Our office took a call not long ago from a young lady we shall call Jane who was after some advice.
Jane aged 29 and her Fiancé Jon aged 26 had been together for the last 4 years living in Jane’s flat, and had long been planning their wedding for September 2016, during which time they had been striving to save for a deposit for their dream ‘family home’ which they were due to move into sometime in April 2016.
Their plan was to get married, have a couple of children, and when Jon retires from the Armed Forces their dream home would be paid off. Sounds perfect, this is a typical lifetime plan that most of us dream of isn’t it?
UNFORTUNATELY
Jon died in January 2016, aged 26! He was fit & healthy, but sadly died of S.A.D.S. (Sudden Adult Death Syndrome) which is caused by a ‘ventricular arrhythmia’ – a disturbance in the heart’s rhythm. It can strike at any age and affects those who are fit and athletic. It mainly affects young men – often when they are asleep.
If this wasn’t bad enough they had both recently exchanged contracts on their dream home with a purchase price of £550,000, utilising a mortgage of £450,000.
They had a life policy of £450,000 to cover the cost of the mortgage, but this wasn’t put into Trust.
They had not yet done their Will’s as they were waiting until they got married later this year.
Jon also had a Death in Service benefit from his employers.
As a result;
Jane has lost her Fiancé of 4 years.
The Death in Service has paid out…to John’s parents as they were his next of kin, and they’re keeping it as they’re looking to retire soon.
Jane is legally committed to buy the house.
Jon’s estate now exceeds the Nil Rate Band as the Life Policy wasn’t in trust and was paid direct into Jon’s estate.
Approximately £100,000 IHT bill due.
Jon’s parents won’t speak to Jane or take her calls.
This is a true story and highlights WHY you should have life policies placed into Trust, and the Will’s should be written irrespective of whether you’re married, have kids, or still in your 20’s!