C in equal shares.
Both are divorced. She has children from a previous relationship, he doesn’t
I have advised them to consider setting up a DT on first death, objects to be survivor and the children (who he wants to benefit also).
First question - for unmarried couples is it usual to pass the WHOLE estate to the DT and not just a value up to the NRB? Presumably so because there are no IHT exempt beneficiaries to pass the balance to.
Second question - Problem if she dies first as her estate won’t benefit from the RNRB. I presume all I can do is warn the clients of this possibility and suggest the only alternative that would work is for her to gift her share of the property directly to her children but explaining that this might compromise survivor’s security in the property. Is this the only option?
So if he dies first - whole estate to DT
If she dies first - her half share of the property to kids (presumably I can’t write in a right to reside for him as this would affect the availability of the RNRB), then balance of her estate to the DT.
What do you think?
Many thanks in advance.