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If you have a Will and you have children, have you left money to their Guardian and/or how have you provided for them?(13 Posts)
My husband and I currently don't have Wills. To be honest he has been reluctant to discuss but he has agreed we should do something. We have asked my sister if she would take our two sons (she has two sons of her own) and she has said yes. She lives with her long term partner (they have been together longer than us and we've been married 10 years), happily I believe, but they are not married. I am not sure whether they own their house as joint tenants or tenants in common, or even if that is important to this question but trying to give background.
My main concern is to make production for our sons if (God forbid) my husband and I both died. But if my sister had to take on our two boys that would have a significant impact on her and her family (partner and their boys). They currently live in a 3 bed house in an expensive area. I imagine they'd have to move house if they gained two children. So I'd like to somehow 'compensate' them, for example by enabling them to buy a bigger house. But I don't know how to do this in a way that is fair to everyone. We are not particularly wealthy and our only real asset of any worth is our house. Due to bonkers property price rises where we live this is currently worth about £650k. Property prices where my sister lives are roughly similar.
I have called a local solicitor and initially asked if this is even something they can advise on - the options and ways of doing this. The secretary didn't know and is going to call me back.
I am not asking for legal advice as such, but I just wondered how others have managed this? Have you left the guardian a lump sum, or nothing, or some other arrangement?
As far as I know you can set up your money to go into a trust fund for the boys until they are 18/21 and make your sister a trustee. She can then use the money (from your house/life insurance) to provide for the boys. We have four trustees and all have to agree to spend major amounts of cash/capital for anything.
I can't give legal advice but this is what we have out in place:
Life insurance to pay off the mortgage if one of us dies
Death in service benefits for my DH
Substantial life insurance for me (self employed)
Will stipulates that all funds will be put into a trust for the DC until they are 25 yo.
Trustees representing both our families have been named who would have the power to agree to spend the children's money to their benefit (eg for housing or education) as appropriate.
I think - but would have to check the finer details - that the money from our estate (should DH and I die together, and the DC need to be sent to my sister!) is held in trust to provide for our DC. The executors of that trust are my Dsis and Dbro and DSIL, and they have to "act in the interests of the DC". In practise, this would mean selling our house, and using at least some of the proceeds to buy my Dsis & DBIL a larger house to accommodate all the DC of both families and pay for associated costs of a much larger family. Then I guess I am trusting that when that house needed to be sold my Dsis would see that my DC had the money in share that was due to them. I trust my Dsis completely, and know she would treat the DC fairly. However, the extra executors (Dbro and DSIL) are there so that there are other parties to "oversee" the way the money in the trust is spent, to provide checks and balances.
In my mind, the DC have to be provided for and the money we leave is for the guardians to spend to provide for them. It's not really my DCs "inheritance" until they are grown and don't need financial support any more. So the DC will get what's left, if any, from the trust when they reach the age they're no longer provided for.
Our Wills nominate a guardian and a fallback guardian.
Aside from some bequests, everything is left in trust for the children, and the trustees are the nominees for guardianship and another (reliable/savvy) friend. The trustees will be able to decide how anything from the trust is spent in the best interests of the DC until of age. Which can include providing material support (eg housing for the guardian) and covering their living costs so no-one has to take a hit for caring for them for however long is needed. It's deliberately not prescriptive, so those people, who essentially I am trusting to step in as parents, can make whatever decisions they think are best in the actual circumstances.
What I'd like best is for SIL (who is fairly peripatetic anyhow) to come and live in our house so DC can stay somewhere familiar and in the same schools with same friends. I've told people this, but have not attempted to formalise it (not sure if that would even be possible), just made it a possible choice.
Thank you. I know no one can give legal advice but I don't even know what the options are. If money is in trust for our boys and is spent on a house where my sister and her family lives then would part of their house belong to our boys or would it fully belong to her and her partner? I'm not sure it would be right if my did and h family had to sell a house that had become their family home if they had raised our boys and then the money needed to be paid back. But on the other hand I wouldn't want my sister to live in a wonderful house and our boys not inherit much/anything when they've been unlucky enough to lose both parents.
We have life insurance that would pay off the mortgage. And we both have death in service benefit from work (although I can't remember off the top of my head how much that is).
I think what would happen is that the trust would "own" a share of the new larger house. So when that was eventually sold (to downsize when all DC had left home) then the DC would then get the share back again. Does that make sense? So in effect the DC would own a share of the new larger house. The timings of when things would be sold to release the money I guess would be decided between the trustees when the money was taken out of the trust.
I just accept that I cannot control anything when I'm gone, and that I love and trust the people who will look out for my DC, and they love them, so it will all work out OK.
Thank you all. It sounds like the choice of trustees is going to be key. Probably some of my husband's siblings as well as my sister and possibly my parents. Yes I trust my sister completely and can't imagine she would try to take advantage.
You've just suggested 5 trustees there - sounds a lot!
I know my sister (guardian) has a big enough house so that's not an issue. I also know she would gladly have my child without expecting any money for that - one reason she's the guardian.
All my assets go to my child, in trust, and the trustee is my sister. The only exception is a lump sum for my sister directly so that she has some money to play with without justifying it to anyone. For example, if she thought a big holiday was a good idea to bring them all together as a family then she can just do it. Or if she decide her house needed an extra loo - no need to justify it.
We both have one child and she has a good income. If I had more kids and taking them on would be a stretch, I'd leave her more money directly.
I had never thought about trustees before. I don't know how many is usual but yes I can se having too many would be impossible decision making. Maybe not my oarents but my sister plus one of my husband's siblings to keep their side involved.
Cabrinha - it's interesting you are leaving money directly to your sister. I think I'd like to do that. Not because she would expect it but I think she'd deserve it for taking on our boys. Lovely as they are ;)
I actually think you need more life insurance - a lump sum to the people who will have to sell thier house and disrupt thier own children's lives to accomate your children. So they can buy a bigger house, which they will then not have to sell off when your kids reach a majority to provide them with an inheritance despite having moved to accomadate your children. Then set up a separate 'inheritance' fund and a separate living funds administered by trustees.
I think the clue here is in the name given to those who will make the decision after your death - Trustees.
You appoint them because you trust them to do the right thing. Just let them get on with things and don't over-think things. If you try and micro-manage from beyond the grave you may well end up hamstringing the trust.
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