Share this content
3

Widow as life tenant-disappearing income-

Mr F died 10 years ago, left his wife as life tenant, Income has halved-suggestions?

Didn't find your answer?

Conventional will with widow[ aged ca.60 at H's death] as life tenant,, remoter family members as remaindermen.. Family relationships are not very good

The problem is that yields on investements have fallen throughout the period since death-the investment managers have been conscious of the issues and have maintained capital values and within usual constraints , leant towards income .

Whilst falling yields have of coursse affected all savers, the position of the widow is particularly cruel as the trustees cannot just have access to capital to maintain her standard of living.

The widow is now in her 70's and healthy.

 Any ideas?

Replies (3)

Please login or register to join the discussion.

avatar
By Tax Dragon
21st Aug 2019 06:44

A conventional will (conventional IME anyway) would give discretionary access to capital. Since "remoter family members" doesn't sound like children, were I a trustee I might apply a lower threshold of widow's need in exercising such discretion.

Trustees can be in an invidious position. Is there a letter of wishes?

Absent such power, and only if widow is genuinely desperate, can they lend to her?

Thanks (0)
avatar
By paul.benny
21st Aug 2019 08:49

Have you considered state benefits? She may be entitled to reduction in council tax, pension credit and other means-tested benefits. There is a free and anonymous benefit calculator at turn2us.org; Citizens Advice locally can assist with the application process if she/you don't want to incur fees.

Age UK can also be a useful resource for advice.

Thanks (0)
Hallerud at Easter
By DJKL
21st Aug 2019 10:34

I have managed to earn circa 3.0%-3.5% on income plus circa 6.5% annual capital growth on my late father's trust since November 2013.

The income side is pretty easy to predict/guarantee with a mix of investment trusts focused around the world targeting a blended average of currently circa 3.5% dividend yield, 7% total return. The capital side has done better than I was aiming for, circa 41% up since November 2013 as at April 2019 but this year since then has seen some reversals and I expect the half year October report to be down a bit on the 30th April one.

Not all equal weight, here are the current holdings, only one sale since 2013, we sold part of the Scottish Mortgage holding as it had done very well and had somewhat imbalanced the the portfolio.

Blackrock World Mining
City of London IT
Henderson Far East Income
JP Morgan European
North American Income Trust
Scottish American IT
Scottish Mortgage IT
Standard Life Property Income

I have a slight advantage, the parties who will enjoy the capital are my own children/my nieces/my nephews, none of them will sue me if I get the income/capital balance slightly askew.

Thanks (0)
Share this content