When is an inheritance "enough"?

[Wardrobefred]

Somehow, from really quite modest beginning our family has accumulated quite a lot. Ordinary jobs (no one has ever been a higher rate tax payer for example) but sensible spending/saving and investment (and property tbf) means that my last surviving parent has just left c. £2m (after inheritance tax), split between me and DSis.

I don't need or want it. I own my home outright, have a decent income and pensions that will be plenty for me, substantial savings. My life is not flamboyant, but I have want I need/want, travel a lot and can't think of any major changes I'd make with the money.

So, I'm thinking this money should go directly to my DC, early 20s and living at home. Obviously it's life changing for them. Neither have launched very well. Both work, but not particularly applying themselves to career progression or qualifications. There's a part of me that thinks this windfall won't be entirely helpful for their overall life and happiness.

Because of DC I've always been determined I won't remarry, to protect their inheritance. However, I'm now coming to the view that they don't need it!

I have a lovely DP who I've been with 8 years, never lived together and our life is good, but maybe it's time I thought about doing what I want (I've said I don't want to live with him because I enjoy my independence, but it's definitely fuelled by protecting my DC) and maybe it's time to consider changing my will so that the man who's made my life so good over the last few years inherits something.

He brings a lot to the realtionship, but not money (supports himself, doesn't cost me anything currently, but doesn't have savings or assets). If we did live together, I wouldn't want him homeless in the event of my death, even if he did bring it on himself by not being better at financial planning! I know you can leave a life interest, but where I've seen that happen it seems to bring nothing but trouble, as the DC want their money asap...

Also, I don't think my DC "deserve" it more than he does. I love them dearly, they're good kids and want to see them OK, but £500k each is enough without having worked for it?

I guess it's a good problem to have but there's definitely part of me that thinks this money could do more harm than good.

I'd put hefty deposits down for the kids, so they had a small mortgage each to pay. House prices will only go up so it is an investment and there is nothing more important than a home of your own.
Leave the rest in savings.
Change your will to include your DP, stipulate an amount from the sale of your home etc if you want. But the majority should go to your children.

I do want most of it to benefit my children. I'm just wondering if £500k plus whatever cash I have at my death (significant currently) is "enough" and maybe I don't need to be so hung up on protecting my house for them.

I don't know where you live as that makes a difference to how far money goes. What about giving them your house and buying yourself somewhere to live with your DP? They would then still need to work and support themselves but no rent. They'd have all the other bills which might take more of their money and be an incentive to earn more.

If you plan on passing your inheritance from your parents directly to your children PLEASE look into doing a Deed of Variation. It's the most tax efficient way to pass this money down and will make a huge difference to the tax liability when you die. Seek advice on this from an estate planner/solicitor.

I would do the Deed of Variation but then ensure the money is put into a bond or a trust so that your DC can't access it for several years if you feel they wouldn't benefit yet.

I plan to do the above when/if I inherit from my parents. My DC are also struggling to launch but they are neurodiverse and have experienced severe trauma, so I want to support them to live the most fulfilling and calm lives possible.

I am baffled as to why you want to give money to a man from outside your family. Hell would freeze over before I would do that to my kids. Keep the inheritance in the family. Treat this guy to some nice trips or something.

I have considered that actually, but I don't think they'd look after "my" house the way I do, and that could present issues for me. Obviously it wouldn't be my house anymore and I'd need to step back and let them let it go to ruin....but it's been our family home for nearly 30 years.

It enables them to have choices. I honestly don't see why you're prioritising a man over your children but it sounds like you're determined to so I don't think there's anything anyone can say. I don't feel sorry for your children because they won't get the money. I feel sorry for them because their own mother is clearly disappointed in them doing a minimum wage job.

You have such low expectations of your children.

You post seems a bit all or nothing, you are thinking too much about a potential inheritance.

Exactly my thoughts . They could give up working altogether with 500k sitting in the bank

Do I understand it correctly that your children are get the 500k each now anyway (from your parents, avoiding you for tax purposes), and you are wondering what additional inheritance they should get from you after your death?

I guess one thing to think about is timing. You sound fairly young and so the 'second round' of inheritance might be several decades in the future? Might your children feel they have inherited from granny and grandad, but not from their own mother? I think the way you communicate this is really important (maybe leaving out the failure to launch part!)

I would just give them it.
Let them make choices for themselves.
Dont try to control them .
You have no idea what they have planned or what they will achieve. With or without the money.
You are coming across very judgemental.
You said at the start that relatives didnt have especially high paying jobs. But they saved and planned and made a decent amount to leave you.
Why is that any different from your children working jobs that's dont have a high wage?
And if they had been in better jobs or had promotions would that mean they could have the inheritance now?
Unless you let them make their own choices they will never become fully independent and successful

Don’t give money to children who haven’t launched well. Even if they buy a house with it, they will still fritter away the opportunity that provides. 500k can be enough to stabilize a future and begin a nest egg for retirement if it is used properly.

Until they are ready to really understand that this is money that can change the rest of their lives, not just make today easier, you should keep it invested and under your control.

Your initial post seems to suggest your making huge judgements for your children. Why don’t you have a better view of them you say they have not launched well but are in their 20s what were you expecting? It is so hard now to leave home, rent or buy if you don’t have well paid jobs particularly if you live in an expensive part of the country. You can choose to give them money however much to help their lives or not. It doesn’t have to be all or nothing but you are not giving them much credit. Yes they might squander it or make the wrong choices but as a parent you can’t choose their life or reactions to this. If you want to live with this man do so your kids are adults. Trusts also cause issues with trustees often using money to exert control over beneficiaries. You might end up with the opposite result that you want your kids might resent you if you keep all this inheritance, live with your boyfriend in the house they have grown up in but refuse to help them because they haven’t met your standard so far.

I would give it, or as much as is needed, to your kids provided it is used to buy their first home. After all it's damn near impossible to get on the housing ladder now unless you're very well paid. And I think as long as they are working they should not be punished for not being ambitious. A few decades ago ordinary working class 20somethings were able to buy a home. I would not like to have £1m in the bank while my kids can't afford to buy a home.

DOV to place the £1M into a trust that you control. You and your DC (and unborn DGC) can then be beneficiaries of this trust income and/or capital
Should be sufficient assets to make this worthwhile

I’d set up a trust for each of them which you are the trustee of, plus ideally one other. Allow money to be withdrawn for a deposit on a house (or total cost if cheaper area) or subject to your approval for specific purposes eg paying off student loans, buying a modest safe vehicle. Split your money in your will into three with some topping up the trusts and some going to your dp. You can modify the trust and will later on if you feel they no longer need protection from themselves

why not give them £50k each and the rest is locked away in some ISA/trust thing. 50k is a lot of money. If they crazy you'll know you were right. maybe 250k for you and your partner. Still leaves a nice chunk

First of all, I'm so sorry you've lost your parents. It sounds as though they were excellent at managing their money.

I wouldn't give my children anything right now, though I would look at investing quite a chunk of money into a pension fund for them and would speak to a financial adviser about it. I doubt you can do that without telling them, because of tax relief, but if you can, then I would.

I think the very worst thing you can do for unambitious children who don't work hard is to give them a safety net that makes them able to work even less. Once they know they have that money they won't have any incentive to pull their socks up. Also, as they are young they may well marry and end up losing a lot of money or half a house in a divorce.

That money is yours - it's your inheritance. They will have their own inheritance from you. Don't think of it as you not needing it and them needing it - think of the effect a large sum of money will have on their character. Don't let them think it's their right to have it. You could give them a couple of thousand each for a holiday if you want to give them a gift from their grandparents. Their attitude to that will tell you a lot.

As for your partner, I'd hold back there, too. He seems like an adult version of your children as they are now, tbh. You're excusing him but not them. What personality type do you go for? Would you rather be with someone who's more like your parents? More like you? There's nothing wrong in wanting someone who works hard and who is ambitious.

So ultimately I'd look at pensions for my kids and then I'd invest the rest for now, while I decided what to do. The biggest problem would be making a quick decision.

Doesn’t sound like your DP has launched himself either OP. I’m sure your children give you joy too. So what makes DP more deserving.

Your children are blood, he is not. You will have no doubt read the numerous threads on here of ladies finding out their DHs have done something completely unexpected and unspeakable.

Not sure where you live OP, but in some areas £500k is simply a deposit. Even if my DC hadn’t launched themselves I’d hope they could live in a house rather than a flat.

My thinking is as yours was originally OP. My own Mother too. Wouldn’t dream of re-marrying and ruin the potential inheritance that had taken years over 2 generations to build up from my parents originally working low skilled and low paid jobs. Na, too much effort for it to leave the family.

If you’re that bothered, put a higher age on them receiving it. Or give them some other incentive to earn it.

If you leave some/it to your DP what would he spend it on, and then what stranger would inherit it from him further down the line?!

You might need it for retirement/care home fees. I see countless threads saying they won't help out their elderly parents.

I know people suggest buying the kids a home, but homes are expensive to keep up - if they can't afford the maintenance and repair on a home then they'll either let the place rot or they'll ask the OP for more money.

I would buy the kids a £500K house each on the grounds they always have a property and don’t sell it to pee money up the wall. They will still have to work to fund bills etc. then I’d leave my own home to DP

There would be nothing stopping them from selling that house and spending the money.

I’m taking this advice. In a similar situation and supporting a child to launch makes more sense, ie, support education or health needs.

You have two years from parents death to give it to children. I am doing something similar as a Deed of Variation. A solicitor can advise but not at those sorts of values but a fair amount. By doing it within 2 years means that you cover the scenario that your parents die - 40% tax and then you die another 40% inheirtance tax on effectively the same pot of money.