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?

Its a great idea. Young people today have a very tough time getting onto the housing ladder.
People are living longer. Many oldies now have older grandchildren whom they know and see need the money more so than their own children.

I hope my parents leave money to my children rather than to me. I can suffer living in a small place; I want my kids to properly house and educate their families.

Yup, I agree. Not just buying a house, but also getting into debt with university, unable to save due to high rents and costs of living, student loan repayments, workplace pension deductions on top of tax and NIC, expensive public transport, having to live away from home in an expensive city just to get a decent job.

MIL has just passed away. We're both 60 and don't need her money. Our son does! MIL wouldn't change her will to anything other than 50:50 between OH and his sister. Not even a small bequest to any of her 3 grandchildren. OH's sister is going to keep it all herself and not give anything to her 2 kids who are both in their 30's struggling still paying rent, both doing two minimum wage jobs just to pay bills, etc. - we're doing a will variation for all DH's half share to go straight to our son instead! Sister can't understand it and just trots out the "they'll get it when I die"! She actually seems to enjoy the thoughts of her children continuing to struggle for the next 10,20,30 years. Very strange. Yes, we "could" spend OH's half share on cruises, a new car, home improvements, etc., but we literally couldn't live with ourselves when we see our son working his arse off, (working full time and studying in his spare time for professional exams) with most of his wages (far higher than minimum wage) still disappearing into taxes, NIC, pension, student loan repayments, rent, utilities, bus/train fares, etc., leaving virtually nothing left over to actually enjoy life!

My parents actually asked me and my sister what we wanted to happen

i asked for my share to go to my son direct but put a clause in the will that he needed to use a certain percentage for a house deposit

my sister wanted here for herself

no issues with it at all from anyone
my son has been much set up for life and so has their partner

They have a small mortgage on a gorgeous house
A fair amount of money in the bank left over
2 nice cars
several holidays / weekends away
Other savings
no debt

They are both young 30 and 27 but they are living a fab lifestyle that even people my age don’t get to have .

my late parents would be over the moon to see how well my son has done from their kindness of leaving him an inheritance . He’s done exactly what they would have wanted him to do and they would be very very proud

my sister - I'm not so sure 😂

If they're approachable, you could ask them to specify that any bequest to your disabled child is placed in a trust.

Money held in a discretionary trust is ignored for benefit purposes.

That happened to my stepson.

His maternal grandmother died young. She had savings and investments of her own, which were put in trust for her grandchildren. As he was the only GC when she died, he was the sole beneficiary. There are now 3 other GCs, who got fuck all from granny.

The trust was worth over £100k by the time he was an adult and it gave him a 50% deposit on semi-detached house in Brighton. As an only child, he will also inherit an estate of well in excess of £1m (probably closer to £2m) when his mother dies. It's unlikely that she'll need residential care because she's got a life-limiting health condition and was given 5-10 years max at the age of 60.

That's why whatever is left when I go will be in a trust for DP's grand-daughter (DP died a few years ago and I don't have children).

My nightmare scenario is DC going off the rails at 18 having been gifted such a huge sum while DH and I are still working to pay off the mortgage we took out to ensure DC attended the best school possible.

DSS's clever granny guarded against that in the terms of the trust. He wasn't allowed to access the trust fund until he was at least 21 and beyond that age the trustees had the discretion to extend that period if they felt he was likely to piss it up against the wall.

He only got the money at 21 because he wanted to buy a house, and I think the money was paid directly to the solicitors handling the purchase. (Mind you, the silly fucker has sold the house and moved in with his mother now, no idea what he's done with the equity.)

The richest person I know started off as a tiler, then made a fortune buying and doing up property.

@LakieLady

My nightmare scenario is DC going off the rails at 18 having been gifted such a huge sum while DH and I are still working to pay off the mortgage we took out to ensure DC attended the best school possible.

You can (and should) review and change your will regularly - some say every 5 years, some say every 10 years, or whenever there's a relevant change.

So your will when your grandchildren are 5 could (and should) be very different to when they're 25! Most people would set up some kind of trust to protect the inheritance for minor children, and I believe some trusts can last to age 25, and some more specialist trusts can last longer.

Agree not particularly wise to leave your directly to your currently aged 5 grandchildren can access without restriction when they're 16 or 18 as you (nor their parents) will know their personality at such a young age nor how they'd treat it a decade later. But when they're teenagers, or 18, or 25, or 30, the grandparent should have a pretty good idea as to whether they'd waste it or not, so their will would be very different and if trustworthy would probably be an unrestricted bequest and a trust would probably be unnecessary.

Also, of course, as the years pass, your own adult children will be going through different life stages, and whereas you may have wanted them to inherit when they were working and struggling in middle age, their needs may be completed different a decade or two when they're approaching (or in) retirement and no longer "need" the money. Another reason why wills need to be reviewed (and changed) regularly at different life stages.

It also depends on how old the grandchildren actually are. No guarantee they will be that young. If my mother had lived till 85 for example her grandchildren would be 40, 37, 28 and 27.

If I live till 85 my gc will be 48, 39, 35, 33, 33

But none if the money would be yours anyway!!!!

If left to grandchildren. So it matters not that your only child recieved a fifth of the money and 4 cousins also received a fifth each as well.

I know that and personally I have no issue with it. Some people however would see it as the family of sibling 1 getting more/less than the family of sibling 2. Money does strange things to some people.

My partner is 67. His dad is 98. So he wasn't born when his parents were very young. And there's another 4 siblings younger than him

And actually it was much more normal for people to have kids in their early 20s sixty years ago

YABU. This is an entirely normal thing to do, it’s to protect the inheritance in case the child gets divorced or dies before their spouse. The grandchildren could potentially end up without a penny of it otherwise. Would you feel differently if your parents also did this?

My DH was devastated when my MIL split her estate between him and our DC. He felt unloved and distrusted - we spend all of our income on our children. If he had inherited it all, he would have spent it all on them anyway!

@Badbadbunny I tend not to like control from the grave: you behave in a way I approve, or you are cut out of the will. It’s likely to split families. Better to set up trusts but treating grandchildren equally is important and judging them as teenagers is a bit off.

No I wouldn’t do this and none of our parents did although we did pass money over to our DC when we got an inheritance but they were older so helpful for house deposits, cars or uni.

My FIL left 50% of his money to his kids and the other 50% to grandchildren. This would make perfect sense if the grandchildren were young adults but my dc were very small at the time and to be honest I'd much rather he hadn't done this.
We had to set up a trust and are responsible
for investing the money until they are adults, there are inheritance tax issues to deal with (7% inheritance tax due every 10 years) and I have no idea whether my dc will be sensible enough when they are 18 to use the money wisely. If the money had gone to my DH instead we would have used it to support the kids and set them up for the future anyway.
I realise it's a nice problem to have and we are lucky to have this money for our DC

My grandparents left me money. I would have struggled to buy a decent house in a nice area without it.

It changed my life and I was pretty young. Just guide them best you can.

See, I think how all that plays out depends on how you parent your children, even when they're grown. I see no benefit in leaving the money to my children and skipping me over, for my children. The reason being that my first priorities would be paying student loans for my children, making sure they don't have loans to start with, giving them a house deposit, that sort of thing. Might I take a holiday I couldn't afford on my own? Sure - but not at the expense of those things that are more important to me for my children. We haven't had much help so, if I can do that for my children, I'd love to have the chance.

Those are probably great ages to get a good sized inheritance, as the will probably have mortgages they can pay off.

You can't generalise about this. The OP assumes a situation where grandparents own houses and other assets, their children are fairly similar and the grandchildren are struggling. This is true in some cases but there are many permutations. A PP has said that she's a struggling single parent who won't inherit anything from her parents - that is really tough. And nobody should assume that there will be anything much to inherit until the sad day actually arrives. Care fees can go into hundreds of thousands over a few years.

That's true. I know some people who have got large inheritances but I wonder how many people do actually inherit something meaningful?

If they don't have the money, you're right, it could be a nightmare. Also, they freeze all joint accounts and accounts of the spouse until the inheritance tax is paid! They make sure bills are paid and allow you an allowance. So kind of them!

But they may never have been able to get a mortgage and still be renting whilst the property prices have risen too fast to ever get on the ladder.

Or they may have decided to wait to have children because they couldn’t afford them and ended up childless or needing expensive fertility treatment, or had a disabled child due to being older parents (there is a greater risk with age)

Not everyone will get to their mid 30’s with a perfect family/ home just waiting to pay off the mortgage!

Not everyone can afford the career they want, I.e. being able to move to expensive areas to get a decent job!

Sometimes, an inheritance in middle age is too late to make up for what’s already been set in motion earlier.