Wills - second wife - what's fair?

[BarrelOfOtters]

Our wills need updated as we bought a house together. Both have life insurance in place to pay off mortgage if anything happened to one of us.

We've been married years, he has 2 kids in their 20s - I don't have kids. We are in our 50s. We both have savings of about £300k each in various forms.

I originally didn't want him to leave the house in trust to me as I didn't want the kids hanging about for their share of the inheritance. Also practically I'd downsize if anything happened to him.

But I'm now starting to think that might be the best way to do it.

The alternative was that I bought the kids out of the house so they get their inheritance - but I can't really afford to do that. Though I suppose we could do it in proportion to how much I put into the house

He's thinking the trust route is the best way to go.

What would be fair?

I think actually that would be too hard and I should just accept that I've had the benefit of living there for that portion of my money and that it will go to the his children.

In that case, you’d better be planning for your DP to die before you and you having to run around to find somewhere to live when you are in your 80s. Maybe doing that on all on your own (depending on where your nieces and nephews live and their availability etc….).

Please remember that if you hadn’t moved in with him, you’d have a house that would be safe for you in old age.
You might be benefitting now from a bigger house. But you also made a big sacrifice to be able to live together (to your and HIS benefit).

Which then means, what will you do to protect yourself from ending up with nowhere to live when he dies?

Haha same

@VillageOnSmile good points well made.

I probably need to stop wondering what is fair for them and more about what is fair for me.

Me too

We need an lol on MN

This is very risky. If OP inherits all from her husband, what is to stop her from writing in her own will that she wants to leave everything to (not her stepchildren)? Offspring should inherit from the parent.

I think that morally the children should inherit once their parent dies. It’s not their fault that parent has remarried. Why should they wait another few decades?
Any other inheritance is irrelevant.

Apologies I thought this was about William and his future second wife Rose H.

maybe you should see a financial adviser. I may be wrong here, but if he leaves anything to the kids I think they will pay inheritance tax whereas you won’t. I am leaving everything to my husband on the understanding that as soon as emotionally practical our home will be split 50/50 with my half being given to my children.

Why not have another life insurance policy that pays the kids the equivelant of half of the value of the house when he passes. So he leaves the house to you but the beneficiaries of the policy are the kids.

Probably missed a vital reason why this is not doable but seems the simplest solution to me.

I realise that the maths wont be quite so simple but it gives the kids their inheritance and keeps the OP in the home that she has paid at least 50% of the cost for. Like I say, probably missing something which is why I would consult an IFA to get the best advice.

I think this really should be the general principle. Not implying that OP wouldn't do right by these particular DC.

But there is nothing in law to stop the money inherited through a second-marriage partner from being donated to charity; completely spent up; lost in a scam or poor investment or completely spent on the partner's future care fees.

Or as a PP has said, the second partner could remarry, die first and their new partner's children inherit all. Leaving the DC of the parent who originally earned/owned the money/assets with nothing.

This affects so many families today. I would like to see a change in the law or clear government guidance on the various options.

Even when original families stay together, there are situations where the DC end up with no inheritance at all from either parent. One parent in the marriage dies first (perhaps suddenly or short illness with no care fees). The other parent automatically inherits all, but eventually needs care. So effectively two lifetimes worth of earnings/saving/assets (bar around £14,000) are then ring-fenced for the care of one person.

It's confusing in the UK how our finances are treated on an individual basis for some things and as a household for others.

I think it's done differently in some European countries, including inheritance, but not sure how.

Own the property tenants in common (can be changed to that if currently owned as joint tenants) with the respective share of the property each. Wills that state your share to be neice & nephew and his to his kids both with lifetime interest to allow survivor to remain in the property until death if they wish.

Re: life insurance. Its a possibility to do this, and op could get a policy out as life of another but it could be cost prohibitive.

Surely the fairest thing is for your wills to deal with the dc and nephews and nieces after both of your deaths.
Why should a long time married partner have to not only go through the death of a spouse but then deal with a potential huge change in their lifestyle.

I think you need legal advice.

You need to change the house to tenants in common if you haven't already otherwise the house will become entirely yours after his death regardless of wills or trusts.

Then he can leave his half in trust to you. Maybe not a lifetime trust but you could say a year or 5 years or similar or he can leave his half to his kids and you can use your half to downsize.

Other options.
Downsize now to two smaller properties with each of you owning one. Live together in one, rent out the other one then you move into the other one once he dies or if you go first then second property is willed to your family.

Becoming landlords is quite a complex solution to something that boils down to should, if he dies first, I have to sell the house in order to give the kids their portion of inheritance immediately or carry on as I am and they get that portion when I die.

the first is neater and fairer to them, the second is fairer to me who will hopefully, have been married to him for 40 odd years by then and in my 80s.

Apologies to anyone openin* this wanting a rant about another Kategate thread.

also maybe we need a will for now with the stage the kids are at for the next 10 years and one later when they are more established….

From the sounds of it if your husband dies his children will immediately inherit £300,000. That's a substantial amount for most people. I don't see what's wrong with them waiting for any money from his half of your house until you die.

There isn't a universal best or fairest answer to this.

It's unlikely that there will be enough in the pot to protect the surviving partner's standard of living and at the same time to give the children some cash now. Ultimately it's up to the person making the will to decide which of those is more important to them, or if they're both important, how far one should be compromised to enable the other.

OP you need to get really clear on what your priorities are first, and then the right answer for you will become apparent. If you tackle it from the other end by looking at all the options, each one will have a huge downside to it and you won't want any of them.

Think about what would happen if you were in your 80s when you dh dies. It wouldn't be fair on you to be forced into a move at that stage. A lifetime interest in his half would allow you to move/downsize if you chose to/capable of to release capital.

I would suggest he gives them the £300k now to get them on the property ladder and then leaves you a life interest in the house. They probably wont mind waiting if they have been able to buy property when they needed the most help financially.

OP does it help to substitute 'reasonable in the circumstances' for 'fair'? Unless you are mega rich you are unlikely to be able to do better than that.

I think your point about changing wills as time moves on is also really important. If you're trying to make a will now that's fair (which is difficult to define) now, and also in an unpredictable future, you're setting yourself up for failure.

I think this is probably the right approach. It's too difficult to foresee what your situation will be in 20 years time.
At the moment you both need to make sure you have a stable home and enough money to live off should your DH die suddenly, so that probably means leaving the bulk of his estate to you.

But imagine if you're elderly, your health is failing and you're going to need a care home in the not too distant further? At that stage it would probably make more sense that his half of the house went to his children.

i would take the house out of the kids inheritance entirely. It’s to messy and it’s not fair to you. The whole point of marriage is commitment and security for eachother.

his money /pension /whatever goes to his kids and yours goes to your nephew or whoever else but the house goes to eachother.

Otherwise are you partners or are you just roommates really?

Me too!