ASK THE EXPERTS: Can I keep my daughters out of a £300,000 will?

By Edited By Stephen Womack

This week's experts are PHILLIPA BRUCE-KERR, a partner at solicitors Rickerbys in Cheltenham, Gloucestershire; DAVID HOLLINGWORTH at broker London & Country Mortgages in Bath, Somerset; and MATT COWARD, partner at accountant Price Bailey in London. Do you have a personal finance query? If so, write to: Ask the Experts, Room 445, Northcliffe House, 2 Derry Street, London W8 5TS. Please do not send original documents. Sorry, no personal replies.

K.W. writes: I feel estranged from my three adult daughters following a divorce.

I wish to leave my estate, worth about £300,000, to a long-standing friend.

Could my daughters challenge this after my death and how can I make the legacy watertight?

Ask the Experts cartoon

P.B-K.replies: Unfortunately, strains on family relationships in these circumstances are all too frequent.

While in theory you can leave your estate to whoever you choose, there is a risk that your daughters could successfully challenge a will that made little or no provision for them.

You should take legal advice. It is possible that steps such as leaving a letter detailing the history of your relationship, giving your daughters something as opposed to nothing, or perhaps using a trust in the will may reduce the risks of a successful claim.

However, in recent cases even this type of step has not prevented the court making awards in favour of estranged children.

You can avoid capital gains on SAYE shares

T.A.writes: I have paid into a Save As You Earn scheme at work for almost five years.

I will soon be able to use the money to buy shares at a discount and look set for a good profit if I sell at once. Will the profit be taxed?

M.C.says: There should be no income tax liability when you receive the shares, but there may be capital gains tax on any profit.

This is charged at 18 per cent if you are a basic-rate taxpayer and 28 per cent for a higher-rate taxpayer.

But you can offset your annual exemption, currently £10,600, against the gain provided you have not made any other chargeable disposals during the tax year.

Mortgage plea

M.S. writes: My son and daughterin- law are trying to remortgage but are in an Individual Voluntary Arrangement with three years to run.

Is there anyone who can help them and what is the best sort of rate they could expect?

D.H. replies: The credit crunch has brought stricter mortgage conditions and there is little choice for your son and daughter-in-law.

MBS Lending is a subsidiary of Melton Mowbray Building Society. It deals through brokers with those who have had credit difficulties, but at rates significantly higher than the mainstream mortgage market.

A borrower with an IVA that is being managed satisfactorily might qualify for a mortgage at nine per cent variable from MBS Lending.

This is only for loans up to 50 per cent of the property value with a fee of £2,045. They may be better off talking to their existing lender to see if there are any offers.