Grandparents leaving money to grandchildren?

[Honeysucklelane]

I read an article recently about the rise in grandparents leaving their will to their grandchildren instead of their children.

I believe my in-laws may be doing this and I’m not sure how I feel about it. On one hand thrilled for my children, but on the other worried they may come into a ton of money at a young age.

How do other people feel about this?

Why would anyone be jealous of their kids getting money? It’s not about jealously as I would give the kids some of it anyway. Plus they inherit from us.

I think another problem can be if there are "uneven" numbers of grandchildren. Eg if you have 1 child and your sibling has 3 children, would you expect the grandparents to leave their money divided equally between the 4 grandchildren? Or has the sibling with 1 child been "penalised"? What if one sibling has no children?

DM left a % to each grandchild. They were not a proxy for me or Dsis. They are adults in their own right. Who they were born to is immaterial. We as dc all for a % too. We all got the same £. No arguments either! I would have given mine to dc anyway and Dsis felt hers would never get a house deposit so she didn’t have to think about that anymore. No dc has a right to a parents’ money either. Handing money over early is also a good move if you can!

I posted exactly this scenario earlier in the thread but with the opposite point of view. Ie where there is only one grandchild from one of their children, that grandchild will end up with 50% of inheritance when it’s eventually passed down, whereas through the child who has three children, those grandchildren will only end up with 16.67% of the grandparents’ money (50% split three ways).
So the grandchildren who are one of three siblings will end up with significantly less of their grandparents money than the one who is an only child!

I get that point of view too. But in my family, my brother has no children, so he would (understandably!) think it was unfair if he got no money at all!

My SIL's PIL willed their money to their 4 grandchildren because they didn't want their 3 daughters in law to benefit from their money. Of course this meant their sons didn't benefit either. It didn't matter for 2 sons as they are financially comfortable, but my SIL and her partner are always short of money and could do with a lump sum.

Well obviously that wouldn’t be fair either!
I think it’s sensible to leave an amount or % to each grandchild, as well as bequeathing money to their own children. That seems to make things a bit fairer.

I wish my parents would leave anything to either me or my DC!
It’s a good “problem” to have.
Personally, I would prefer my DC to have access to it, but through a trust with clear rules about how and when accessing funds.
Would be nice to discuss this despite the tabu around money and death.

DH and I will hopefully have paid off the mortgage by the time our parents die, but DC will just be starting out in life. If my parents leave us their assets, such as they are, I would definitely think about making a deed of variation and giving the main chunk to DC (or in trust if they're too young to be responsible with it).
The difference it would make to them to have a deposit for a home, versus just making our retirement a tad nicer would be huge.

My mum wanted to leave 2/5 to me and my twin brother and 1/5 to our older brother because we have 2 children each and he has one. Both of us told mum that we agreed with dad that if it’s left to us then it should be split 3 ways. The only way we would agree to 1/5 shares would be if it went straight to the GC. They decided that 1/3 was the way to go.

I think it really depends on each individual family and their circumstances.

For example, I’m in my 30s, parents in their 60s.

When my grandad died, he left all his money to mum and dad, dad was his only son.

My parents have always got on fine financially, able to afford two children and an abroad holiday every year. But never had enough for nice cars, a bigger house, other luxuries. They’ve never struggled exactly, but also never had the best of the best and could never just relax financially.
Now that they’ve come into some money, they’ve spent it on doing up their house, their garden, and been on a Caribbean cruise. And I couldn’t be bloody happier for them. They deserve it. They could never afford to do these things before and pooled any money they had into bringing up me and my sibling. My boyfriend and I have scrimped and saved to buy a house (currently in the process!) and we have our first baby on the way. Parents have given me some to help out which is lovely of them, but nothing groundbreaking, and I respect that. It would’ve sped up our house buying process if we’d been given more of grandads money, but we got there in the end (mostly) by ourselves.

On the flip side, my best friend, her final grandparent recently/sadly died. And she was left the majority of the money. BUT her parents are set, they have a lot of money anyway, don’t need/want it. They have a house, fancy cars, holiday home erc and want for nothing. Whereas my friend is single, has struggled a lot to save for a property and has got nowhere on her own. She has two young children. So it just makes sense in their family for the money to skip her parents and go straight to her. So yeah, I just think all families are different and should do what works for them. Even though I do appreciate what works for the receiver of the money may not sit well with their children/parents but what I mean is, there shouldn’t be a set rule.

@ClearHoldBuild Exactly. You can do 1/5 to everyone if there’s 2 dc and 3 grandchild for example. If dc gets 1/2 with no dc, the grandchildren, if all in one family do get a lot less eventually. I don’t see what’s wrong with equal percentage shares.

How do you know this? Maybe the grandparents will spend the lot in a few round the world cruises or cafe home fees. Why does she ‘deserve’ to be left money because her parents are ‘older’?

Or it could be used to pay their care fees. Very foolish to anticipate an inheritance.
I’d have thought older parents would be in a better position than younger ones to provide financial stability to their children themselves anyway; rather than wait for Granny to ride to the rescue?

I know this because we’ve discussed it. We have had several related meetings with our financial advisor over best ways to reduce IHT etc.

Don’t worry, my parents have plenty of money for care home fees should they need it too. The £1m isn’t everything they have by a long way. There’s absolutely zero chance they will spend it all and a fair old whack is already in trust.

My DD could be left largely alone in the world at a younger age than me. I’ve had bank of Dad as a back up my whole life, and bank of Dad has already been very generous to me. I’ve had more than the equivalent of an inheritance whilst he is alive. I’ll be very happy to know DD has some financial security - although I’m sure she’d prefer some relatives.

@FancyCatSlave It seems to be something MN does not agree with - discussing finances. We have discussed a certain amount with dc regarding IHT and have also got on with giving money away. I’ve no idea why people with money take no action earlier or cannot discuss their will. Financial decisions where quite large sums are involved should be discussed to avoid making expensive mistakes.

If I did remarry, I'd protect any money that was due my kids anyway. For the good of my kids and out of loyalty to the former DH.

It wouldn't bother me if my mother did that. Her prerogative for her money.

@Whatsgoingonherethenagain Did your dad not intend this to happen? If he didn’t say anything to you, then she’s got the money to spend as she wishes. Has she not got the house?

But their grandchildren in law can benefit from the money? Makes no sense. In a marriage of some duration, does it really matter if the DIL benefits? We've stood the test of time, everything we have we built together. Any inheritances we receive will go towards the mortgage, which is joint. At this point that's quite fair anyway.

I didn't say I understood why they did it or that I agree with it! It was typical of them because they were strange people.
The grandchildren are all still quite young and don't have regular partners so the grandparents didn't have any grandchildren in law to dislike or disapprove of.

The grandparents just don't seem to have really thought their reasoning out. I know it's not your opinion.

He died in his early 40’s with no will, so I’ve no idea what his intent was.

In the 80’s the spouse simply got everything, by today’s intestacy laws where the spouse only gets the first £325 my brother and I would have got a hefty lump sum each.

no, she does not have the house any more. That’s long gone to release cash. If you read my post she’s now in a mortgaged flat.

she’s just not very good with money. She has a massive pension (equivalent to a 50k a year salary) and lives in her overdraft.

yes it’s her money to spend as she wished and I don’t hold it against her. She’s never had to worry about work or money.

i would have done it differently is my point. I would have set up Isa’s and accounts for my kids so they saw some benefit in the future, get them on the property ladder, maybe pay into some pensions so they could retire early.

it is what it is though.

@Whatsgoingonherethenagain No Will is the issue of course. My DD didn’t make a Will either and also died in the 80s, aged 80. Dm did indeed get everything.

Sorry - missed the bit about the flat. Many people do trade down a property but don’t borrow more in older age.

I do think investing for dc is a great idea. No one invested for me but we took the opposite view for dc because we could. DH’s parents didn’t even cough up the money they needed for his university costs. They bought a new car and other things. Parents can be very odd.

It's bonkers, unless they think their grandchildren won't ever marry or have partners. My SIL said they made it clear they don't consider her part of the family and she has always felt like a baby machine