Inheritance and Stepchildren

[calliebirds]

Feeling totally confused. A terrible thought occurred to me today and I need to know if I'm being unreasonable.

It's also hypothetical at this point.

DP has four kids from previous relationship.
Together we have one child.

If DP and I buy a house together how an earth do we deal with inheritance when we both pop our clogs?

Obviously I'm premature to be thinking about this but I'm actually worried now and wondering whether we should never buy a house together.

Would we divide the house in half, my half and his half. My only child would get my half which means in theory, DP would have to split his half between his five kids. Say the house was worth £250k, that would mean my child got £150k and each one of my step children would only get 25k. Which seems unfair to DPs kids if their sibling got so much more than them and yet part of me feels really uncomfortable about splitting it evenly between all of them as in my mind my half should go to my child as much as I love my step children, they aren't my children and my priority is my own child.

bimbo maybe I didn’t make myself clear I have an older child but have three DC with my OH. They are our children and not step children. My eldest is his step child...

Haven’t read all the replies, just original post, but the way I see it your child would inherit a share of what you own (100% if your only child) - half the house you would share wih DP and an equal share of half DP’s of the house he shares with you. DP’s kids would also be entitled to equal share presumably of anything left to them by their other parent.

Hi,

I am an only child of my mum and dad, but dad has two children from his previous marriage. They will not inherit from my parents marriage, but will from their mothers estate. She still has their family home which has a lot of money tied up in it. Otherwise, any personal funds of my father will be split 3 ways between us. I know they wouldn't expect to inherit a house they never lived in.

I think you have to do what feels right and fair to you and yours x

@Mummyoflittledragon Don't really understand the bit about drip feeding and putting a different perspective on things. What did you mean by that?

I love my DP. I wouldn't have had a DC with him if didn't, especially if I didn't anticipate us having a long and happy future together. I've always been one to plan ahead. I love planning and writing lists, etc.

Your post has a wider application than you might think OP

I have no step children and nor does DH. In the (unhappy for me) event that I get run over by a bus tomorrow I have made very sure that the DCs are provided for. Of course I would be very happy for DH to remarry but I would not be happy at the prospect of my hard-earned lucre going off to a new wife and her children.

So most of my money goes to my kids. DH gets my half of the house and not much else TBH. Seems fair enough. I'm in my fifties btw so my children are adult.

Does anyone know how it would work if DP and I got a mortgage together and we split up?

I hope that never happens but I wouldn't want to enter something without knowing how it all works.

Say it was my money that put the deposit down, how would it work if we separated?

My DP and I are looking to buy a house but I will be putting down all of the deposit.
The way we’re doing it (to protect the financial interests of myself and my DCs) is that he will pay a greater proportion of the mortgage until his contribution towards the house has matched mine. He’ll still be financially better off than renting because his contribution towards our joint mortgage will be less than the rent he currently pays and all other bills will be split 50/50.
If we split before his contribution towards the house is matched then we both get back out what we put in and if we sell then we split the increase proportionately to the amount we’ve both put in.
According to our calculations he will have matched my contribution within 5 years, after which point in the event of either a split or death then any equity in the house would be split equally between our children.

OP your thinking is pretty much bang on unless your partner leaves either a will stating other wishes or whether the joint ownership of the house has been done on the basis that if one owner dies the full ownership reverts to the other owner.

So to be clear ... for example if I put £30k deposit on a house and the mortgage repayments are £1,000pcm then I may only pay £300 a month towards it and him £700 until he has matched my £30K plus any further contributions I have made.

@Winosaurus Hmm that wouldn't work for us as we have a joint acc that both our wages go into and everything comes out of that acc.

I have already looked into separating our finances and then evenly contributing but I didn't actually realise that would leave me £100 short every month.

Ahhh well you asked the question Say it was my money that put the deposit down, how would it work if we separated

I was responding to that.... but if you have a joint account then your question is not relevant to you anyway?

@Winosaurus It is relevant to me.

I was just wondering how the house would be split if we separated, if I paid the deposit but we would both be equally paying the mortgage.

And thank you for answering my question anyway!

If you buy a house together - you MUST buy it as "TENANTS IN COMMON". This means that you each own half of the property and it is your half to dispose of as you will. WILL! A will is essential.

If you buy in the other way, as JOINT TENANTS , if you die first it all goes to DP/DH and he could leave it to all his other children and cut your DC out totally. I am not suggesting that he would do this but it is a possibility.
Main advice is See a Solicitor before buying anything. It is a slightly complicated situation and you do need professional advice. The cost will be worth it in the end. Good luck!

As pp said, when you buy you state you are tenants in common and you get to choose the % that you own. So if you split you get that % back. Do not go joint tenants, then it's 50/50.

I think a Declaration of Trust can include ring fencing a deposit and equity splits. But that would need to be discussed with your partner in advance.

There have been court cases where 50:50 mortgages between unmarried partners have seen a different proportion split on the sale. That obviously involves going through court and the one I can think of went to the High Court. One person left the property, the other continued to solely pay the mortgage for 8 years. the partner that left was originally entitled to 50% but ended up with 10%.

you might get more specific answers on the Money Saving Expert forums.

So your oldest DSC is 14, you’re 8 years older so 22 and you’ve been with a dad of 4 for 3 years. Sounds kosher.

Haven't RTFT so ignore if this has already been mentioned - but you also need to consider (in the longer term) what happens if you die first. If you aren't married and have the house as tenants in common your DP might have to sell up to give your DC their half - even if they are still a child/children. You may want to talk about some sort of trust arrangement. Or if you end up marrying and you leave your assets to your DH, he could spend the lot and leave your DC with nothing. Or not spend it but it would still get split 5 ways on his death. You definitely need professional advice.

My critical life insurance pay out cleared our mortgage. I had three dc (sadly now only two) and a gd and dh has one son. I know how I'd like to divide it but my dh has never treated my dcs any different from his ds. So to save arguments our house will be split four ways,my 2 dc and gc and his ds. I won't know any more gch so I want my only gc to have the same and dds agree.

Or if you end up marrying and you leave your assets to your DH, he could spend the lot and leave your DC with nothing

My dad died intestate so everything went to my mum as we were teens. He had a good job and between the house, mortgage paid, death benefits and life insurance etc probably left over a million in assets.

Fast forward 20 years and there is nothing left, and my mum is actually struggling to live on her £40k/year widow’s pension. She is just shit with money. Our family home would be worth about £750k in today’s money, she lives in a small £120k bungalow with a mortgage on it.

In many ways it is her money and i would never expect to inherit. But, given better financial advice and/or tying some up to give an income, not spending the capital or selling the house, she’d actually be in a much better position now. My siblings and i are very financially aware and could likely have invested and grown the money had we been given some control.

So yes, think about what will happen to your assets and what will happen long term. Leaving houses in trust, for example, with dh’s right to occupy protected, means your dh will get a mortgage free home but it can’t be sold unless dh and the children agree.

Same scenario here, my Dad died 11yrs ago. Mum has daughter from previous marriage, my half sister 21yrs older than me. Never lived in my family home and inherited large amount from her own dad which included trusts putting her kids through private education and university. My mums will is split 75%/25% my favour. Half mum's share to my sis, half mum's share to me, my own dad's full share to me. All agreed by us.
However to add a curveball, my poor Dmum has alzheimers. Last year I lost my Dnan to dementia, Dad's mum, and had been sole carer and eventually had to sell her home and place her in £1000 a week nursing home for final 18months of her life. A third of her assets went on her care.

A couple of people made really good points about wills being changed at a later date. I used to do this type of work and we dealt with family trust funds. You really need specialised estates solicitor.

As an adult I have made my own wealth. My DF died young so much of the wealth they had acquired prior has been spent by my DM. The only real asset left is going to be the house which has been protected by trust.

I agree with you, I wouldn’t want a future partners children inheriting the wealth that I have worked hard to acquire prior to our relationship. These are emotive issues that need sensitive handling, but ensure clarity of how things will work etc. Prior to getting financially tied together.

Since when was an inheritance an expectation anyway. Ensure his DC get the best education possible and encourage ambition and they won’t need or worry about receiving an inheritance from you or their DF.

You need to discuss with solicitor difference between joint tenants and tenants in common. If you die before your partner/husband the property would revert to him and then he could leave it as he likes I think. Also if one of you dies first and you don't leave it to each other could the house be sold from under the surviving partner? You need wills and proper legal advice. Good luck jane

This is your only child and you want to make sure s/he is set up well for life, which is quite understandable. If you weren't in a position to take on the commitment, no one would get anything so each step child will be £25k better off. You can choose to have a 'tenancy in common' where ownership of the house is divided between you and your husband, then it's your choice what you do with your share. But you are obviously a kind and caring person which is why you have this dilemma in the first place. Ultimately it is for you to decide what feels right, then discuss with your husband.

With regard to you putting in the deposit, the shares of the house via a tenancy in common do not have to be 50/50, so you could request a larger share to reflect your contribution of the deposit.

You asked my why it has a different bearing.

• Because you’re more the age of an older sibling than step parent therefore I understand your struggle to find the stepmum relationship.
• Because at your age maybe you’re struggling to understand why it’s pretty distasteful to write an entire thread based on being able to buy a property only when your mother or your dps parents die.

I find your whole attitude to people around you pretty distasteful tbh. I think you don’t mean it in this way but just look what you're saying. 1) The older generation, will need to die to facilitate a house, 2) your step dcs, who you consider of less importance to your own dc when it comes to no existent money and 3) your dp, who you’re not sure if you want to be with in one breath but in the other are talking about big, grown up long term plans.

The first thing to decide is if you’re all in or all out of this relationship. Is it a good relationship? Why are you not sure about it?

Then once you’ve decide and if you’re all in, I think you need to find a better split on the inheritance of the theoretical money you may have in the future than your dp giving your joint child an even split with all his children and you giving everything to your one child.

Go and live a little. There really isn’t a need for a will right now for financial reasons when you don’t have a pot to piss in. (Neither did at your age). I agree it would be a good thing to protect your child in case of both of you dying as you need a plan of who would look after them.