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How best to share out an inheritance with nieces and nephews not included in the will?

(27 Posts)
freebox Thu 05-Nov-09 09:40:30

A few years ago, a relative died and left quite a nice sum of money to each of my 2 children (as well as some for me and my siblings) to use for their education.

But since then, we have had another child, one of my siblings has had three children and the other is planning to start a family and I think I ought to share the money out. But how can I make it fair?

I thought about giving my siblings one third of it each, but this won't be equal if we don't all have the same number of children. Or I could wait until everyone has finished having babies and split it evenly between all the cousins. There is also the question of wealth in each family as the existing cousins have quite well-off grandparents and the future ones won't have (and nor have my DC). But that makes it all v complicated.

Any suggestions?

piprabbit Thu 05-Nov-09 10:49:06

Are you under pressure from your siblings to redistribute this money?

Personally, I feel you should respect the wishes of the relative who was kind enough to leave your DCs some money. It was their choice to leave this particular money to your DCs - if they had wanted it to be split between all future, potential children in the family surely it would have made more sense to include it in the sums you and your siblings were left.

Also, from another perspective, do you have a legal right to redistribute this money? If it belongs to your children, can you really jump in and hand it over to someone else even if it is not in the best interests of the actual owners i.e. your children?

The only action I would be tempted to take would be to set aside some of your own money for an education fund for your third child so that they are not disadvantaged compared to their siblings.

Sorry if it's not the reply you were hoping for... sounds like a complicated situation.

NotActuallyAMum Thu 05-Nov-09 10:56:23

So...let me get this right:

You and your siblings were each left some money, plus an additional sum was left for your children only because at the time your siblings didn't have any?

Assuming that's the case, first of all I think it's very, very good of you to consider sharing it out. Lots of people wouldn't. You do know you don't have to don't you? If the relative had wanted to provide for future children they must surely have known this was an option and could have left the money in trust until a certain date

If you do share it out, personally I think the only way is to wait till everyone's finished having children then split it equally. I don't think other family circumstances should come into it, otherwise it looks like it would get very complicated

Just my opinion though, others could see it differently

Merrylegs Thu 05-Nov-09 11:05:45

You say your sister has had three children since this relative died. So it must have been a good few years ago? I have to agree with piprabbit. You can't legislate for what 'might' happen in the future. The money was left to you according to your circumstances at the time. And for a specific reason - your children's education. If you redistribute it down the generations will that not compromise your relative's initial wish?

Your siblings also inherited so they have not been left out, have they?

HeSaysSheSays Thu 05-Nov-09 11:09:26

It is lovely of you to do this!

Ok, first up, how much is it? (sorry, I don't want figures obviously) I mean, is it enough to pay for your dc education? Will there be any left at the end of it?

If there is just enough to cover your dc education then it is a difficult one, splitting it between, potentially 8 or 9 will mean that no-one gets a significant amount, the wealthier families will not need it and the poorer ones will not get much help IYSWIM. The problem is that you will not know how things will turn out until the dc are all ready to go to uni - if they go, which some may not!

TBH I would be tempted to invest it all specifically with a view to paying for education and then leave it, re-assess around the time that yours are ready to use it (being the oldest). By then it may be obvious that one or other of you is struggling more and needs more help whilst another is doing fine without any help. Because it is "your" money you get to decide how it is used so I think it is perfectly fair to say that you are going to use it for whoever needs it most at the time (actually I wouldn't tell anyone that, I would just say that you are going to decide once the dc are older).

You also have no idea how education funding etc is going to change in the future, commiting yourself now to a course of action could be foolish really.

HeSaysSheSays Thu 05-Nov-09 11:11:21

Actually, was it left in trust to your dc? If it was then I am not sure if you are "allowed" to re-distribute it. May be worth checking with your solicitor on that one?

allaboutme Thu 05-Nov-09 11:14:37

i would re jig your money so all 3 of your children have equal amounts and leave your siblings to do the same with their money (or not if they wish) for their own children tbh

freebox Thu 05-Nov-09 12:10:22

No it wasn't left in trust, it was just a specified sum for each of them that I have had invested for the past 7 years.

As it is, it would probably see them both through university, but yes, split between 8 or 9 children it won't go very far!

I know I don't have to redistribute it but it seems unfair to keep it all for my children simply by virtue of them being older, and therefore having known, and been adored by, the relative. I wonder if redistributing it would go against her wishes, but as she loved children she would undoubtedly have left some to the others if she'd known them. I wonder why she didn't think of this when writing the will? It's very difficult to know what to do.

snorkie Thu 05-Nov-09 12:10:52

Tricky. As it's your childrens in trust then I think you can't redistribute it (they could when of age, maybe). Also, since it all happened a while ago it's too late to make a deed of variation on the will. I think I'd leave things as they are (life isn't fair after all) and be extra generous with xmas & birthady pressies to your nieces & nephews to compensate.

As an aside, a similarish but easily resolved issue arose when my mother died. She left a small amount to all the grandchildren, but the way the Will was worded it excluded dd since she was born just a few days after she died (but before the Will was executed). My dad just gave her the same amount as he said Mum wouldn't have wanted her excluded.

snorkie Thu 05-Nov-09 12:12:18

freebox even if it's not in trust, it's still theirs rather than yours presumabably?

LoveBeingAMummy Thu 05-Nov-09 12:14:41

Your relative left them money for their education, if you split it then it won't pay for that, I would say you shouldn't split it or just take a small token amount. The money has been left to your children for a specific purpose and that is what it should be spent on.

AvengingGerbil Thu 05-Nov-09 12:27:38

I think if the money was left to specified children for a specified purpose, it might well be a trust even if it did not use that word in the will. In which case it is not your money, it is those children's and you would be breaking the law by redistributing it.

You need to get proper legal advice on the exact nature of the bequests under the will. Otherwise you generous impulse may turn into a legal quagmire and no-one will get anything.

freebox Thu 05-Nov-09 13:18:20

She meant education in the broadest sense of self-improvement I think, ie not just university, but travel or culture or whatever. Just not clothes, parties and gambling!

But yes I suppose it is theirs not mine, it just seems rather unfair on my nephews and nieces, not to mention my own DC3!

cleanandclothed Thu 05-Nov-09 13:35:35

Do you have any anticipation of further inheritances (eg grandparents, parents)? If I was in your position and I thought that at some point in the future someone else would leave me money, I would wait and then do a deed of variation on my inheritance at a later date. That is not taking money from your children but does still even things out, but means you do not have to find it from your cash at the minute. It may not even things out exactly, but would be a nice gesture.

Doodleydoo Thu 05-Nov-09 13:45:33

OK, you are a very nice person for thinking of all of your relatives BUT you deceased relative left the specific amounts to your dc and therefore I believe you should respect this wish as the relative obviously knew and cared for them and wanted them to have a future that they contributed to.

So on a selfish note I would be inclined to leave it as is, as the others are all recieving something anyway. But you could discuss with your dc the possibility of splitting THEIR inheritance between the three of them rather than just the two of your original children. This would make financial sense to your own nuclear family as it would mean the financial stress to provide the "same" to your dc3 is taken off.

However if you really feel that everyone should have a share then I would recommend taking legal advice to make it a proper judgement. you must remember that the share your siblings recieved would be for them to use at their own discretion. Incidentally you mentioned that you had invested it for 7 years, is this everyones money or just yours? I am not sure what the legal implications would be here because if the others disagreed with your initial investment decision you could open a whole other can of worms iyswim.

However I think you have been very thoughtful and for that reason I am going to give you a biscuit purely because I want to use it!!!!! If only everyone was as kind as you!

(BTW do you think if the role was reversed your siblings would think of this too?)

FakePlasticTrees Thu 05-Nov-09 13:49:29

Sorry, but the money was left to your 2 DC's, it's not yours to be generous with! If they want to share it with younger sibling/cousins when they are 18, then fine, but it's not your decision to make.

Your relative left the money to the children they had a relationship with. Not to ones they had never met. (If they wanted to do that, they would have left more to your other siblings to allow for the possibility of more DCs)

You could start saving for DC3 to make it 'fair', at least you'll only have 1 to pay for through Uni rather than 3...

freebox Thu 05-Nov-09 13:52:02

No further inheritance likely in the forseeable (I hope!)

I will ask my mother what was actually specified in the will because I don't know exactly. It definitely isn't in trust - I was just given a cheque which I have invested on their behalf.

Maybe I should just keep it invested and reassess when my oldest reaches university age.

crokky Thu 05-Nov-09 14:02:01

freebox - I don't think people usually consider the number of children when doing wills.

eg My MIL and FIL have 2 sons (DH and BIL). PLSs have left their bungalow and any money that they have to DH and BIL with a 50:50 split. Me and DH have 2 DCs and BIL has no DCs - but it doesn't mean BIL should inherit less than 50% of PIL's stuff does it, just because he has no DCs?

I think that you should leave it all well alone! In your position, I would try and save some money for your DC3 to even it up yourself between your own children.

Another example for you, I know of an old lady who had no children and was a widow. She died and her will left her house and money to her nieces and nephews. It was not split evenly at all - each person received a specified amount, varying MASSIVELY! FIL was one of the beneficiaries and he received £1,000 and FIL's cousin received £150,000 !!!!! Obv this lady didn't like FIL much grin, but anyway, those were her wishes and I think you should stick to them really.

UberCoolName Thu 05-Nov-09 14:11:20

This happened to me; my great grandfather left money (in trust) to only those great grandchildren who he had met- he even stated something on the lines of only those that had sat on his knee!! hmm

I was born after he died, and when the trust matured on my brothers 18th birthday, he split the money with me! grin out of kindness. I think my parents had spoken to him about it, but it really was his decision - So my brother lost out on my behalf.

I would have understood if he had not split the money with me, it was his!

My cousins however did not; they were not approached. It was seen that each side of the family was separate when it comes down to money.

I think that it is unfair- but thats life i am afraid. I think that each family should accept this, i would not split the money outside your own children.

She may have thought about this in her will- when writing one this is the sort of question that she would have been asked; perhaps she didnt want to spilt the money or she would have stated - "money goes towards current and future children of freebox" and "current and future children of freebox sis/bro"

It is a difficult situation, but in reality the money belongs to your children not you so it is down to them.

PS my great grandfather also only left money to the males in the family, not even his own daughter and sister! The family sorted this out but a Will is a Will, so things have to be split how the person wanted it, not how everyone else wants

freebox Thu 05-Nov-09 14:14:05

I have only invested my DC's share for 7 years, not everyone's.

Interesting that the vast majority of you thinks I should keep it for my 2 DC. DH agrees - says that in the reverse situation it wouldn't cross his mind that his kids were owed a share. I hadn't really thought of it like that TBH.

paisleyleaf Thu 05-Nov-09 14:19:55

If I were your sister I wouldn't expect you to split the money with my children (who didn't know the relative). But I understand where you're coming from, and it's very kind of you.
Having the money towards university fees (or travel etc) frees you up to help out your DC3 yourself with these things - so it's not so unfair on your youngest.

twolittlekings Thu 05-Nov-09 14:27:02

Hello Freebox,

It is difficult to know what to do - are you very close to your siblings? If you are I suppose it makes it harder but then again they were also left money and they could have invested it and be sitting on a small fortune now and you may not even know it!! If you then give their kids some of the money left to your kids you might end up worse off.

Depending on how much it is you could do a deed of variation as suggested by clean and clothed - you would need to set up trustees and you would only be allowed to draw out so much per year without paying tax. Depending on how much the initial amount is and if it is invested wisely for a period of time before accessing it could accumulate quite a bit.

Only you can make the decision that feels right for you - sorry that is not much help is it? IMO though I would be inclined to leave it for a while and see how things pan out

AvengingGerbil Thu 05-Nov-09 15:33:20

Freebox, I think you should post this on legal to see if any of the lawyers over there have a view.

GuyFawkesIsMyLoveSlave Thu 05-Nov-09 15:57:20

freebox, I think you need legal advice even if only informally from a solicitor on MN. I vaguely think (although it's been nearly twenty years since I studied trust law and I wasn't very good at it even then) that if the money was left specifically to your DCs then it is actually in trust even if you haven't realised that it's in trust. And what you can do with it is then very limited (and doesn't include distributing your DCs' money among other people). I'm not sure how easy it is to draw up a deed of variation if some of the beneficiaries are/were minors.

Check what the will actually said, but if the money was left to your DCs then that was done in the knowledge that you and/or your siblings could have more children in future, so your relative presumably made a conscious decision to do it the way that he/she did.

snorkie Thu 05-Nov-09 17:19:07

I think a deed of variation has to be done within 2 years (so too late now), and it also needs the consent of all beneficiaries, so it may not even be possible with minors.

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