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Inheritance and step children, help

(38 Posts)
pmgkt Mon 14-Apr-14 15:43:27

I'm throwing this open for a bit of a debate and also to see what others do or would do in my set up.

I have married to dh and we have 2 children together aged 1&3. I have two step children aged 10&14. We did our wills a while ago and I am 100% happy with what we decided to do, ie whatever me and dh have split equally amongst the 4 children with no difference who dies first, or ages etc. very straight forward. Anyway me mum questioned the other day if I was happy with her money going to the step children and it got me thinking. My dh's parents inheritance will obviously eventually go to them as it will come to us then pass on, they will also inherit from their mums parents who are comparibly well off as my parents. So it does seem a little unfair that they then inherit from a third set of grandparents and our joint children will only inherit from 2 sets of which then part will be split with the step children. The step children and my mum do see each other, shared holidays once a year and do get birthday and Christmas presents, Easter eggs etc, so in general day to day ways she treats them all the same although obviously sees more of my children as the step children aren't always here.

So what do others do with wills and step children?

My idea was to buy an investment property with the lump sum from my mum as a deposit, mortgage for remaining money needed.put this house in trust for my two children. The rent would come into the family money, so either be saved, spent on a better family house or for extras day to day. Therefore that money would be enjoyed by all the children, added to our estate and split as per our will of equally splitting among all 4 kids. The rental house would then tick along until I died and it would then be split between my two children instead.

I think this sounds fair to all, as everyone on all sides owns their own property so everyone would benefit from property increases. I am not buying a house for my children, it will very much remain mine until I die, and that extra money would be used to help any of the kids through uni, help with cars or house deposits etc

Any thoughts

Ratbagcatbag Thu 24-Apr-14 14:26:45

I have one dd, age 1yo and a dss aged 15. Everything we have is split z50/50 between them. Only difference is, until my dd is 18 I'd want my death in service payment (around 100k to be used for her upbringing) if I/we die after that its a straight split.

My mum has bugger all to leave, dh parents out there house in trust years ago for my dh and his sister so even in the event of care homes it cannot be touched and its all left to them both.

Hayfreever Sun 20-Apr-14 14:54:31

Notsoskinny I have a very similar family setup to you. I have 2 dcs, dh has 3. Exw had affair, he signed house over to her as she insisted kids needed to stay, then put house on market the next day. Dh continued to pay all school fees (which I can understand as they are his kids and were not at fault).

Difference is I only have a small amount to put towards new house, dh is more or less buying it and paying mortgage. Will you both be paying the mortgage if you have one, and had you not funded the deposit, how do you think you would have dealt with things then?

Notsoskinnyminny Sun 20-Apr-14 11:50:56

DH signed marital home to exW and continued to pay school fees for DSCs even though she was the guilty party. Deposit on our house was paid with equity from my previous house so we've agreed that the first 30% or £150k will be shared equally between my 2 DCs and the remainder will be split with 50% shared between my DCs and the other 50% shared between his 3 DCs who will inherit the previous marital home from their DM. DCs can decide what to give to any future grandchildren. My family jewellery will be passed to DDs future DD on her 21st birthday as requested by my GM when I received it.

Ludways Tue 15-Apr-14 20:19:02

I have two which are mine and dh's, he has an older child with exw. Estate is halved, my half goes between my two and his half goes between the 3. I don't begrudge my stepdd but she will get all of her mother estate therefore more than my two iyswim. Plus our money will likely be mostly from my parents and my DSis who has stated her will is in my favour as she has no dc's.

Cabrinha Tue 15-Apr-14 20:08:01

I have one child, my boyfriend has one. He's not (yet?) my husband.
As it stands currently, I have more assets. He will probably have more once his parents die (obviously variables there on whether it all goes to Battersea Dogs Home, etc!) but once I retire (again, variables like me not getting made redundant) I'll probably have more assets again.

I would expect each of our children to inherit directly from us, with only joint assets split 50/50.

If it appears that I have a lot more assets, I would leave a substantial amount to my stepson too. But the majority will go to my own child.

pmgkt Mon 14-Apr-14 22:54:24

Near the windy I am executor for my mums will and as such we have talked about what it says. As I said up post she has an aggressive firm of cancer so while it is morbid it is also reality and needs discussing. Her husband is also very ill but with dementia and so they have had serious legal advice re wills estates and nursing home fees etc. another reason not to leave it to him and let the nursing home take it all

I have spoken to my husband and we are looking for solutions to the issue hence posting for suggestions of what others have done.

alita7 Mon 14-Apr-14 21:16:27

Hmm this is a good point. I'm hopefully years away from having to deal with this but even so... DP has 3 girls. I am currently pregnant with my first, his 4th. I have no idea if there will be any inheritance at all by the time its a question- we don't own a house, my grandparents and parents do, his parents do but are in lots of debt and his grandparents have already passed. I don't know about his kids mothers families (dsd 1 and 2 have one mother and dsd 3 has another) My dad is an only child so I will most likely inherit something from his parents but I doubt I will from my mums. So anyway. If I inherit things, it is likely it will be used towards house deposits or something. I think it is more likely that he will inherit debt than money from his parents (is this possible?). But anyway, I know my family, who see DSD 3 sometimes as she lives with us but don't see the others very often, wouldn't be very happy if their money went to them and not completely to my kids. So I will have a big dilema too- it is true that if we are fair on our side, that my kids will loose out as the others will potentially get money from 2 angles.

The other option I can think of is to make your own kids a special trust fund of their own starting now. It could bridge the gap- as if you put say £5 a month in until they are 18, your kids will end up with more overall as they are younger.

NearTheWindymill Mon 14-Apr-14 20:49:19

You need proper legal advice and you need to discuss this with your husband. Why are you assuming that your mother will leave her money to you? She might leave it all to her husband who might leave it all to his children and not yours. hmm

I have to say if I were your mum I'd be leaving the money in trust to the blood children in the relationship on the basis that the step children woudl be looked after by their blood grandparents.

Conversely if anything were to happen to DH and I met someone else I would take out of our resources what I needed and everything else would be put in trust for our DC and I'd expect my new partner to do the same. If my new partner wanted dibs on anything else, then I'd think twice. I'd care for his children and I'd never see anyone homeless or hungry but I wouldn't be splitting the money my DH and I made together beyond our blood. Anything made by me and a new partner would obviously go on an equal all way split.

If, say, I married 2nd time, a multi-millionaire I wouldn't expect those millions to be shared around my DC or me particularly. If a pauper married me then I'd expect my capital to be ringfenced to my DC except for what housed us.

I hope you get what I mean.

pmgkt Mon 14-Apr-14 20:31:46

Thanks. I hadn't really got as far as thinking about inheritance tax as we aren't in that bracket yet, I was hoping that by naming me kids on the investment property that would eliminate all or part of that as although I would own it, the non mortgage element would have been gifted to them by me. I'm hoping that there will be a huge gap between my mum dying and me (given her health condition) so even as a gift it will be exempt, but def need legal advice on the technicality

unlucky83 Mon 14-Apr-14 20:24:04

I'm not married and we had our wills draw up by a solicitor. No step children etc...but with regards to making sure your children get 'family' money...
I've inherited money - I didn't want that money to go anywhere but to my DCs (eg if DP remarried to someone with DC and he died the money would go to his new wife - when she died it would go to her children - mine could lose out) - luckily DP has earned money ...we have about the same amount each.
If we both die it goes straight to DCs (in trust till they are 18)
If either DP or I die when the DCs reach 25 the survivor has to give them their share of the inherited amount actual amount - that doesn't take into account interest accrued etc but means the capital can only go to them ...(we would have to sell one house - unless we just transfer to DCs).
It also sounds like you need to think about inheritance tax you might need a solicitor and /or financial advice. It might make more sense for your DM to leave her money straight to your DCs. If she is in inheritance tax bracket and you inherit, along with your personal wealth you might end up paying inheritance tax on the same money again when you die ...

pmgkt Mon 14-Apr-14 19:51:01

LtEve I like that idea. It is simple to administer at anytime although doesn't cover the remarry scenario but I'm not sure what could. Part of my problem is that if you mix it all together you lose track of what's what and so having the separate house seemed logical but your idea could be a happy solution if it did get combined for a house or similar

swissfamily Mon 14-Apr-14 19:43:06

My father-in-law's father died suddenly when my FIL was 5 and his sister was 3. His father left a large house. My father-in-law's mother then remarried and had another three children. Her new husband fancied himself as a property developer and the large house was sold to fund his projects. These all failed and the capital from the large house, that should have been my father-in-law's and his sister's inheritance was lost, to a new husband. It still causes massive family rows now.

It makes sense to get this stuff sorted in a timely manner I think. And to be honest with all parties about what has been sorted.

RufusTheReindeer Mon 14-Apr-14 19:27:17

Shit, should be shock

RufusTheReindeer Mon 14-Apr-14 19:26:25


My brother is pissed off at the situation

I think I would be angry if she changed her will with my father dead as that's not what he wanted

Hadn't really thought about if she remarried but I suppose by the loci they are using they would have to have wills splitting the estate between her two kids, my dad's two and her new partners children

Good god this could go on for ever [shocked]

I'm hoping they spend all their money before then die!

clam Mon 14-Apr-14 19:06:44

I know of a family where the father remarried, and then subsequently died, with all his assets ending up with his stepchildren. His biological children (all adults) asked if they might have one or two keepsakes still in the house from their grandparents' day (and no link to the step-siblings at all) and they were refused!

Solicitors have seen it all before.

LtEveDallas Mon 14-Apr-14 19:00:33

DH and I have assets that are split 50/50 between the two of us. We have agreed that any inheritance from his mother goes to both of us, any inheritance from my mother goes to both of us, all equal shares.

If the worst happens and both of us were to die early, then all our assets would be used to bring up DD (in the care of SIL).
DH's 50% will be split between DD and DSD
My 50% will go directly to DD

So essentially DD will get 75%, DSD will get 25%, but of course DSD will also get 100% of her mothers assets too.

pmgkt Mon 14-Apr-14 18:45:50

Rufus both my parents are also remarried but have dealt with it in the total opposite way, own estates going to own children. But then each person owns their own house and is on a fairly level footing.

Can I just ask how you would feel, as the pp said, if your dad died and then she either remarried or change her will?

pmgkt Mon 14-Apr-14 18:41:27

Thank you everyone.

RufusTheReindeer Mon 14-Apr-14 18:39:06

My father has remarried

He brought money into the relationship (following the death of my mother) she brought nothing

If he dies all the money goes to her, technically when she dies she will split her will in four for her two children and my fathers two children. The same if she goes first

Either way her children "win" and we "lose"

That seems fair enough to me as they are now married and share everything equally.

Philoslothy Mon 14-Apr-14 18:27:42

I have five children of my own and a stepson.

As a couple we bought DHs former marital home for his ex wife and son to live in. My stepson will be the sole heir to this house, as he would have been if they had remained married - unless they had more children of course.

His ex wife has just remarried and the property has been signed over to my stepson in order to prevent it being lost to him.

Our home will be split between our other children. It is a bigger house and therefore although not quite big enough to give an equal amount as my stepson will get.

We also have a rental property which will be divided between all of the children equally - if we should have it as well as money from various policies.

My stepson will get more, however my biological children have been raised in one home by their mother and father so I feel no sense of loss on their behalf.

brdgrl Mon 14-Apr-14 18:27:30

If we had anything to worry about leaving, we'd do it swissfamily's way - bulk of my assets to my DD alone; bulk of DH's assets divided between the 3 children (my/his DD; his two kids). I have one child to provide for; he has three.

I'd leave something for the DSC, but a modest gift...Obviously though it would all depend on the size of my imaginary fortune!

My DSC have already inherited from their mum (who left nothing for my & DH's DD) and from their paternal grandparents (ditto). I don't feel any compulsion to provide additional resources for them once they are adults.

I provide for them now, and if DH went before me I would continue to be the provider for the minor children.

pmgkt Mon 14-Apr-14 18:20:33

Thanks Swiss. I also have my pre dh house, but as I moved a few hundred miles away from where I was to move in with him, it's a real pain keeping it, and I'm thinking if selling in and investing that money into his house by doing an extension with the capital. I had thought about just paying that mortgage off with any lump but the location of it just makes it awkward

pmgkt Mon 14-Apr-14 18:10:15

Thanks clam. I will need to do that and draw any trusts etc. It would be great to have a few thoughts in my head first so that it's not too overwhelming at the meeting. This was just one thought in my head, open to other ideas

swissfamily Mon 14-Apr-14 17:57:31

Actually our wills are made out so that what's mine is divided between my three children (all with DH) and what's ours / DH's is divided between all four of his children (the three we have together and my DSD).

I don't want my DSD to inherit from money / investments I had prior to meeting DH. Nor would I expect DSD to inherit from my parents.

I have property in my name that I owned before I met DH and that will only benefit my DC.

clam Mon 14-Apr-14 17:51:55

Why don't you go and see a solicitor about this? It's a very common issue, particularly nowadays. My parents have sewn up their affairs very specifically due to an awkward "step" situation on my brother's side. I'm not sure of the details though, (as I'm not counting on a windfall - it's all highly likely to go towards their care and comfort in the future, and rightly so) but the solicitor had lots of possibilities up his sleeve.

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