to not leave the house entirely to the surviving spouse in the will should one of us die?

[TheDogAteTheHomework]

Hear me out.

DH and I are happily married with DC, both of us work and all finances are pooled.

I am DH's second wife, and he has done well through previous investments etc before we were married, so brought more to the marriage than what I did (nothing )

As a means of protecting the children's inheritance DH has said about putting a clause in our wills (we currently have mirror wills) about the house of if one of us dies instead of the all the assets and finances just going to the other surviving spouse, a portion of the house (50%) be put in trust for the children. Just in case one of us was to be 'hit that bus' before our time was up (so to speak), we have seen it happen in our own family where one parent died, there was young dc left, the remaining parent went on to remarry and the new spouse moved in and they divorced years later leaving the dc left with absolutely no inheritance from the second marriage.

He is looking to see if we can protect our children's inheritance that way I think it's a good idea but thinking that I wouldn't want to run the risk later (god forbid something happen to either of us!) of falling out with one of the dc down the line (hypothetically speaking - it does happen though doesn't it ?) and they would be able to force the sale of the family home to release the portion of their inheritance this is my only concern.

Does anyone do this ? I would imagine others would be doing this at some point as well ? Can anyone advise anything ? We will be going to a solicitor anyway, but actually thinking on it we did have a trusted friend (dc's guardian in fact) as an executor on the will along with one of the solicitors, but from reading on here about them charging a portion of the estate as a fee, I'm thinking we might remove this instruction when we redo the wills !

Depending on the size of the estate it is also worth leaving an amount up to the value of the inheritance tax exemption to your DC on the first death, as this is tax effective in that there will be a second tranche which will be tax free on the second death.

La Raclette but there's no need to do this anymore since the introduction of the Transferable Nil Rate Band in 2007. In fact it could be a lot less tax efficient if the nil rate band increases significantly between the deaths of spouse one and spouse two.

Sometimes my clients decide that, in order to minimise their IHT liability, they'll give away significant chunks of their estates (Potentially Exempt Transfers) which is fine if you are absolutely confident that you will still have plenty of capital to see you out comfortably.

What you should never do, however, is give away part or all of your home to your adult children whilst you remain living there, if it's your only or main asset.

As Poshfrock says, Nil Rate Band Discretionary Trusts haven't really been used since the spousal exemption came in 7 years ago, I do still however have clients calling me up and telling me that's what they want! The spousal exemption and significant increase in the threshold a few years ago has made NRBDT inappropriate for the vast majority of clients.

I think it's a good idea, my friend's dad remarried, when he died the step mum took everything for herself and her own children by a previous marriage.

My friend got nothing - all the family money went out of the family. Her step mum never spoke to her after the funeral. Not a good situation.

My parents did this - when my Mum found out she was ill, their wills were changed to put her half of the house into a trust when she died.

My sis and I are both trustees, along with my Dad - so no one can force the sale. And if my Dad does choose to move, he would have to have our agreement to reinvest the money in another property.

It means that Mum's half is ringfenced both from future care costs and (Mum's greatest concern) from any future wives that my dad might have.

I'm a bit about all these people left "penniless" because they didn't inherit a share in their parent's home. I've never assumed I will inherit anything from either of my parents. I'd rather they liquidated their assets and enjoyed old age.

Also I'd be pretty pissed off if my children had a say in where I lived if dh died. Dh and I own our house together, we don't have 50% shares of it each. If I died first the house would be dh's 100%.

I find the idea of trying to control everything from beyond the grave quite creepy tbh - but then I trust my husband.

I think that, unless you can predict every possible scenario you risk tying the hands of the surviving spouse meaning they can't do their best for the family.

I also don't see why my children getting a share of the house is more important than my dh being able to sell it to finance the care he needs in old age. I don't particularly want him to spend his last years in a third rate nursing home, or receiving the manditory 2x 15min 'care' visits a day that the local authority deems necessary.

not an expert, but wouldn't that trap you to owning just that one house? Because if your DH died next week, if you sold to move elsewhere in the country, you'd have to give the proportion owned by the DCs to them, rather than use it to buy a similar house elsewhere.

If you died tomorrow, he'll never be able to downsize and use the equity, never be able to take a job elsewhere in the country and sell to move. If when your DCs grow up they want to settle elsewhere in the country, he couldn't follow them without giving the inheritance to all the DCs first. He'll be stuck there.

Yes you can put in clauses to stop the DCs from forcing you out, but that keeps you in it to. Running a house that might well be too much for you, or in the wrong location, or just not the house you want to live in later on.

Thing is you have to balance off doing right by your spouse, and potentially doing right by your children. For example:

Imagine your dc are over 18 so not dependent (this does make a difference). You die, everything goes to your spouse. Then he remarries (which invalidates any previous wills), then dies on honeymoon. Everything now belongs to the new wife, and nothing to your children.

We are actually talking to a lawyer soon about changing our wills to make sure this can't happen! The questions I have are (assuming I die first):

(When I say DH I mean DH plus any future second wife/step children etc...I would always presume he would do right by the DC but not going to assume that about anyone else) (oh and we will have mirror wills so the same questions if he dies first)

1. How to make sure DC will inherit my share of everything when DH dies, regardless of what he does with his share in the meantime?
2. How to make sure DH can sell the house (of which DC would have inherited my share) and use the whole value to move elsewhere if he wants, without having to pay out the DC's share? If DH does this and (eg) the whole house is worth £500 when he sells/buys, but then the new place is worth £600 when he dies, how to make sure DC get the same proportion of the final value when he dies as they had when he sold the original property.
3. What happens if they have a share of a house that is mortgaged but he pays off the mortgage? Do they get only their share of the value that was mortgaged when I die?
4. How to make sure that they can force a future second wife to sell when DH dies so that they get their share?
5. Assuming the house is mortgaged how does this work? Will the mortgage company allow a minor to own half the house?
6. How to make sure DC can't force DH to sell (ever).

I think DH thinks I'm mad worrying about this - but I've read about too many people who remarry and forget their first family to want to chance my DC losing out!

I'm not inline to inherit much from my parents, and tbh if they spent it all on fine wine/good living I wouldn't mind. But I'd be seriously pissed if I didn't get anything because it went to a second spouse due to a badly thought out/badly drafted will.

But what if your dh wanted to downsize at retirement and spend the money? I'd want to allow that too.
I also trust dh to not marry someone who would not look out for our children if he passed away. If I turn out to be wrong in that I hope I will have equipped my children to make their own way in life the way we have.

Petra what happens if you die tomorrow, your dh marries someone lovely (after a suitable period of grief) who helps bring up your children (and pay for their upbringing) , and grandchildren and nurses your spouse in their declining years? Are they still to be chucked out of their home on your dh's death?

My father left everything to my stepmother when he died on the understanding that when she died their assets would be split between her biological children and his.

She left everything to her kids and nothing to us at all, having sent us a copy of their joint will asserting the above and allowing us all to think that's what she'd do. My father had brought plenty to the table and supported their good lifestyle.

I think he was a mug to have trusted her, as were his children.

Tarka that's why I recommend including a portability clause, so that the surviving spouse can move or downsize whenever they wish.

It's not about portability though. What if your dh wanted to downsize to a 1 bed flat and spend the rest of the money on a holiday or a new car or 100 other things he might do with the extra money. I would want that to be at my dh's discretion. Not force him to hand over any proceeds of the sale, above and beyond the flat's purchase price, to our children. That might mean that the dc don't get "your share" would you be alright with that? Or if he sold up entirely to rent in sheltered accomodation - does he give them the money then? What if he needs it for living expenses?

up to you tarka. you can only give away your own assets. your dh still has his half to do what he wants with. so you can choose to either give your money to your dh, your kids, both or neither. for me, its the kids every time, easy decision. also i know dh. he would remarry quickly then never bother making a will. id rather my kids get it than wife no 2

I guess what I am saying is I don't see us as having shares. It is joint, so if he dies it becomes 100% his. If he wants to leave it to a second wife, or the cats home, that's his call.

Tarka, he will still retain his half of the surplus. So say the family home is worth £600k and it's owned in equal halves as joint tenants. You go first and leave your share to your children.

10 years later, your husband decides to downsize. Let's presume the house price is now £800k.

Your husband buys a 1 bed flat for £300k, and the 50% trust is ported over, so the children now own £150 worth of flat. The surplus £500k is split equally so that your husband has £250k to blow on whatever he likes, the other £250 goes to the children which is only fair because they now have a share of a much less valuable property.

Hope that makes sense! I normally only suggest life interest trusts to step families or older people who want to protect half of the property against care home fees.

A life interest trust can only work if the house is held as tenants in common. Severing a joint tenancy is very simple, it's just a matter of signing and submitting a form to the land registry.

Cross posted, iPad is sooo slow!

As well as the other points mentioned, if the value of half the house is more than the nil rate band inheritance tax will be payable on the excess if it goes to the children. Note that this can also happen if there is no will. Also, if they do not live in the house throughout their ownership (e.g. after they grow up and move out) capital gains tax will be payable on gains when the property is sold. The life interest method (for the surviving spouse) well drafted may be the better way to go, but you really need to take proper advice to understand all the issues.

I don't really understand all the legal jargon but ...

It don't half smart to know my step mother (wed 3 wks before DF death ) is living it up on the proceeds of my DF and DM life together ... Myself and 2 siblings got nothing ,

We are all adults living lives of our own , we are not grabby or entitled but it should have been ours ...

Sorry not sure my story is relevant to op but the worst does sometimes happen .. I'm sure my lovely DM didn't think her DH (my DF)would leave it all to another woman and not the kids !!

sorry about your parents Toofat2B.

This is the classic case of where a LIT would have been useful if your dad had thought/taken advice at the time of his second marriage.

if you are not interested in giving your money to your kids after you are gone, tarka, then i guess it doesnt really matter if it all goes to a possible future wife or the cats home
most people want, eventually, for their kids to inherit. i hate to think my kids might be disinherited by us both 'accidentally' because i left my share to dh.

Those people owning half their parents' house in order to avoid care home fees: a council is legally allowed to try to claim this money back as clearly the parents have full interest in the property and it can be construed as evading the fees.

I agree that it is imperative to have a will if you remarry when you have children. To add to the other stories on here, my aunt married a man with a 17-year-old son six months after his wife died. (Interestingly it's apparently the happily married men who plunge into remarriage the fastest.) A year later the man died, and he had not left a will. The son had just turned 18 and my aunt would not allow him back from university. He was out, without a penny. My aunt's family thought her behaviour atrocious, but she didn't care. She was living in a large house with a very substantial amount of money. In the end it was her son from her first marriage who really lucked out. He inherited £2million and apparently is still trying to be a pop star (aged 55...)