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.

Their mother rents like we do currently but I doubt she will ever own her home sadly. Her parents rent too so she isn't in line to inherit anything so cant see step children benefitting from mum

That doesn’t matter though. It makes no difference whether their mother is a millionaire or penniless.

Dh has two dc from his first marriage and two with me. We think we'll split it 50/50 with my half split two ways and his half split 4 ways.

Same here and that is what we have done. Feels a bit odd that ‘our’ DC will get 3 times what ‘his DC/my DSC’ will. We are considering whether ‘our’ DC get two shares and his DC get one share, Not sure though as yet.

@SaidTheShark
What you are doing is gross. Your stepchildren's mother could end up needing to use all of her funds for care costs so any inheritance coming from her should not be expected. While it is fine for you to want your half of the house going to your children you shouldn't be giving your children some of your partners share 'because they won't get another inheritance'.

@purpleme12 I love my step children. Loads.

However, any money I put into buying a home would be money I inherited from my own Mother and I know she'd be unhappy if her only grandchild didn't eventually reap the full benefits of this.

I didn't chose to have four children. DP did. At the end of the day, I'm not responsible to make sure they are cared for when I pop my clogs. They have their own mother and father to do this!

I chose to have one child. I don't want to have any more myself because I don't want the child I have to lose out.

Also, while you can pass everything to the other spouse, then on to the various dc after that, do think about what would happen if the remaining spouse remarried. He / you might leave everything to the new spouse, who could then change their will and leave everything to their own pre-existing child, leaving out all you and DH's dcs for example.

From that pov, you might prefer not to leave your share to each other at all (IHT allowing) but directly to the dcs at an age of your choice (e.g. 21, 25), naming each other as executor so trustee of the estate until they reach that age.

The problem with that is they could then force a sale and leave the remaining parent without the family home. Though with the money from their own half with which to buy something smaller - which might be all he / you would need once DC have flown the nest.

@MyRelationshipIsWeird I love my
Stepchildren to pieces. We have an amazing relationship.

My child is only two months old but they all love him more than anything. They don't think of him as a half sibling but a true sibling. They have his photo as their screensavers on their phones, etc.

Which is why I feel so guilty.

I also don't want the fact that my child inherits so much more than them to cause any animosity or ruin their relationships.

This is what we have done. For joint property it is divided between us: my half goes to our two and his half goes to his three (which include my two!). Property I owned before him is split only between my two and property he owned before me is split in three. It's fair. My stepchild will inherit from their other parent too.

Re the inequality of different families I'm afraid that is luck. My dp are well off and might have made generous provision for their grandchildren. My MIL, on that supposition, decided to leave everything to my stepchild as my two children "will be looked after by Amabelle's parents". She had no idea as to the position of the stepchilds other grandparents as they had such a fractured relationship but she loved a romantic story.

Calliebirds - that is what I can't help thinking, that this kind of thing breeds resentment and hurt if one person gets more. But just my point of view

And I agree you definitely can't know what will happen so not sure how you can depend on the other parent's inheritance

This crosses my mind ALL THE TIME.

6 kids, 3 mine 3 his. Been together 9 years, 3.5 yrs ago he came onto a mortgage I had had for 15 years (some of that interest only but the equity was mine).

He thinks it should go 6 ways - I do not.

@purpleme12

That's what I'm so worried about.

All the children love each other so much and I'd hate for them to resent my child when they are so close now because he got more than them.

I would probably feel different if DP only had the one child; probably would be more happier to split evenly but it also just feels so unfair on my son to share with four others. Four children that aren't mine and I didn't chose to have.

For instance if the house is worth 200k, split between five is only 40k each and if 100k of that is mine, why should my child only get 40% of my half when he's my only child?

Will he see it like that?
I just know that that would never cross my mind (from a daughter's point of view)

We have 6. 4 are mine from my first marriage, 2 are his from his first marriage.

We inherited a few years ago, from my late FIL. We bought a house.

I will never inherit from my parents. They're just not savers.

The will splits everything 6 ways. No 50/50 between us then them. Just a straight 6 way split. We feel it's fairer.

I was the child in a similar scenario. Though there were no "joint" children. My dad's share of the house went to his children and his wife's share went to her child. So we got half of what she did. But I thought it was absolutely fair as the inheriting child.

I agree with pp about making your decision on your situation as it is now, bearing in mind any joint house purchase. Your own parents may well have to use their own assets to fund care costs so you really can't take any future inheritance from them into account.

Lottie makes a good point about what would happen if one of you should die and the other remarry. I know a woman whose parents divorced when she was a child. Both her parents seem to have been pretty wealthy. Her father died relatively young, having never remarried but having spent all his money, so nothing from him. Her mother remarried, then died. All her money was left to her second husband, nothing to her children. The second husband then remarried, and when he died a few years ago, all his money (which would have included the inheritance from his previous wife, my friend's mother) went to his new wife. My friend inherited nothing from her mother and she was extremely bitter about that.

What doesn't help is the amount of money eh we are dealing with is relatively small. Especially when it has to be split between so many.

If I won the lotto or something I'd be more than happy to give them an equal amount each, enough for all of them to buy their own homes, etc.

But it's not lottery money. It's money I've worked hard for, money I've potentially inherited from my mum who also worked bloody hard for it and it's a small amount. So my priority has to be my own child.

What ever split you end up with make sure kids are really clear before you die, it's terrible to see families ripped apart by hurt

We have 1 together, and 1 each previously.
If we split 50/50 and I have to my 2 and DH to his 2, our joint child would get more than the other 2, which I think would build huge resentment, especially as my 2 live together.
I think, we are going to split it 3 ways.
I say think, because I'm not sure it's the best option.

This may sound harsh but you can protest your love for your stepchildren as much as you like but you're not prepared to put your money where your mouth is. Our four are our children and that's the way we'll treat them. My son considers the others his siblings and would be pretty disgusted with us if we did anything else.

I don't think there is any one "fair" way.

You could say he had 5 children (your step and his one)
You have 1 child.
So his half is divided into 5, and your half goes all to your 1.
That means your joint gets 6x the others. If they don't inherit anything else this seems unfair on them.

But maybe you say you divide it equally between all 5 so they all get a 1/5.
But then the 4 of them inherit from someone very wealthy on their side (could be mum remarries a childless chap or another relative) and suddenly your ds' share looks a pittance when they're now millionaires.

Or you could do other splittings as others have suggested.
But I think however you do it, there is a possibility of the perception of how you have chosen being unfair and causing issues.
So I think that however you do it, you need to be clear on why you feel it is fair.

It's money I've worked hard for, money I've potentially inherited from my mum who also worked bloody hard for it and it's a small amount. So my priority has to be my own child.

I agree with you.

Time for an honest conversation with your DP, I think, and then see a solicitor to get it made official.

I also don't want the fact that my child inherits so much more than them to cause any animosity or ruin their relationships.

Sadly I think that’s inevitable if one of them inherits significantly more than the others. Sadly money does funny things to people and even those with good relationships can end up falling out over inheritance.

I guess you have to ask yourself if your child’s good relationship with his siblings is more important than his financial security?

Imagine the day comes when you and your DH are no longer here, would you want a potential argument over money to prevent your DS from having the loving support of his family?

If the 5 children all got £50k each instead of your DS getting £150k and the others £25k, they would all be in a good financial position and all equal. For one child to be set up with a hefty house deposit while the others get, more than a token, but nowhere near the same amount, is bound to cause some problems.

If you’re seeing them as ‘his kids v your kid(s)’ it will feel unfair that ‘your’ money is going to his kids. But if you see it as ‘our money, our kids’ then it is only fair that they all get the same amount.

If you were to have another child between you in the future, it wouldn’t feel so unbalanced. Is that possible or likely to happen?

Very tricky, Can you set up a fund for your daughter with some of your inheritance when you get it, If you are buying a place outright he could put extra in to begin with. If you are going to get married etc it should be split evenly between all the DC, they are your DD'S brothers and sisters. I would put an investment offside for DD when you inherite it before buying a place.

Personally, as a child of a second marriage, I want everything split equally between my dad's 4 children. He died a few years ago so my mum has all their finances etc. She told me once that their house is down to be split between me and my full brother but she was thinking of changing that so that it would be split between us and her 2 stepchildren. I told her I thought that would be best. They've been in her life longer than I've been alive and I'd rather we were all treated equally. Plus, though I'm sure my brother and sister wouldn't harbour resentment towards me and my full brother if we got inheritance that they didn't, if they got it too then there definitely couldn't be any resentment. And I would feel better if we all got the same.