Inheritance to grandchildren bypassing children

Are a grandchild hoping it skips a generation?

The money you wanted to give as a house deposit would only be possible if you get the inheritance, so it's their money being passed on anyway.

Skipping a generation helps avoid inheritance tax later.

Also, sometimes grandparents like to show their love for their grandchildren this way. I know many (including my mother) who did this.

I genuinely think it's entirely their choice.

Strikes me that OP is being particularly unreasonable to worry about the possibility of the money being lost to divorce but not remarriage.

Hardly unknown for people who've been widowed to marry again and end up leaving all their estate to the new partner. Perhaps PILs are worried that anything left to their DC might end up passing to a new spouse who sees no reason to give their GC any money.

But if they piss it up the wall at 20 ... So what? It's their money. They're adults. They live with the consequences of it.
Just because someone is 35 doesn't mean they won't "waste" it. I know people would have gambled their inheritance away etc

It is up to them how they spend it, even if you don't think it's the best idea.

If someone giving money wants it to be spent on something in particular, then they must put conditions in it in the will etc.

I agree it should go to the two brothers. What they do with it is up to them. Have in in laws said why they're skipping a generation? Did it happen to them?

I would not skip a generation entirely, but I would certainly split my money between my children and grandchildren. It is quite straight forward to add in an age clause so the grandchildren do not get the money for a while (It can remain invested until this point). Otherwise there is a risk that the cash sits with the parents for a good period of time and given increased life span, grandchildren may wait a good time to get their hands on any money. There is also the risk that on remarriage the money we would like to see going to grandchildren finishes up elsewhere.

All these people who are wanting their parents money is shocking. And pretending like it's about trust and parents not thinking they're capable

Greedy greedy people.

Why not?

They're not all idiots

So then you agree that it's better that it's left to you and not directly to grandkids?

A colleague’s children were left very substantial amounts of money by an estranged grandfather, in trust until they were 25.

But goodness, the colossal time and cost to wind the trust up! The solicitors really milked it for all it was worth - so much back and forth with emails, phone calls, big fat charges for everything when it should have been quite straightforward, no unusual circumstances.

TBH their experience has put me right off trusts, not that I was contemplating such a thing anyway.

I haven't read all the responses but I agree!! I haven't been able to articulate these thoughts as well as you and while the nuance about my own conflicting feelings about this may be slightly different.. I feel the same!

Treat your children with unconditional love and trust! Bypassing your children feels like saying they do not deserve your money and you do not trust them to take care of their own children.. that somehow your children have been a bit of a disappointment but there is still hope for the grandchildren.

Will you not inherit from your parents?

My DM is doing the same, direct to DGC’s. She wants to ensure that her money goes to her DGC, where she intends.

Poor relationships within our family and lack of trust mean that by leaving it to her DC’s some of the DGC may get nothing.

Surely it’s better to inherit money in your twenties to set you up. Having a small mortgage from the start, for example, will give you greater wealth over the course of your life.

I’ve always thought inheriting large sums when you’re in your sixties is a waste as you’ve already lived most of your life.

Jesus wept. Be grateful. They are dividing it equally between grandchildren. You have more children so that explains it. Each child gets the same amount, literally the epitome of fair.

But each grandchild will be getting the same amount! It’s being divided 5 ways, so not sure why you’re looking at it that your DCs will be getting more!

I do think it would be better to put most of the money in trust until GC turn 25. I feel a bit torn as I got inheritance that really I would have benefited from much smaller gifts when we was starting out. But I have also seen inheritance skip children and go to GC who are at uni completely pissed up the wall.

I presume the deceased might feel galled to know that a lifetime of inherited wealth was spent in three years with no car, deposit or any asset to show for it

Ditto for most of my friends and family. One friend however is being placed under pressure to bypass her children and leave everything split equally among the grandchildren, it's 'only fair' according to one of her children. However she has three children and their families are 5 children, 2 children and no children, guess which of her children is pressing her to leave just to her grandchildren!

There's no one right answer here, everyone's circumstances are different. In our case my husband's grandparents are skipping a generation so he, his siblings and cousins will inherit and their parents will not. This was done for various reasons:

1. My husband's mother is an awful troublemaker who has caused many family problems and would cause more no matter how any will were to be split between her and her brother. Effectively cutting her out without actually doing so seemed to the grandparents the only way to shut this down.
2. My MIL and her brother are in their sixties. Comfortable enough but not rich. The inheritance would have given them a luxurious retirement but without it they have everything they need if not everything they want. The grandchildren are all in their 30s/40s with children of their own and arguably need the money more at a practical level.
3. The above means that skipping a generation avoids the grandparents' money paying IHT twice and it's less likely to be spent on care homes.

In my husband's family it all makes sense.

In my family my parents have mostly already disposed of their money between my brother and me, which again avoids IHT and care home fees. I got far more than my brother but that's because I'm taking care of them. He's no help whatsoever and it's going to get a lot worse for me over the next few years due to their health problems. It's not so much the case that I deserve it more but that it allows me to adjust my lifestyle to do this, which I couldn't without the help of that money. My brother is absolutely fine with this, admits he would have blown any money he received by snorting it through a rolled up note, he's had more from my parents in the past and to be honest, my mother ends up giving him a significant proportion of her hefty pension every month anyway because he's so shit at running his life. Depending how long she lasts he'll probably have caught up with my share before she dies anyway. We're both fine with all of that.

These arrangements work for us and everyone except my MIL is happy with them (but nothing else would make her happy either, that's just her). However I could see a number of obstacles - if my husband, his siblings and cousins were much younger for example and might not be mature enough to handle the money. If my MIL and her brother were struggling and really needed the inheritance to live on.

There are too many details in people's lives to be able to say any one system works for everyone. What your in laws have arranged sounds like quite a good idea to me but that doesn't matter because neither you nor I get to decide how they arrange their inheritance. If your BIL would really struggle without it then it's up to him to discuss it with his parents and see if they want to arrange things differently. Your husband could also do that but if you, @mucky123, bring it up it's not going to look good.

I would love for a fairy godmother to appear and bestow my daughter and her cousins with something they will help them in life whether that's to get a home or piss about traveling for a year. It's the fucking dream.

Plainly, anybody who thinks they have any say whatsoever in how another person gives away their assets is unreasonable.

There is no "should". Its theirs to do with what they like.

It isn't unfair either. Your husband and his brother don't factor in at all, so it less to your BILs family, it is equally distributed amongst 5 individuals who have relationships in their own right with their grandparents.

This happened to my friend but it wasn’t the parent who seemingly made the decision, it was her estranged brother and his act of revenge convincing his mother to leave everything to the grandkids - it was a desperately upsetting situation not only because my friend felt the sting of parental rejection but the genuine concern that her ds was incapable of holding onto money - he’s an enormously generous kids but my god can he spend on absolute shite - there will be nothing left and there was nothing she could do to change that.

Looking on the bright side, you can spend all your money on yourselves and not have to worry about gifting your kids. Enjoy!

This is actually normal in both DHs family and mine, I think it because the grandparents live quite a long time, so passing an inheritance to someone in their 60s versus in their 30s - obviously it is a much bigger help to the person in their 30s. We're all better off longer term as it allows me much better mortgage rates, for example.

The idea you want to give them things and someone else doing so ruins this for you is very childish and contradictory when you are also suggesting they'd be ruined by getting money (okay if from you). Especially if you would be giving money you inherited, a whole dollop of extra tax for your ego.

It's nice of them, they obviously think you are doing well both for yourselves and bringing you DCs up to be sensible around money. It's also, obviously, not your place to interfere or try to change their mind, especially not when you want to change it to you getting more money.

FIL's will was that the estate should be divided equally between his sons and that each grandchild would get a fixed sum. Fortunately by the time he died the DGC were old enough not to spend it on sweets and he was wise enough to add it as a codicile so could be updated.