Relationships

If a spouse dies what happens to their ISA?

If their ISAs were in their own name, then they form part of their estate and they will be left to whoever they have left their property to, either through a will or, if they haven't made a will, it will go to the people in accordance with the rules of what is called intestacy. An ISA is just like everything else. It's part of their estate, and if the estate is big enough then tax will be paid, even on an ISA.

What are the financial advantages of getting married to your partner in later life?

There are some financial advantages in being married. These advantages are mainly for one partner rather than the other. They are the advantages for the partner who has less. Once you're married, and it's the same for civil partnerships if you're both the same sex, then you have a right to a share of your spouse's money and your spouse's property. So if you're the financially weaker partner, it's generally better to be married. If you're the financially stronger partner, it's generally better not to be married. The other advantage, and this is one that people see a lot in, is that when one of you dies which inevitably will happen, anything that's left to the spouse is free of inheritance tax. Now that's good after the first death, because it means you can live in the same house, you can have the same property, you can have the same money. But, of course, when the second person dies, there's going to be a bigger tax bill before the money is left to the heirs if there are any children or whatever. So it has some advantages there. It means, as a couple, you needn't worry about who dies first, financially.

What are the financial implications of a spouse dying?

Well that depends on how you've organized your money and how you've organized your wills. If your spouse dies than anything you own jointly, whether it's a joint house, a joint bank account, or a joint savings account, becomes the property of the other partner. This only applies to married couples and same sex couples who are in civil partnerships. If you are just living with someone then that doesn't apply. But if you are married or are civil partner, than anything in joint names becomes the property of the survivor if their spouse dies. Anything that wasn't in joint names, like some savings or property they own themselves, or their car, or their possessions, then forms part of their estate. And where that goes will depend on what they've said in their will.