wills, step children, houses - what's fair?

[BarkingUpTheWrongRoseBush]

We've moved house and need to re do our wills.

DH and I married and together 15 years. His kids are 23 and 24. I don't have kids. Both his kids back from uni living with their mum. All on good terms with each other.

We are both mid 50s.

We live in a house where the mortgage will be paid off in 8 years. He put the deposit in - £300k. We are splitting the mortgage - so paying off £125K each. We are also renovating the house and paying in a 70/30 split - total is about £200k of renovations. I'm paying the lower split.

I own a house I let out worth approximately 180K.

We've both got life insurance that would pay off the remainder of the mortgage.

I really don't want to move out if he pops his clogs - but equally I don't want to be sitting in trust with his kids waiting for me to pop my clogs.

What's fair.

Does he leave the house to me and everything else to the kids?

Does he stipulate that I buy the kids out of a proportion of the house?

What does he think is fair?

Would you be able to afford to buy the kids out of their proportion of the house?

Remember if you sell the house you are renting out you would have to pay capital gains tax.

Plus you gave no indication if the houses are worth nearly equal values.

@RedMarauder

Would you be able to afford to buy the kids out of their proportion of the house?

Remember if you sell the house you are renting out you would have to pay capital gains tax.

Plus you gave no indication if the houses are worth nearly equal values.

I think the op shows that the house she rents out is worth a lot less than the one they own together

I think you need to ask yourself where you would want to live if he died before you. Would you want to live in the house you have shared and renovated together or would you want somewhere new. Would you sell up, buy somewhere smaller and make a gift to the children, maybe by repaying his initial deposit. I think either is a perfectly reasonable outcome, but it would depend on what you wanted to do.

Does their mother own her own house, will that be left to them. How independent and self funding are they?

You also need to think about who will be your beneficiaries when you die, obviously your OH if you die first, but if he dies first who is in your will. If it is the stepchildren then that makes it simpler! If you have other family members like nephews and nieces who you want to benefit from a legacy then you need to make that clear too .

Always remember that you might have to fund two care packages from your properties, that could leave a huge dent in their residual value.

It is a complicated situation, but realistically , both you and your OH need to put your own financial, and possible care needs first. It’s going to be a long conversation.

My DH and I spent many hours thinking this sort of thing over.
We also have a young child though which actually made it easier. His will leaves me everything. If I live longer I would plan to roughly split our assets so that what proportion is considered mine goes 100% to DD and what is his goes three ways to each of the children. DD does get more but older kids have another parent too. There's nothing in trust etc. This depends on what assets remain at the end of our lives.
I would make arrangements for the children in the unlikely event I remarried. But to be honest I doubt very much I would marry again.

The house we are in now and are doing up...I want to live there with him but it's unlikely I'd want to stay there forever on my own without him.

Realistically I'd want to sell up at some point and downsize. But not immediately.

part of the reason this has come up now is that our old will was based very much on the fact we didn't own a house together. I lived in his house and would have bought the kids out of it. But this house is more expensive, is worth more, and we both own it.

what does he think is fair? he wouldn't want to see me homeless but equally wouldn't want his kids to inherit if he pops his clogs.

This will I think get easier as we get older!

What if his kids get his share of the house but you have a life interest (I think it's called, I may be wrong) and when you pass it is sold, their portion goes to them and your portion to whoever you have named.

A life interest in the place you own together sounds fairest.

My DF and his DP each have a life interest in the other’s share of their house in their wills. It’s never occurred to me to view it as waiting around for my inheritance if DF dies first.

I hate life interests, and I would never do one. It’s ok if you’re older and living out your last years but if you’re still young and want to live your life you’re seriously limited to what you can do and not in full control of your main asset (house). Me and my husband have mirror wills and leaving everything to each other. I know a lot of people don’t like them but we want the survivor to have full control of the estate and do what they see fit. It’s our money what we’ve built up at the end of the day and if the survivor wants to move house or even sell up and move abroad I’d never want them to be restricted.

My friends have this situation
She has two children in their late twenties
He had none

The will states if she dies 50% of the value of the house would be the kids but only when sold and my friend can stay there as long as.

Always a difficult one when you marry someone with children.
Lots of things to consider which a good solicitor can help with when you make wills but the most important thing is for you both to sit down and talk to each other and say what is on your mind.

I am in a similar position and we have made wills out stipulating what we want to happen should one of us die first, protecting the other from financial ruin/homelessness.
As time has passed the wills need tweaking because circumstances have altered slightly. I am a worrier by nature and the wills are a comfort to me knowing I will not be penalised by a death or have to sell my house.

Dh would be happy to put his share of the house in trust, it’s me who doesn’t want his kids feeling like they’ve got to wait for me to pop my clogs.

I also want to make sure I’m not tied to this property. And also circumstances do change. We are both fit and healthy and not that old. If one of us dies the other one would very likely get into another relationship.

In a few years that may change…aah it’s making my head ache. It was much easier writing it last time.

And yes I have nephews and neices I want to leave some money to.

My husband has one now adult child. I have none. We own our house 50% each as tenants in common (think that’s what it is). If husband dies before me his 50% share will go to his son but only at the point I decide to sell the property to downsize or maybe go into a care home. I guess there’s also the fact that if I end up in a care home then only my 50% share from the house sale can be used. Step-son’s 50% will be protected.

If I die before husband then I’ve just left everything to him. I am closer to my step son than my nieces and nephews so only seems right everything gets passed down to him via my husband. Also I effectively retired very early due to cancer treatment and husband supports me now so also feels fair to me that my full estate should go directly to him. My nieces and nephews have wealthy parents. They don’t need anything extra from me.

Also my husband has stated in his will that his savings/investments are to be split 50/50 between me and step-son. I am fine with this. I also have savings in my sole name.

You can have a “porting” clause written into the will so if husband died first and then I later decided to move I could “port” all the funds to buy a new property and step-son would have to wait until I die or go into care to get his share. But I decided not to bother with that and just kept it simple. At the point at which the house we live in now is sold, should husband die before me, step-son will get husband’s 50% share..

I don’t have children and we own our home outright in different shares as joint tenants. My partner’s will allows for me to have a life interest in the value of the home but I can move as many times as I want (the estate will pay costs for the first move).

It took much arguing of hypothetical scenarios of how my life might pan out if he were to die first for us to come up with this agreement.

If I die first, he gets everything of mine with no conditions!

[I know he has to do the right thing for his children but, to be honest, it pisses me off that I can’t be trusted to do that]

Sorry, tenants in common not joint tenants - brain hasn’t kicked in yet 😳

It's a minefield - I'm kind of in the same position, but further back down the line. I don't live with mine, but we're hoping to eventually. I have nephews, nieces, godchildren etc who have been in my life a lot longer than my boyfriend's children, and who won't inherit a lot from family. My family don't do longevity, whereas his do, so if he died the same age as his grandparents, my eldest niece might not get her share of my interest in a house until she's 70. I was thinking leave him my share of the house and leave the kids (my beneficiaries and his two) the pension and any life insurance split between them. It's a lot to think about, and lots of possible outcomes to consider.