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.

We've put our house in trust, I don't have any dc dh has 1. I was advised this was sensible as contesting as assets in trust is very difficult. Not that I think dsd would contest nevertheless it gives us both piece of mind.

How strange, we our due to have our first child together any minute, I discussed this with DP yesterday, we need to organise our will.
I thought it would be 50/50 then our child would get my half and his children/my DSC would gain a quarter each. I never thought about splitting his sum into thirds as our child is gaining more than enough from myself, roughly 50k more (just at this moment in time). I’d rather my two step children gain more from their dad than my child inheriting an extra large percentage.

Everyone's will is completely personal.

All I would care about in your situation OP, is minimising the risk of money becoming a source or resentment. It isn't about the money itself, it's about how divisive it is and the messages it can send out. The rationale and complexity involved in dividing up an estate will get lost in the mists of time, the abiding message is how the estate is apportioned. Favouritism is like a festering wound in so many families.

If there are siblings involved, I would ensure they are treated equally. Remember those DC will have a lifetime to make their way in the world and earn their own money. All you're doing is giving each one a bonus, a nice windfall, you're not trying to set them up for life.

I'd also ensure it was worded in the will that the money is to be shared equally between siblings. Then they all carry that message of love through their lives knowing none of them was any more worthy than the others.

A personal view only....

Is there a big age difference. If so, I’d feel less guilty about your original split as your child would be a dependent for longer and more likely to need more support. The 50:50 split proposed is a logical way of doing it might might cause resentment so I can see the dilemma.

Do you also have life insurance policies in place? If so, how would you split that in the event of death?

If you and partner have nothing but have good health please protect yourself and budget for a
Life insurance policy. You can buy one for yourself. If you are young and healthy it costd v little.

You could leave a small bequest to your stepchildren to show that you love them even though your main assets go to your own biological child. You could make it clear in the will that this only applies if you and your partner are still together and make sure you revisit your will regularly to reflect changing circumstances.

I have a 16 month old with my DH and a 10 year old SS. We’ve discussed inheritance and life insurance etc and decided it’s fairest to split anything equally between them. I don’t really see it as ‘his money, my momey’ It’s more our family money and both children are equally entitled to it.

I’m stunned you wouldn’t will it to all the children equally. I’d never partner with someone who didn’t treat my children as equals as a step parent. I honestly can’t believe you expect your step kids to get so much less.

I have two ‘own’ dc and 3 sdc. Remember your dh might survive you! What would he do? It would almost certainly be an even split.
None of our dc are ‘joint’ so at the moment it is an even split in the will.
Part of me would like it to be split, half between my 2 and half between his 3 but I don’t think I could do it. Dh is absolutely committed to an even split.

Personally for me, in the event of my passing the whole house would be shared equally. Just because they are step children makes them no less entitled, they are still your family and in a sense your children too whether by blood or marriage.

Lets say DP has 1 child and you have 3 from a previous relationship and no children of our own between the two of you. Would you expect your 3 children to get a percentage of their stepfathers?

I get the surviving spouse living in the house till they die and then its proceeds being shared out. But what happens they want to move house and need all the equity to buy elsewhere? Is the amount ringfenced and when they die and the second house is sold, the children then inherit the corresponding sum? How is that actually enforceable? What's to stop the widow(er) blowing all the released equity?

Can i just say OP what you are suggesting seems very unfair and is what divides families and causes problems. Think about it in the long run they are still your childs siblings, you can not expect one to get more than the others. Just ludicrous!

As an unmarried mother you need to seek to protect yourself and your DC at all times. Your partner has chosen to have 4 DC, and if you split I guarantee you would be left as sole carer, as I imagine his ex was left with his. You buy as tenants in common, and each stipulate who your half of the house goes to if you die. Presumably his to his DC and yours to yours. If one DC benefits more then that's just unfortunate. Your own DC should not be penalised for their step father's choices. Other possible inheritances from elsewhere are completely irrelevant, and with the cost of elderly care, not even guaranteed.
Make sure you have wills and life insurance, and check who is nominated on pensions.

That's how my Dad and Step-mum have worked things out. Her half of the house goes to my half brother and Dads half will be split three ways between me, my sister and half-brother. They made sure we are all aware of how it is to be split, seem fair enough.

Haven’t read it all but looks like your child is several years younger too. You hope you’ll live until they are well established adults but say you only last another 15 or so years, I suspect SC would have got through uni etc but your child would be on their own.

My father went on to have two more children after he left my Mum. Then remarried so I have step siblings too

It is very complicated. Some of us are in a very fortunate position financially. Some of us aren't. Some of us have another parent. Some of us don't. Both my father and step mother inherited from their parents. And have property. The will is divided equally between all of us. And I feel this is the fairest way.

You can't take into account what a child may inherit from another parent. This money may get spent. Or more likely be taken up in care fees in that persons old age.

It is a difficult situation.

You are right to be concerned.
This was one of the reasons kids at my school hated the step mum and step
Siblings.
Everyone knows the split will be unequal.

I agree it is better to sort it all out early. My DH has 2 children from previous relationships and I have 4 from previous relationships. We have trust funds which effectively means that after both of our deaths, everything is split down the middle. His 2 get 50% and my 4 get the remaining 50%, thus meaning there is less for my 4 but that seemed fairest at the time.
The important thing, as others have said, is to see a solicitor and have all the options explained to you.

I don't have children, but I am seeing someone who does.

A few months ago I updated my will which started a conversation between us about if and when we live together and wills.

Let's just say it didn't end well. I told him all my assets would go to my nephews, not to him though he would retain the right to live in our joint house, then on his death etc it would be sold and my nephews get my half. He was not a happy bunny. It's tough shit. I'm not busting my balls working to leave the money to him to give to his daughter. It's not happening.

You can't take into account what a child may inherit from another parent. This money may get spent. Or more likely be taken up in care fees in that persons old age

Well yes. People who try to account for other inheritances in their own will-making are totally misguided and fail to recognise they have not actual control or visibility of others' bequests. They make dangerous assumptions.

There is nothing to stop a stepchild's "other parent" giving a chunk of their estate to a charity, or sharing it with other family members. The only thing you can control is your own will.

I will be having my will done soon and plan to have 75% natural child and 25% stepchild if I die last. If I did first gthen it all goes to DH and he can split in half if he likes. Most of the money is mine, or from my origins. Step child is an only on the other side and will have quite a bit so Im not leaving them high and dry.

You could leave a small bequest to your stepchildren to show that you love them even though your main assets go to your own biological child

This is such a good idea.

My friend's father had a child with his second wife. When he died, his entire £2m+ estate went to the second wife. My friend and her brother are both on a sound financial footing, own houses with that are either mortgage-free or very nearly so, and have decent pension arrangements, and my friend had always suspected that this would happen.

While she wasn't upset about the money, she was devastated that there was absolutely no mention of her and her brother in the will, not token bequest, nothing. She said it made her feel as though they didn't really exist in her father's mind and that all the contact she'd had with him was just a sham.

Her father had got her interested in astronomy and she thought he might have left her his telescope as a reminder of their shared interest. When she saw it for sale online, she said she felt like she'd been kicked in the guts.

Your DH could take out additional life insurance/ assurance for (all) his children. This would 'even up' the pot a little.

The way to side step the whole financial issue would be for your mother to put what she leaves in trust, with you and possibly your son, as beneficiaries. If set up to allow this, the trust could loan you (interest free) what you invest in the house. When you die, the loan is paid off and your som inherits the money from the trust.

All your and his children of the marriage could be given equal shares through your wills, while your son would separately inherit from your/his family trust, which helps sidestep your issue.

There are however lots of complexities and unintended consequences, as the law changes over the period of time that the trust exists. For example, in the simple example above, the trust, and hence your son alone, does not benefit from any increase in the house price over your lifetime, that increase is shared equally under your wills. There are set op and operating costs to be considered. Currently this works well but the law might change under future governments .... but it might be worth considering.

This is a simplified way that money is handed on through the generations. Please notice I'm not commenting on you mothers attitude, just explaining how it could be done

Just went back to read the rst of the thread and seen tvat others @AllyMcBeagle have already mentioned the trust idea. Ive written this now so shall post it anyway, 😀