ASK THE EXPERTS: Husband’s DIY will may force you to leave home

By Edited By Stephen Womack
This week’s experts are PAULA JAMES, partner with solicitor Thomas Eggar in Worthing, West Sussex; HELEN KANOLIK, who runs HelenK Financial Advice in Wimborne, Dorset; GRAEME TRUDGILL, head of corporate affairs at the British Insurance Brokers’ Association; and Patrick Harrison, a tax partner in the London office of accountant PKF.

P.A.writes: My husband has recently made a new will, using a kit bought from a stationer.

He has left equal shares in half our home to our five grandchildren once they reach 25.

But we are worried this is not valid. Can you make such a legacy?

P.J.replies: It is possible to make a valid legacy in this way, but you, your grandchildren and the executors of your husband’s will may wish he hadn’t.
The likely effect of the clause is that on your husband’s death the executors become the owners of half your house. They will have the onerous responsibility of looking after the investment until the youngest grandchild turns 25.
If you are living in the house and the executors wish to sell it to turn the investment into cash, you may have to move out.
Having multiple owners of a property – with different ideas on maintenance, improvements and ultimately the timing and price of a sale – always gives potential for conflict.
If by the time your husband dies the house has been sold, the whole legacy could fail and the grandchildren may be left with nothing.
Using a solicitor will cost more than doing a will yourself, but an experienced professional can point out the pitfalls. In this case, they could also help to draft a trust to give effect to your husband’s wishes without prejudicing your right to stay in your home after his death.

Annuity plea

V.B.writes: I have a short-term annuity with Canada Life that matures in March. The income stops, but the plan pays out £24,500 to buy another annuity. I’ve been diagnosed with a medical condition that is expected to prove terminal. Is there any way I can take the money as a lump sum?

H.K.replies: I am sorry to hear of your situation, but I am afraid there is little flexibility in this position.
Once a pension plan has been converted into an annuity, money is paid out only in the form of income and you cannot take it all as a lump sum. In some cases, a spouse can be added when the annuity is renewed, but you may not be able to do this.
You have to use the £24,500 to buy another annuity. You should ask an independent adviser to shop around to get the best rate. They can contact the companies that offer enhanced rates to those in poor health.  
You should request and compare the results for an annuity payable annually in advance – so that you get one year’s income upfront – with monthly income.
Canada Life does offer enhanced rates and may come out best.

What cover do we need for big trip after retirement?

P.Y.writes: We are buying a motorhome to tour around Europe after retirement later this year. What insurance will we need for  an extended trip away from Britain and who specialises in this type  of cover?

G.T.replies: You will need a specific motorhome policy that covers the extended period you will be spending abroad.
Provided you are a UK resident and have a permanent home address that is not rented out, then a specialist insurance broker can arrange cover for up to a year of touring Europe.
Broker AJ Insurance specialises in motorhome cover and you can find other brokers at biba.org.uk or by calling the consumer helpline on 0870 950 1790.
Remember to advise your home insurer of any trip where you are away for more than 30 days to ensure the cover remains valid.
Do you have a personal finance query? Write to: Ask the Experts, Financial Mail on Sunday, Room 301, Northcliffe House, 2 Derry Street, London W8 5TS. Sorry, no personal replies.