WWYD - Inheritance

[inheritancedilemma]

NC just in case.

I have 3 DC. Eldest has 2 DC, middle has 1 DC, youngest has no DC.

Currently DCs 2 & 3 are set to inherit 1/3 each and DC1's children 1/6 each. DC1 asked for this to happen so no hard feelings. DCs 2 & 3 were single and childless when this was decided so it wasn't discussed with them. My question is, now that DC2 has a child, what should I do? Options are to give them DC2's whole share (allowing for future siblings in this, but as it stands they get the same as DC3), giving them half DC2's share (meaning that all DGC are equal), or giving them nothing (meaning that cousins will have something and they won't). DC2 will just tell me to do what I want if I ask so no point doing that. WWYD?

Leave it as it is.

My Dm did her will as; db got half, I get the other half. If I popped my clogs dds got my share and skipped dh (and rightfully so).

@ivykaty44

Have you worked out the tax implications? There’ll be possibly more to give to the tax man by omitting your children and giving to your grandchildren

Oh this drives me bonkers - you are not giving money to the "tax man" - tax goes towards the NHS, pensions, education, social care, the welfare state and all sorts of public services that we all benefit from.

you can actually word a will along the lines of" I leave £5,000 to each of my grandchildren and the rest to be divided between my 3 children" so that if more grandkids are born you do not need to rewrite the will. That way the kids all get something which I agree is special.

TheSmallAssassin Really I thought it went to this designer www.independent.co.uk/news/uk/politics/nhs-ppe-contracts-jewellery-designer-michael-saiger-b1724493.html

@ivykaty44

VanGoghsDog How do you know?

Because it doesn't make any difference who you leave money to. Inheritance tax is levied on the estate if it's over the very generous threshold.

With the exception of property. The primary residence can be left to direct offspring without IHT implications, up to about £1m, on a sliding scale.

The only reasons to skip a generation are - 1) the first generation are on benefits; 2) as someone else they are bankrupt or facing bankruptcy; 3) they would not use the money and do it would increase the value of their estate over the threshold. In that final case, you really wouldn't know this unless the death was close (don't really know what your financial circumstances might be in x years time, especially when you don't even know what x is!) And the final one can be easily resolved with a deed of variation to the will post death.

I can't think of another reason really. Other than the preference of the benefactor.

I can't think of another reason really. Other than the preference of the benefactor

They could have a complicated will themselves already (step-children for example could be viewed as a reason to generation skip).

Marital problems (including financial abuse)

Gambling or addiction issues that could be exacerbated by a sudden influx of cash.

There are a myriad of potential reasons

I also think skipping a generation is going to be a more common a way of potentially avoiding care home fees as if the parent doesn’t need it for that, then it skips the DC so can’t be used for their fees so it continues on down the generation regardless of the DC’s eventual care needs

With the exception of property. The primary residence can be left to direct offspring without IHT implications, up to about £1m, on a sliding scale

And property is often the largest part of an estate, and it’s not unusual for property to be over that threshold

Split it equally between the 3 households. Your children can then cascade it to their children. That way you wont need to keep updating it for additional numbers of grandchildren.

@Lockheart

Bloody hell, yet another inheritance thread. Is there someone with a project to finish, perhaps?

Now there's a thought. We'll probably never know, sadly.

I think it's fine the way it is, one child has asked you to bypass them, the others haven't. 1/3 each to two children, then the remaining third split between 2 of grandchildren. I'm not normally in favour of bypassing children in wills, especially if the grandchildren are younger; as situations could change and the money could be better utilised by the parents if needed at that time, but if someone is asking to be bypassed, that's up to them, and I don't think you should do the same with others unless explicitly asked to do so.

1/3 to each child and it is up to them what they do with it. No other way is truly fair.

(each child meaning your children not grand children)

When my grandparents died they left 80% of their estate between their children ( sons) and 20% to be divided equally between their daughters in law and their grandchildren.

I think this is an elegant solution, and as a young woman it was very nice to know they had thought of us all after they died.

You tell DC1 not to make things difficult and that they can do as they wish once the money is theres.

Then you write your will to leave everything equally split between your own DC.

I think skipping a generation can be sensible if the parents don’t need it. Your son must have had some sound reasons to ask to be skipped but I wouldn’t do the same for the other families unless specifically asked. I don’t think you have to worry about fairness as long as each family unit is equal.

My parents have left set amounts for my brother and I, the rest to be split between grandchildren. We are at the stage where we have houses with low mortgages. It would mean each grandchild would have a decent chunk towards a house.

We have the same number of children so it's equal, but I think we would have done the same if we had different. The grandchildren will get significantly more than my brother and I and it would be kept in trust till they are passed university age.

It's worded as grandchildren just in case either of us has a surprise extra child, incredibly unlikely!

£5-£10k per living grandchild; currently GC1, GC2 and GC3.
The rest to be divided equally among the 3 DC or their living descendants if they predecease, any share being split amongst the others if they predecease with no surviving children. DC1's share is to be given to GC1 and GC2 because that is her request.

@Idontgiveagriffindamn

Split equally between your children no matter how many children they have. One of your children has asked that you bypass them and give to their children which is fair enough. Unless expressly asked by your other child then I don’t think you should do it. I’d also write into the will that you have discussed it will your child and they wish for their inheritance to go to their children.

this except for the child who has requests that it goes directly to her two children, write it as 'to be split equally between the children of x" she may have had more children before your die also maybe ask lawyer about restricting to her own children - she may remarry and acquire stepchildren.

Did you know that you can be vague in your will and do not have to name individuals? Mine is currently set up to cover my 1 DC but wording is generic and talks about a share going "for such if my children as shall be living at the date of my death". This covers me if I end up at any point with more children. I probably will have to update my will in the future if I get married

I would:

1. split equally across all your children (without naming specifically),
2. Add a caveat that if any of your children are sadly deceased at your time of death, their share goes to their children (without naming names specifically), equally shared
3. For DC1, who wants to be skipped, you can say for that specific child (named) their share is to be split equally across their children (without naming specifically)

If DC2 or DC3 come to a similar mindset as DC1 in future, will can be redrafted to just talking about allocation to all grandchildren in equal amounts.

Keeping vague you are now covered if DC1 has more kids and in any situation where a DC predeceases you it will go to grandchildren

I do think it's nice to specify grandchildren in the will. My grandmother left me £1000 which I used for driving lessons I couldn't have otherwise afforded. My mum didn't give me a penny of the money she inherited (and nor did I expect her to) so it was nice to have this last gift from my grandma.

Your children can do a deed of variation to change your will after you die if they all agree (e.g. to split their share between their children. My Dad did this, it was fairly straightforward.

This wouldn't work for the OP, but a relative had the arrangement of splitting 50% between all his children and 50% between all his grandchildren (there were unlikely to be any more at that point). I really liked that idea.

Sounds unnecessarily complicated, leave a third to each of your DC ,let them hand it out to their DC as they wish. Unless there are marriage / stepchildren complications which means you want to.leave money direct to DGC?
Talk to your DC and ask them what they would prefer

@steff13

I'd give a third each to of your children, and let them dole it out to their children as they see fit.

Me too.

DSS inherited a trust fund of over £40k when he was 5, because he was the only DGC at the time. By the time he got the money, it was over £120k and he was able to buy a house at 21 or 22 because of it.

His 3 younger cousins (oldest is now 22) got nothing, and it has caused some ill-feeling between their parents DSS's mother. The younger 3 GCs are or will be saddled with student debt and little or no hope of ever buying a house, unless there is enough to go round when their surviving GP dies.