My Dad has asked my opinion on a proposed change to his will.

[Shewas]

I have no idea what he's worth but he's always going on about inheritance tax, so I guess the estate is not insignificant.

He has two DDs and four DGCs (two each).

DSis is married to a man from a wealthy background, so DF is assuming she and especially her DC will do well from that side of the family.

My DH is deceased and we are not in touch with his family. I am full expecting DC will not inherit from them, and even if they did, I doubt there'd be much value.

I have always told DF to spend everything now and live as comfortably as possible, but that's not in his nature, so I'd expect what he has to be split equally between me and DSis, or as we don't need to money, perhaps equally between GC.

Dad is now talking about making things "fair" but not equal, by leaving a greater share to my DC, as the other GC will be so much better off anyway. I know no inheritance is guaranteed, but the other GPs have already set up trust funds for them.

So, I could see my DC advantaged, and I can kind of see the reasoning, but the whole thing makes me feel very uncomfortable. I'd hate there to be any kind of family rift, but also it doesn't feel right to advise against the interests of my DC.

FWIW I think Dsis would be hurt by Dad's actions but wouldn't take it out on me or DC, but people sometimes act out of character where wills are concerned.

WWYD?

Dh inherited from FIL recently. Everything was split down the middle between the two sons. BIL is very wealthy and we are poor compared to him. We've got to use the inheritance to live off whilst he has been able to buy a sports car, go on a fancy holiday etc and people have commented to me, privately, that it's such a shame that we can't use it to buy a car or go on holiday etc However,dh and I wouldn't have it any other way. It's not BILs fault that we aren't as well off and it was his dad as much as dh's, it was only right it was split equally.

Why is he (and maybe also you?) discounting the possibility your DSis might get divorced?

Nearly 50% of marriages end this way so it seems very short-sighted to be thinking of her as safely married off to a wealthy suitor...

They've been married 30 years so I expect she'd do OK in any divorce and the DC (who are adults) already have trust funds, so whilst they may not always be as well off as they are now, are significantly better placed than "ordinary".

I think your dad is being very unfair on your sister and if I were you I would encourage him just to split it between you and your sister equally. There are many things you can do in order not to pay tax twice, let him know so it doesn’t sway his opinion.

What do you think OP? I’m afraid if you think he’s right, you’ll not get many agreeing with you on here.

I think neither you nor your sister should be involved tbh. If he wants to take independent advice that would be better but if not this is something you should both step away from and whatever he does has no comeback.

If you care about your relationship with your sister and you would like your children to be close to their cousins tell your dad to split it equally between all his grandchildren. Otherwise the relationships with these people you presumably love will be compromised forever and there will ultimately be distrust at the heart of your relationship with your sister. More importantly on division of assets an unequal division, even if it’s for practical reasons, for the people left behind it really feels like less love.

Fair split is the only way. My DH has a wealthy family but isn't getting anything from them. Also care fees can eat up inheritance.

I know everyone on the boards always says inheritance should be split strictly evenly, but in this case I can see your dads reasoning. Maybe he should just make it very clear that it has nothing to do with love, and everything to do with trying to balance the scales, and let the general gist of things be known upfront (no need to talk about specific numbers), just so there are no nasty surprises in the end. But he has clearly thought this through and wants to do the right thing, in the circumstances his heirs find themsleves in through no particular fault or virtue of their own.... He sounds like a really fine and principled man. The fact that the ansticipated inheritances on the other side of the family may not happen due to care costs or whatever, is an arbitrary factor that he has zero control over. He only has control over his own assets and decisions and he is right to make his decisions based purely on what is before him.

Your DDad has two children and he needs to treat them equally. Your DSis’ finances are none of his business. Any other arrangement could leave her feeling hurt for life.

This is about far more than money.

Your father should make a gift now to your children. You open a children’s ISA for him to put it into. That way it’s not in his estate when he dies and the money can grow until they need it. I had ISAs for all my kids and they used it for house deposits when the time came.

Why does he need to split everything equally? He has two sets of grandchildren and he knows that some have a trust fund and some don’t, I don’t really we why he shouldn’t want to even that up a bit. Fair means each according to their needs, not everyone gets the same.
Also, this bit has been glossed over a little but is it possible that he wants to leave you more because you see him regularly and your sister does not? If you end up providing a significant amount of care as he gets older and he barely sees or hears from your sister, I can totally see how he might want to reward that.

I don't think he's right.

I'm also not sure I'm right to advise against improving my DC's financial situation.

Also will either of you ( or both of you?) act as executors. That would make things doubly awkward.

Your last sentence is very telling. Of course you can advocate for something that fair just even if it means your kids get less cash. It’s a moral judgement. It’s hardly as f they are going to be destitute as a result.

I'm also not sure I'm right to advise against improving my DC's financial situation.

You said you see and talk to your dad a lot more.

Have you subtly put this idea into his head?

Otherwise, why has he just randomly started thinking about it?

I think there is something in that, although he hasn't said. He's more or less housebound, between me and DS we see him most days and DS goes to do chores and gardening for him (which he is paid for).

It clearly has nothing to do with taxes - no need to deviate from 50% (between the two sets) because of taxes. Taxes are a red herring here.

Would it work if your Dad set up a trust fund for your child equivalent to the other grandchildren's trust funds then split the inheritance equally between you and your sister? This would also work from an inheritance tax point of view as over the following 7 years liability for inheritance tax would decrease to 0 on that sum.

No absolutely not. The only thing I have ever said when he worries about inheritance tax is spend it.

His health has taken a turn for the worse, so I guess the prospect of his death is all becoming more real.

I think Wills are about the parent leaving what they have to their children, and showing them equal worth in that action.

All sorts of circumstances cause differences in fortune - that's life.

Your DSis and her DH could become disabled and lose all their current income, you could win the Euromillions.

So I think he should leave his estate equally to his DC. You and your DSis then have the option to do a Deed of Variation to leave some or all of your part to your own Dc or to each other. If your DSs agreed that you need more, she could divert it to you and it would be her choice.

The only IHT implications I can see are that if your DSis and eventually her kids are wealthier they may, in the future, end up paying a chunk of what was your Dad's money in their own IHT because they would already have wealth that takes up their own threshold, whereas you might not.

I don't know any numbers, but judging on the income they seem to be taking from them, I doubt that there's enough money to set up equivalent trusts, let alone leave anything to be split between me and DC

He’s unwittingly put you in an awkward position. I can see that. My advise would be to ask him please to discuss it with your sister.

Or wrapped up in care fees. It's wrong to assume that they will be fine because the other side of the family is wealthy. It needs to be equal. It's the only fair way.

No, the unequal split is nothing to do with tax. Tax was a reason he gave to leave it directly to DC rather than me, but I suspect that maybe because he's worried about what happens if I remarry.