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.

Oh and without outing myself, all of the children are enjoying the benefits of my inheritance from my late parents, actually my DSC moreso than my DC, which is absolutely fine and I am also perfectly content with that.

@SunnyintheSun Yeah, I totally get that. Which is why I'm seriously thinking about all of this and struggling to decide what to do.

It was my choice and I entered this partnership knowingly and in full awareness obviously.

I never thought about crap like this though. Didn't even occur to me.

Actually if you marry you get the lot if you survive him UNLESS he specifies othewise. You are then at liberty to dispose of as you wish e.g. all to your Son.

However that works in reverse also - if you die he gets it all and can leave it all to whoever too. One would hope that would include all 5 of his kids in all likelihood evenly unless he states otherwise in his will.

I would suggest seeing a solicitor to draw up wills but also outline the options to you. Fair and Equal don't always mean the same thing, and whilst they may not inherit anything from Mother - there is always the chance they would/could.

@PerfectPenquins I get that but it was still my Mums money and prior to that it was my Grandfathers money. Two of the most important people in the world to me and I can't help it but their wishes matter to me. Both of them work their arses of their entire lives and they didn't do it to provide for someone else's children.

I wish I could just get over it and do what I want with it but as I said their wishes do matter to me.

If not married it is more straightforward but also equally likely more painful - his kids get half and you are left with your half. If there is no for your lifetime clause then they could force a sale and leave you without a home

@MrsTerryPratchett I agree. It's a massive issue as there are may others issues and there is no right or fair way.

You can add a tenants in common restriction on the title of the property meaning each half share is protected and your wills should show what happens to it. Best to chat over with a solicitor and write wills at same time as buying property.

That's why people make wills. See a solicitor. Doh.

Although, the only way I could ever buy a house is with my inheritance which I won't get if I do this.

Just to clarify, is the house to live in with your DH and DC rather than eg as an investment?

Either way, you could probably do something clever with trusts. Not my area of law at all but I think the trust money could be used to purchase a house (or a share in a house) for you the use whilst you live and then when you die the house (or the percentage of it that was purchased with the trust funds) is still an asset of the trust fund which would pass to your children. You'd need to get proper advice on this though as this is not my specialty!

I'm a child of a step parent and had 2 step children and 2 children and we split our wills like you suggest. From the perspective of being a child my "parents" will split their estate in half and I'm set to inherit half and my step-siblings will share their half.

My previous will was set, my half split 50/50 with my children with my ex-husband and his half split 25/25/25/25. I remember my ex being quite surprised about this and he expected the whole estate to be split 4 ways. This was backed up by our solicitor and said it was perfectly normal and excepted. Obviously you can split it however you want but don't be pressured.

People can remarry and have more children too.
Divorce or marriage invalidates a will

calliebirds I really do not want to sound morbid but please do not automatically assume you will be able to leave money to your child/step children when you go.

My mother sold her home to pay for her care in old age and very little was left after that. It was her money and her choice.

Buying a property probably makes sense for you, you'll put your money into bricks and mortor, and in your old age won't need to pay rent. Cover your bases with choosing wisely in a good area (location/location/location is not just the name of a TV show!), and hopefully you may well have something to pass on.

Speak to a solicitor and work it all out. If/when one of you dies you don't want to have to sell the family home because someone will expect an inheritance but make sure your children will all get the correct share.

Also, it's not really your concern that your step children's mum will not be passing on a property. Things may change for her, and for you, but ultimately I think it is just better to be fair with the children with what there is.

However, other people make good points and you could split it equally between them (but personally that does not feel equal as those children have you, and your husband (their dad) and their mum. Your son only has you and his dad.)

So are we talking about huge sums here? If its just a few hundred thousand then why not just share fairly? Presumably you're not waiting for someone to die in order to house your family. You have 5 children. Just be equitable.

My DM negotiated to buy my DF out of the house when they divorced on the understanding his half would go to me and my brother.

She remarried, bought a house cash, in her name, from the proceeds of my childhood home. She died suddenly, intestate, two years before him. He got all her assets, including the house, as the spouse and gave it all to his three kids from his previous marriage apart from 1k each for my brother and me - just to keep us from contesting his will.

He knew he was ill and had time to sort it. His his kids got everything.

We contested anyway and they (his kids) agreed to pay my brother and me 10k each out of court which worked out at 8k after solicitors fees. His kids got 100k each.

There's no legal trail I know of from the agreement that my dad gave his half of the original house to brother and me to mum's second husband giving everything to his three children.

Mum accepted his previous family and always said it should go five ways. Unfortunately that did not happen.

So, what I'm saying, is make sure of what you want and get a legal trail.

Oh and just one final thing @user139328237

Lets look at it another way. If DH and I had a half share in our current home each, his DC would likely inherit 1/2 a house each from their mother (which was the previous marital home of my DH and his ex), plus another 1/4 each from us, so 3/4 of a house each. My DC (I have just one) would inherit just half a house, nothing from her father at all, so by us getting together she would end up with 1/2 a house only, so less than her step siblings. Would that be fairer do you think?

DC are all perfectly fine with knowing that they will end up with roughly the same as each other.

It should be split in half, with your half going to your DC only and his half split between all of his children including your DC.
Like you said you have to make your DC your priority and I would do exactly the same. So if me and my dp did the same thing, my half would go 4 ways and his half would go 5 ways as we have 4 together and he has a child from a previous relationship who would have their own mum to potentially inherit from.

My parents and their partners have both decided to give their halves to their children only. They remarried later in life so nobody has a big relationship with their step parent though really.

This is a no brained to me. You split everything in half then your half goes to your kid and your husbands half is divided between his kids. It's the obvious way to do it.

BTW have you thought about University expenses, driving lessons etc etc. Are you happy to find his kids to the detriment of you own? How are you finances going to work. The more you think about it now the less problems you will have in future. You may love his kids now but what if they turn into horrible lazy rude teens! You might not want to be so generous then.

Personally I'd keep finances separate.

I have two children from two relationships. My DH has been in the life of my eldest DS since he was two.

Our Wills have everything split 50/50 between the boys.

DS1 does see his dad but I think any inheritance from him will be tiny - he's not a homeowner and very unlikely ever to be.

The only discrepancy is that currently there is money due to come from DH's work place in the event of his death, that will only be paid to his wife and biological children. DH is thinking of adding something into the will to try and give something to DS1 to even it out a little.

I don't work, and haven't since DS2 was born. So I haven't added anything financially into the house, although obviously have saved us massively on childcare bills!

I know we're in the minority with our Will plans, but DH wouldn't have it any other way. I'd hate for resentment between my children if DS2 got a much bigger proportion. They are brothers ( we don't say half !) and we're one family unit.

On the other hand I have a friend who has grown up step sons and one son with her DH. If she had her way her SS wouldn't get a penny of anything, not even a split of their Dads half. I'm hoping their Dad doesn't have the same opinion!!

Just to add as well, if you have your DM put her money in a trust when she dies it could potentially be protected in terms of not counting as your assets for assessing care needs and therefore should be available to pass onto to your child(ren) even if you end up needing care.

My understanding is that there are rules against sticking money in a trust with the aim of protecting it in terms of care fees, but if it's being put in a trust fund primarily for other reasons (ie so your DM can ensure it benefits only her biological family) then that is potentially OK. Again, get proper advice though as this isn't an area of law that I have practiced in!

So there are currently 5 children involved here.

My favoured option would be that when the first of you or your DP dies (sorry, I hate actually talking like that) the house can go into trust so that the remaining partner can continue to live in it. When the remaining partner dies the house then passes on to all 5 children in equal share. I would stipulate that it must be sold and the proceeds split equally five ways.

Keep an eye out for inheritance tax too. Especially if you aren't planning to marry. On your current hypothetical figures I believe that you are within the thresholds, but as your property value hopefully increases there is a possibility that could change. Unlikely probably, but possible.

You would need a solicitor specialising in wills and inheritance issues to draw up the wills, but I am sure it can be set up that way.

All hypothetical so I really can’t see why you are stressing about this? Your Mum and ILs May need care which would need to be funded by them which could involve the sale of their houses, I obviously don’t know your situation but please don’t count your eggs before they are hatched. Personally I don’t expect any inheritance, my mum passed away 18 months ago and I would prefer my dad to enjoy his days while he is able to and if that means he blows all his money, why not? It’s his he worked, and why shouldn’t he enjoy it, and if he neeeds to go into a care home then that’s what his house is for

I suppose my opinion there aligns a little more with how your DP might feel, if he wants all of his children to feel as though they have been treated equally. I do get your points too though.

I'd still personally favour the five way equal split, as that is just what I would be most comfortable with.

One hypothetical question that bugs me...
DP and I both have 2 DCs from previous relationships - none together. So naturally a 50/50 split seems fair with each other’s halves going to our respective biological children.

However DP is considerably older than me and therefore quite likely to die before me.

If we bought a house together and he died whilst only for example £100K equity in it and I continued to pay the mortgage to completion after his death (let’s say total value £300K) and I remained close with SCs, do you think I should have to split the whole equity 50/50 upon my death between our children or can you put a caveat in that states they only get half the value of what the estate was worth at the time of their father’s death when I die. With the remainder of the estate’s value which I would have solely accumulated going to my DC’s?

Or say if the equity was £100K upon DP’s death, then I paid off the mortgage to the total value of £300K but upon my death the house is valued at £500K would you give your SC’s 1/6th of the final value of the house as that would be proportionate to the amount of investment their DF had put into the property?

What would others do?

Get a will and ringfence. Our goes like this, either me or dp die, % of property goes to the persons biological children to be split equally but only after me etc dies or sells the property.untill that happens they are not liable for anything on the property but it stops this % being taken if we go into care and property has to be sold etc.
I'm paying the lion's share for the house ands it's going to my son with dp, his share will be split between his biological children.
Jewlarry and other savings etc will be split equally between all the children.
In our arrangement my DSC m owns their own house so they would inherit that asset.