To want to protect my Children's inheritance

[Starssunmoonsky]

Not really an aibu, but I thought I'd post here for traffic.

I'm about to make a Will, but have no idea how I can protect my DC's inheritance from future spouses, or even if it's possible to.

I've got two DC's who are both young adults now, and my DS has just got engaged to his girlfriend. She's a great girl and I think a lot of her and hope she and my DS have a long happy future together.
However, as we all know, unfortunately sometimes marriages don't last and I wouldn't want my DC's to have to hand over half of their inheritance, especially if they end up having a short lived marriage.

I understand that they are the ones who make their own choices and decisions regarding getting married, but when they're 'young and in love' they often don't see that relationships don't always last.

Is there any way I can protect them financially do you know?

That just kicks the can down the road. How does she stop a Grandchild getting divorced and the GCinL taking half the cash”

What? Do people really worry about such things? In that way madness lies (lays?)

You mightn't be able to leave them anything as you may need the funds to pay for you care in the future.

I think your thinking way too much into this.
Your children are young adults now but when you die they may even have grandchildren themselves. Will they still be naive??

I don't want any money from my parents, and I would be hurt that they were thinking so much about their finances and keeping them away from my husband. Im sensible.... im not naive (been with my husband 20 years and we're only mid 30s) we have a child.

If my parents didn't trust me to make my own decisions then I wouldn't trust them...

This is very common and Trusts are the answer.

When it comes to significant wealth, estate planning that keeps family wealth in the (blood) family is entirely normal.

OP - your best bet really is to consult a solicitor that specialises in this. What you want can indeed be done.

It’s not about keeping inherited wealth from your husband, it’s about keeping half of it away from your ex-husband so that 100% of it goes to you and your children.

If you stayed together till death do you part then you can share your inherited wealth with your husband, of course.

But if he breaks your heart and heads for the hills with the au pair then the money you have been left by your parents is protected.

What if they had children, got divorced, she was the main carer and your DS kept all the inheritance and she had to struggle, resulting in your GC having a bit so good life?

There are so many variables in life and you can’t control them.

It’s so telling that wealthy people are more grasping with their money isn’t it? You’d think they’d be able to relax, knowing that they will always be ok financially.

For another perspective, having spent half my life with dh and given birth to his three children and be in the throes of bringing them up, I would have to write my parents in law off myself if they wanted to make sure any will left me out. Such an action wouldn’t support our family or their grandchildren, it would just other me and create conflict that would be very difficult to resolve. They are not going to leave us much/anything but as often is the case with wills it’s the thought that it conveys that counts.

You and your parents were sensible to do that, and it shows that even unexpected divorces still happen!

FWIW one of DH's grandparents left him and his siblings a significant amount in a trust. During their divorce MIL and FIL dissolved the trust and the funds were considered part of the divorce settlement. The grandchildren never saw a penny.

That doesn’t necessarily follow at all.

It is entirely normal for families with significant assets to take measures in order to protect and maintain their wealth, keeping it within blood family.

Such an event can also be avoided, depending on the trust established.

Are you always this rude?
I've bought my Children up to be hugely independent and they are very responsible, thanks all the same.
But at 19 and 21 years old, don't you think that I'D be being irresponsible if I didn't at least consider the fact that they're still young and don't have enough life experience yet to see that young love doesn't always last?

Of course, I wouldn't TELL them that, I just want to put financial protections in place without them having to know about it for now. I can't believe some posters have a problem with this.

What is the ballpark range of cost for setting up and maintaining a trust in England? Is there a rule of thumb percentage cost? And does it mitigate IHT?

It can, but to truly tie up the money is very restrictive- for example, only allowing the children the right to the income not the capital and only allowing the capital to be spent on real property that remains in the trust. That works for some people, especially where the assets are enough to make it worthwhile (eg £50m in the trust paying out an income of £2m to the beneficiary). It’s less likely to be appropriate for more average estates. Definitely one for a solicitor anyway.

My children were left money in trust by by MIL.

Whilst we are of course very grateful, the administration of the trust and making sure tax is paid when due etc has been a complete nightmare - and both DH and I are accountants!!

In our case it couldn't be avoided as the DC were very young and so a trust had to be set up, but I would be very wary of setting up a trust for adult children.

Leaving money directly to grandchildren could result in your DC having to set up and administer a trust for their children...see above...

If it were me I'd just take the view that once I'm gone, I won't know what eventually happens to the money(!) and so I'd leave it all to my DC, and trust them to set up their financial affairs sensibly.

'Creepy and weird'? Don't be silly.
Oh, and I wonder, did your friend marry for love or money? Hhhmmm

You can’t control what people do with money once it’s in their possession. Sometimes people ask on here about willing their money to spouse A on the proviso they will it to child B in turn etc.

The answer is always that you only get to will your money once and once alone. You can’t dictate what the next person does because the money now belongs to them.

I’d forget it, write your will how you want to and let your kids worry about their marriages and finances.

I totally understand what marriage is, which is why I'd like to protect my DC's
Have you not seen the divorce rate statistics?
Do you not know anyone whose left their spouses for someone else?

In an ideal World marriages would last, but nowadays it's very different to how it was 50 years ago. People have affairs and up and leave just like that, surely you're not naive to not realise this.

I can’t believe what I am reading. Just leave the money to your kids and let them do what they want with it. They could just as easily fritter it away as have a marriage breakdown. Or perhaps you might need it for care long before you die. Or maybe their relationship fails but they want their ex to have financial support for some reason, or to help their children. You’ve got no idea what the future holds.

OP are you expecting to die imminently?? Chances are you'll outlive any short marriages if your dc do leap into something aged 21.

I agree with PP, in the event of a short marriage with no kids, it wouldn't be a 50% situation anyway. And if there are kids involved you wouldn't want your DS living a life of luxury while they spent most of their time in a damp overcrowded flat. You might need to consider all the various potential outcomes and whether you are worrying about a specific situation that's actually unlikely to happen.

Also you can always amend a will!

Yes, you can do exactly that. By managing it in such a way that while they may benefit from it, it doesn’t actually belong to them.

A trust. Our assets are approaching the 1m mark and so we’re considering doing this for our DS when there’s enough stockpiled. Basically instead of a will you create a kind of ‘living trust’ with the assets that provides for you and family - it’s how wealthy people avoid paying inheritance tax / losing assets on divorce. Basically you lose ownership of everything you declare within the trust so it just passes down according to the rules you want to dictate.

Just bear in mind that it’s expensive - you need to appoint a trustee who will take a percentage of the estate amount every year, sometimes for doing absolutely nothing! We were advised to set up a charity first and that charity could then be appointed as the trustee - it’s quite complex.

I'm not planning on popping off yet!

I wasn't aware when I made the post about the fact that the Courts may take into consideration a short lived marriage. Obviously I'd feel differently if GC were involved.

It was in response to a poster who suggested leaving her money to DGC.

Skipping a generation has many other issues too and it doesn't stop the same scenario of a Child / grandchild getting a divorce and their ex taking a huge chunk of cash.