I have the following scenario for a will:
Mrs X owns 2 properties each subject to mortgage. Gross estate perhaps £1.1m, loans around £490k. She is not married but has partner and two minor children. She wants to give estate to children but give partner right to occupy property that isn’t family home. There are no substantial liquid assets in estate.
She has 2 life policies which pay out £750k and have been gifted to children.
I am struggling to come up with a solution to acheive what she wants. There will be some IHT due on her death and whilst her children may use the life policies to clear the loans and tax, that can’t be relied upon, particularly if they are still minors.
I am considering including a specific gift of the family home to children subject to IHT and loans so that at least those debts of the estate can be cleared from the life policy proceeds.
Any suggestions for an elegant solution?