Worried my Sons will be left with nothing

[JaffaCake70]

My Husband and I are both early 50s and have been married just over a year (together 3 years in October).

Before we met I had been renting private accommodation. When we married I moved into my Husband's house which he had been paying the mortgage on for around 5 years, he had also paid a large deposit when he moved into the property as he had sold a previous property. We now both contribute to the mortgage and all other household expenses. We re-mortgaged to the tune of £10,000 to pay for our wedding and honeymoon.

We haven't really had any serious conversations about finances apart from the agreement of how much I would pay into the home but now I'm starting to worry. I know I need to speak to my Husband about the things I'm about to discuss with you, but I just wanted to see if anyone can advise me where I stand legally before I have the conversation.

My Husband has an adult Son and Daughter, his Daughter lives with us, I have 2 adult Sons, neither of whom live with us.

We both have decent pensions, if anything should happen to him before he cashes his, I would receive it and vice versa (he would receive mine). This has all been put into place.

He has told me that if he should die before me, the proceeds of the house are being split 3 ways between me, his Son and his Daughter.

My worry is: What is being left to my Sons should I die first?

This is really playing on my mind because the way it looks to me on paper is that they wouldn't get anything.

Is there anything I can do to change this? Can I split my pension 3 ways so that my Sons get a 3rd each?

What will happen to my 3rd of the house if I were to die first? I am now paying into the house, surely my Sons should be entitled to something in the event of my death? How does it work though? For example, if I were to die in 10 years time (God forbid) but my Husband then went on to live for another 20 years, maybe even marries again, what happens to my 3rd of the property?

I'm really worried that I've put my Sons in the position of not receiving anything at all if I were to die before my Husband. I don't have any savings to bequeath to them, the only money I have of my own is my pension.

Do I have any legal standing in stating that I want my 3rd of the property to be divided between my Sons in the event of my death. I still feel it's a little unfair that my Sons would be receiving less than my Husband's children (as in his children would still receive a 3rd each, my Sons would have to share my 3rd).

I'm stressing myself out with all of this, I know I need to speak to my Husband but don't want to come across as money grabbing as I'm really not. I just want to know that my Sons will be provided for financially in the event of my death.

YABU - Your Sons should not be entitled to anything from the house

YANBU - You work just as hard as your Husband and are now paying an equal amount into the home therefore your Sons definitely are entitled to a percentage of the house.

But more than YA/YANBU opinions, please can anyone advise as to what I should do/say in this situation?

I mean those guaranteed Over-50's plans advertised on TV are talking about paying out to cover funeral costs. Or perhaps a nice holiday if you were lucky. So, not big bucks.

"Some posters are saying you need to be “on the mortgage”. Well actually if you are not named on the bank loan and associated mortgage that’s no bad thing!"

lol. Amazing how quickly some people want to rush into taking on debt.

What's important (to me anyway) is that the equity that's owned truly reflects the amount of contribution made, that equity can be left to who the person wishes and can't be diverted anywhere else in the event of a death, and a situation will not develop where either partner will be forced to move if either partner dies.

AFAICT "being on the mortgage" doesn't help with any of this.

I can't actually get my head around taking out a mortgage for a wedding and a honeymoon. That blows my mind

Do you get a death in service payment? If so you will be able to name your sons on that in case the unfortunate happens and you pass away while still employed. I take it there are no joint saving or finances as any funds in those go to the surviving spouse.

Maybe talk to a financial advisor about whether life insurance is really worth it or if you are able to put away something in a different way. Also you don't need to leave them something when you've gone you can give something to them now if you are in a position to do so and you can see them getting the benefit of it. You should also think about how your funerals will be paid for which is hopefully a long way off. You could preplan and pay which your sons would probably really appreciate when the time comes as it will lessen what they have to cope with when the time comes.

Your situation isn't straightforward so I would try to unpick it first. I can understand you wanting a share of the property proportional to your contribution. I do think you should probably get legal advice first so that you know what is practical and what you are asking for before you talk to your husband.

How about if instead of putting down a "large deposit" the husband had saved 10k of the deposit and spent that on the wedding/honeymoon instead ?

Would your mind find that OK ?

The only issue is whether or not taking on extra debt makes it unserviceable.

Not whether the money is in neat little boxes that makes people happy.

As PP said It all boils down to if your on the mortgage and whether your joint tenants or tenants in common, if your joint tenants the property will automatically go to the surviving spouse, and should you die first he can then bequeath to whom he pleases as can you if you survive him. Tenants in common mean that you both own 50% and can bequeath to who you wish, the surviving spouse could be forced to sell; If there is no will I believe the surviving spouse would inherit to the value of 322K with the rest being divided between the children. This information is all on the internet. But first you need to find out if your name has been added to the land registry, I suspect not if you haven't signed anything. He can also do a deed of trust to protect his deposit. I think what your asking is fair not necessarily for your children but to protect your home, you both need to go to a solicitor together really.

No time to assimilate all the answers here…..

Ask your solicitor about changing the house to “Tenants in common.” That means a percentage of the house, based on your contributions to it, can be separately left to your sons.

After you die your DH can remain in the house but when he dies or moves on, your estate still qualifies for a percentage as agreed via the Tenants in Common agreement.

A family member did this in the 40th year of her marriage. She took seriously unwell & was afraid her DH might remarry if she died.
To protect their daughter’s inheritance they agreed to own their matrimonial home as TinC. Their solicitor sorted it out.
Glad to say family member us still alive but it settled her mind to do that.

I would have a discussion with your husband about it. Maybe suggest that the proportion of the house he has paid for should go to his children. But further amounts of equity should be split between your children.

For example, if the house is valued at £400000 and the mortgage is £300000, then he owns 1/4 of the house. Since you are both contributing to the other 3/4, you should jointly own any equity above 1/4 of the value in this case.

In your will, you could leave half of any equity above 1/4 of the value to your children. In his will, he could leave the first 1/4 of the equity, plus half of the value of any equity above 1/4 of the value to whoever he likes.

You could both also add to the will the right for the surviving spouse to live in the house or any house bought with the proceeds until he/she dies. This would mean the person who dies first would have their share kept in the house, but legally it would eventually pass onto their children.

Yes you're right. I hadn't thought of it like that. My upbringing of never getting into any debt lives strong. Debt=poor choices and overspending was the mantra from my parents. Who ironically were in debt and just never wanted me to be in the same boat I guess.

^^ This.

I have the impression that many MNetters don't know about life insurance. Or see it as some holy grail of savings/ inheritances.

It's an insurance based on diminishing returns because we all die!

Think about it- why would any company insure you for something that was going to happen (rather than a risk that might happen)?

As you age, the premiums become very expensive and the returns decrease.

If you have money to spare, consider a private pension plan, where you can invest every month or annually up to age 75 and the tax relief adds 20% every year. It's also a tax-free sum you can pass onto anyone.

OP, out of interest, how did your husband come to acquire this house? Did he buy it himself after he split from his ex, or was it the family home?

@JaffaCake70

I'm just '@ -ing' you to call your attention to this post. @HeadChog knows whereof they speak.

My auntie remarried and each of their individual assets (including mortgage-free family homes) were left to their respective children. When he sold his house, she gave him a life-interest (where I live called a 'life-estate') in her house, but his name was never on the deeds. The house would have gone to her children with him having a right to stay in it until his death, he could no longer maintain the house 'in good repair', he remarried/cohabited, or he left with no plan to return.

When he sold his house the equity became part of his estate to be left to his children, just as auntie's home would have gone to hers if she had died first, but he predeceased her. She was entitled to -0- from his estate, just has he would have gotten -0- from hers. This is the way they wanted it in order to protect their children's inheritance.

The difference in your situation is that since they were both mortgage free, neither ever 'paid' part of a mortgage on each other's homes. The thing is, if you are not on the deeds or the mortgage, you are NOT 'paying part of the mortgage'. Paying a bill that your name is not on does not give you any ownership or interest in and of itself. Just as if I was kind enough to pay your car loan off, that doesn't make me part owner of your car.

You really, really need to speak to a solicitor. But you might want to prepare yourself for a little 'push back' from your DH should you want to change things to 'lessen' his DC's inheritance.

I do hope that @JaffaCake70 understands that her own circumstances are the most important here, not some future inheritances for her sons.

IF she has understood correctly, her H's will would leave her only a third of the property. This could on the one hand appear generous as she is unlikely to have contributed a third in her lifetime of contributions to the cost of it.

However, unless she has the right to remain there until she dies, the house would be sold on his death and then what would she do?

OP, you are right to want to protect yourself if you pay in for a number of years and he is right to want to protect his property.

A fair thing to do would be to transfer 1/3 of the property into your ownership so that you can leave it to your sons.

You have had excellent proper legal advice on here about various issues, so now is the time to get it sorted

do you want lifetime interest to live there - and ditto your DH if your share passes to your sons so they can't force a sale?

what percentage should be transferred to you

own the properly correctly so that you can will it

you each need a clear will that states who gets what etc

if he won't put it into your name, then stop paying his mortgage for him

The one thing that you cannot count on is that he will leave anything to your sons if none of this is sorted out. I agree that the majority should go to his sons not yours, so if he is going to leave you 1/3, then that seems a sensible figure to transfer now.

He could be reluctant to do that in case you get divorced. It is really tricky negotiating these things, but you can't be expected to pay into a mortgage if you are not on the deeds.

Hello, I have some experience of this area so I hope this information below can be of assistance. All of this is written from the perspective of you being in England: if this is not correct, none of this is valid, so please do clarify that!

I don't think your husband is lying to you, reading between the lines I think you're just confused about the situation.

£10k loan to pay for wedding/honeymoon
Calling this a 'mortgage' is technically true but not really helpful, it is a personal loan secured against the house but NOT to pay for the house, but to pay for wedding/honeymoon. Paying it off is therefore NOT a contribution to the house. Essentially this is similar to having a 10k debt on a credit card that needs to be be paid off, it is £10k borrowed to cover wedding. You may well be a party to this loan, if you've signed some papers and it was taken in the joint names of you and your DH. It sounds like you are both currently paying this off. These payments have nothing to do with your status regarding the house and don't pay a cent towards the house, they are just a debt on the side for your wedding. This debt will not affect your relationship to the house either morally or legally.

Current ownership of the house
As I understand it, you currently do not have any ownership of the house. The house was bought by DH in sole name before your marriage. He paid with a substantial deposit and the house still has a mortgage to be paid (not just the mortgage above, but one used to purchase it). Eg he paid £800k for the house, £400k was deposit and £400k was mortgage. Both mortgage and house are in his name.

Equity in the house
It's really hard to advise on this without understanding even roughly what the house is worth and what the equity is. This could be a situation of him having already paid for most of the house, or it could be one where (assuming you stay married for a couple of decades) you both end up paying for it. Regardless, as you noted, your moral right to the house would change substantially over time and this should be reflected in estate planning.

The house going forward
When is the current fix on the mortgage due to end? This would be what I would be thinking about in your position, if we assume it is likely in the next year or two.
Option A: new mortgage, tenants in common (50/50) for future payments with his current ownership ringfenced
When the mortgage fix is changing, I would want to take out a new mortgage in both of your names. He should ringfence all of his contributions and deposit to date, in his own name, and you should agree to pay future mortgage contributions together as co-owners for the remainder of the mortgage term. This would mean you would own ONLY the portion of the house that you contributed towards. So if £400k (half of original value) has been paid already, and you together paid off the full mortgage, you two would together both own the next half (£400k) of the house (so you would own one quarter, or £200k of the house, although of course the value of the house changes over time). The shares could be fixed either as percentages or as lump sums, he would likely prefer the former to reflect how his early contributions have grown over time (eg 20k paid 20 years ago should be worth a lot more than 20k paid 2 years ago).
What would happen if you divorced
If you divorced under option A in the next few years you would likely be awarded your potion of the equity (likely a lump sum of a couple of thousand, which he would need to pay you when buying you out) and he could remortgage in his own name. The house would go back to being 100% in his name but you would have a chunk of money reflecting your contributions. You have a short marriage and no young children together so this would be the likely outcome.
What would happen if he died
The house would be likely need to be sold. His ringfenced money would pass under his will (see below), then the remainder of the equity would be divided 50/50 between his estate (and passing via his will), and to you. So this would mean if he died in a few years and you had not made many contributions, your direct ownership share would be thousands but not significant. However if he died in 30 years it could be very substantial.
OR OPTION B
The situation is more complex if he does not want you to co-own the house in the future of your marriage. In that case, you need to consider investing your money in other assets, not contributing to things like improvements etc and instead put the money into ISAs etc in your own name. In this case I would (personally) absolutely not be paying it into life insurance. Your main problem here is not the issue of what you pass on to your children, but the issue of how YOU would be housed for the remainder of your life. Your focus should be on ensuring YOU have assets set up for you in the future, then you can have these go on to your children after death. Planning assets for your children when you have not provided for your own old age is madness.

The house in the will
This is separate to the ownership of the house. If as above your DH owns the house in his own name then legally it is entirely his own decision where the money from that goes on his death.
The 1/3rds
It sounds like he has told you that he has set things up so that if he were to die shortly you would receive both his pension and 1/3rd of the equity of his house, with the other 2/3rds going to his children. This sounds like a good set up as you would have a substantial deposit you could use to purchase a small house in your own name, plus a pension, while his children would immediately get their inheritance. You'd be able to remarry and decide where to live. You need to remember this is NOT 1/3rd of the house that you actually get, it is 1/3rd of the equity, so if the house value is £800k it is a very different amount if there is a £400k mortgage remaining or a £100k mortgage left!
What the will does not do
However I think you are slightly confused about the status of a will. This 1/3rd of the house is only relevant if he dies, and if at his death this will is still the current will. He's entitled to change it if he wants, and would certainly do so if for example you split up. So as you can see it is a separate question to the matter of the current ownership of the home.
If you died now
If you died now, you could only will to your children what you actually own. So this is your savings, your personal effects, etc. You can't will to your children 1/3rd of a house that you have no ownership over! So if leaving money to your children is important to you, I would focus on (a) staying alive for a good while! and (b) accumulating assets in your own name. You should also note that joint savings with your husband (such as a joint account) pass automatically to the surviving spouse, they do not pass under a will. So in the short term have savings accounts in your own name to have something to both protect yourself and to pass on if you die.

The often mentioned 'life interest in the house'
This would be to give you the right to stay in the house for life on the spouse's death, even if the will gave the entire thing to the children. I would absolutely not be looking at this at this point in your case. This works well when you are thinking of elderly spouses who need somewhere to live with the assumption of it only being a fairly short period, or where you essentially want to give your spouse a house but ensure the money after their death still goes to your children. In the case of a short marriage that has not produced children, he has no moral or legal obligation to provide a home for you for life.

Firstly the house is mortgaged: unless he has a life insurance paying off the mortgage on his death, there isn't a whole house asset to pass on. There's potentially a big mortgage left to pay and you'd likely have to sell it anyway.

Secondly it would be a very poor outcome for his children. You are in your 50s and could well live for even another 50 years. The children would have legal ownership of a house (with related responsibilities and costs) but no actual asset, they could be dead before they get their inheritance. This would not be a good outcome legally or morally at this point.

Thirdly it would not necessarily be the best outcome for you at this point. It wouldn't give you anything to pass on to your children, you also wouldn't have the ability to move/downsize to fit lifestyle. It would cause family resentment, especially if you had a new partner. If he died tragically tomorrow, and you remarried in 5 years, do you think it would be fair for you to still be living in a house legally owned by his children for decades to come?

So...what should you do?
You need to speak to your husband and with professionals about estate planning. You need to separate out these strands:
1: ensuring you have some support in the case of your DH dying in the foreseeable future, which should be aimed at getting you into a strong position for the remainder of your life while passing the majority of his assets to his children
2: getting the structures set up so you can grow your own assets in the future, so having savings in your own name that you can then eventually pass to your own children

It's quite the opposite! He has lied to OP about being on the mortgage and is using her money to feather his own/his children's nest. Or at least that seems to be his plan. The legalities of marriage may spoil his plans. OP has been far too trusting.

Basically you are still renting as you were previously. You don't own the house.

I think both of these approaches are really unfair. Estate planning is complex but even more so when you are thinking of later remarriages. OP is absolutely unreasonable to expect to be set for life if a husband of 1 year died died, but on the other hand is very much not unreasonable to think that if she pays a mortgage and house improvements with her husband for another 40 years she should have some security on his death. It's a complex balancing act and something where it should shift over the life of their marriage to reflect the financial contributions with time.

Wtf? A court of law doesn’t see a wife as renting her marital home.

She is contributing to the mortgage and probably also doing the housework and cooking, she is entitled to her share of the property.

Yes, he should ringfence his deposit but he can’t keep the whole house.

My sister married a man with kids. They discovered if her husband died first my sister would inherit everything and nothing would go to his kids unless my sister left his kids something when she dies. But tbh they don't need to worry about that as they are both skint lol

Have you now been legally added as co-owner of the house or are you just giving your husband money for bills?

I can understand you wanting to leave your kids something if you are now named on the paperwork and paying to the mortgage but you need to remember he has paid a large deposit and a lot into the mortgage so it wouldn't be fair to his kids if your kids walk away with the same share as them. Why do you think your kids are entitled to an equal share of a house you haven't been contributing to for 5 years and you haven't paid towards the large deposit? I don't think that's fair at all and if that's what your planning on doing then I Hope his kids kick up a big stink.

Also, why should you get all of your husbands pension whilst you seek to split yours 3 ways between your husband and your kids? Would you be happy to split your husbands pension with his 2 kids?

I get you want to leave something to your kids but this whole post seems to be geared towards your 2 kids gaining, firstly by splitting your pension 3 ways instead of going to your husband as he is leaving all of his to you.
Second, you want your kids to have an equal share of the house the same as his kids but you haven't contributed nearly as much to the mortgage and probably won't unless he dies soon and you pay the mortgage for another good few years.

You need to have a talk about this stuff and tell him your feelings. If you die first could he put in his will that your kids get your share when he dies? Tbh imo when he dies it should all go to his wife but that's only if yous have been together longer than yous have and on the understanding his kids get their share when you die so I understand why he's left part to his kids too.

Get life insurance that would be paid out to your own children. I'd do that and not tell anyone.

It is normal to have wills that plan for the possible death of a beneficiary. Eg if his son dies then his share would go to his children. If his son dies without children then his share would go to his sister. Similarly, he might say that if you die first then your children can inherit your third. But he could change that at any point after you died, so it only provides a moderate form of reassurance. I think all you can do is have a will that leaves your much smaller estate (which includes no property at present) to your children.

PS if you both die in an accident presumed order of death is oldest first.

You need to sit down with your husband and get legal advice on this. Realistically you are not entitled to 50% and nor should you.
If anything the property gets valued now, and the equity in it is ring-fenced as his and then any equity gained going forward is 50/50 or 70/30 whatever you agree as a couple.

Your son not having a father is irrelevant, your new husband is not the dad. Your child is an adult who doesn't have that sort of relationship with this man.

At this point with a marriage in your 50s and both already having older children finances should be more separate imo.

OP,@DozensOfRoses and the PP with la specialism in the area, whose name I can’t easily find now, have good ideas. The second PP thought a good legal consultation would cost you £200-300. I know that’s a lot of money for many people in these tough times, but this is so important I hope you will make some sacrifices, if necessary, to do it.

@DozensOfRoses may not be correct in every detail, as she said. She made some educated guesses. But her broad themes ate intelligent. Note that she also wants you to see a solicitor, and she raises the possibility that there is honest miscommunication between you and your husband.

@JohnFinlaysNewTeeth you have misunderstood the OP. She is not objecting to helping to support the household. She doesn’t much like the fact that she is accumulating equity that her sons may be unable to access, as things stand, if she dies first. The experts on the thread thus far all share her concern. How you amongst others made such an elementary mistake I have no idea.

Or maybe I am wrong? Perhaps you think it is morally correct that the OP should have no say in the disposition of her equity in the property? If so do please tell us why.