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?

It really irks me that people who don’t stand to inherit want to take it away from those who do.

I think people want parity. Income is taxed much more than other sources of wealth. I would personally prefer to pay more IHT and have my income tax band increased.

Makes so much more sense. I wish they would! My nan is leaving everything to her daughter and son as is the way. I don’t want it, my parent doesn’t need it. Would be so much better left to my children (her great grandchildren) so they can go to university and come out debt free, or put a deposit on a house.

This. Leaving money to your children benefits grandchildren anyway, and as parents we can decide when is best to give them money to help them. We aren’t frivolous with money and don’t spend much on ourselves.

Depends upon how affluent the children are? I’d like my PiLs to leave everything to my DCs and skip us as we will likely be in the hefty inheritance tax bracket when we pop our clogs - which means any residual money from PiL’s bequests will be taxed as it will in our pot. If they give direct to our DCs (their DGCs) they won’t have to give any to the tax man. However, MiL has a bee on her bonnet and will likely leave it to DH and SiL (childless, so again, likely to end up long term being left to our kids as she adores them but is fortunately not likely to have a total that would be subject to IHT).

My view is - they’ve worked all their lives for it and already paid tax on it throughout. I’d hate for the a percentage of it to get swallowed up by IHT because it’s been passed to us first.

There’s been no discussion.

My own parents feel strongly inheritance goes to your adult children and they can then decide what they want to do with it and if they want to give some to the grandchildren.

I think it is reasonable to leave some inheritance to DGC as well as your DC but not cut out the DC altogether.
Otherwise, it depends on the particular family and their ages and life stage. A 60 year old with high salary, paid off mortgage, children left home, and due a good pension, does not need much more. A 50 year old with lower salary, teens at home, big mortgage would benefit a lot from inheritance.
A 30/35 age DGC could really benefit from help to buy a home. An 18/20 year old does not yet need a large sum.

Ha ha I wish we were super wealthy and didn’t have a huge mortgage. It is our only debt though.

I think people should be having conversations about their wills when alive ans consideration of grandchildren is something to discuss with parents. For some it would be preferred due to tax reasons, for others it could be a disaster.

For what it’s worth my own parents will pass on some to grandchildren but the majority to my sister and me. My in-laws are younger than my parents and I suspect it would make sense to pass on a bigger chunk to grandchildren or even great grandchildren assuming they hit late 80s/90s. If we inherited in our 60s we’d likely pass on to children anyway.

It’s perfectly possible to get on well in life not having an inheritance. My DCs will inherit from grandparents and from us passing down inheritance to them IF there is money for inheritance, care home fees might eat that up. So we’re not relying on inheritance, we work hard and have planned finances so that we are saving house deposits for our DCs and have started pensions for them, as well as saving for our own retirement and making sure our pensions are on track to be decent. When we are done with the ridiculously high nursery fees we will be able to save more for them. It’s up to us as parents to provide for our DCs, not rely on inheritance we may not even get.

I think sometimes this is done to avoid money going to a DIL/SIL. I’m a single parent, and my Mum’s will leaves everything to me. But if I were to marry some waster who she suspected might bleed me dry and then leave me, taking half of the marital assets (which would include her legacy), I think she might change her will in favour of my kids.

We have a similar situation and I’m also not comfortable with it.

We are older parents, DH is early 50’s and I’m late 40’s with a Reception age DC.

Our parents have stated they are leaving everything to DC because in their words we are old enough to be established so don’t need the money. This is despite us just having taken on a new mortgage because we had to move to a better school catchment area before DC started Reception.

My DH is already older than my father was when he retired, a retirement that was in part made possible due to a chunky inheritance he received from his own father.

They are of course perfectly at liberty to do whatever they want with their own money but it leaves us with 2 potential scenarios neither of which are particularly desirable.

Firstly DC is likely to inherit as a child as DP are already well into their 80’s. This would mean that DH and I would need to be working well into our 60’s to pay off the mortgage while DC is sitting on a huge sum of money.

The second issue is that once DC turns 18 they will have unrestricted access to the money. It is likely to be around £1.5m. I worry how that will impact DC at such a young age as I know I would have struggled with such a responsibility at that age.

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.

We have spoken to DP about this but they are adamant it is what they want to do. I just don’t think they understand the risk it could pose to DCs future. They think they’re setting them up for life.

I think a lot of people are doing this. People are living longer, so that by the time they die, their offspring are already set up with a mortgage well underway, or even paid off. It makes sense to help out the next generation, who have it much harder.

I have planned to share anything I get three ways, so my kids get a house deposit.

I have been fortunate to inherit from my parents.

They left some money to all their grandchildren but a bigger portion was left to my siblings and I. I’m glad they did it this way, the inheritance, while not enormous, has given me security and choice. I would have felt quite hurt if they had decided to skip a generation.

each family will be somewhat unique in their approach to money and debt as well as age and stage.
my mother is 90+ (will pass on part two of an inheritance having already dispersed 1/2). dh and myself 60+ comfortable with what i consider excellent pension options. children 40+; one mortgage free, one with enough savings to be mortgage free and one in place to be mortgage free within 4 years. grandchildren of primary school age.
should dh or myself live to 85+ it may be kind to gift the grandchildren a larger portion by then they will be near 30 yrs of age.
that being said i do plan to fund their post secondary so they graduate debt free.

Meh

it wouldn’t bother me at all. I’d rather the money went to my kids to be fair…

What’s all this about ‘gold plated pensions’?
What do you mean by it….I often see it mentioned in newspaper rags but no one has ever told me what it means. Anything described as gold,d plated is never very valuable is it?
And cheap house prices?
im of ‘advanced’ age…buying my house decades ago was no easier then than now.

It’s perfectly possible to get on well in life not having an inheritance. My DCs will inherit from grandparents and from us passing down inheritance to them IF there is money for inheritance, care home fees might eat that up. So we’re not relying on inheritance, we work hard and have planned finances so that we are saving house deposits for our DCs and have started pensions for them, as well as saving for our own retirement and making sure our pensions are on track to be decent. When we are done with the ridiculously high nursery fees we will be able to save more for them. It’s up to us as parents to provide for our DCs, not rely on inheritance we may not even get.

Giving your dc house deposits & saving info
a pension for them is still generational wealth though. So I'm sure your dc will be ok without an inheritance and still be able to get on with life 😆

I think it depends on the situation of each family. I think the assumption that people in their 40s and 50s are financially secure isn't often true, especially when people are starting families later and getting onto the property ladder later.

buying my house decades ago was no easier then than now.

You must be an anomaly then

My parents are leaving their estate to my brother and I, but we’re both going to pass it directly onto our kids. Neither of us need the money at this stage in our lives, and there’s no point paying inheritance tax on the same money twice.

Ooofff that is difficult! Especially with such a big sum. Did they give you any reason for their decision? As much you wouldn’t begrudge your child, it’ll be really hard.

DD will likely inherit well (only grandchild on both sides). I’m thrilled as I am not in a position to save her much. She could get up to £1m. She hasn’t got much family and has older parents so some financial security is the least she deserves.

Well yes that’s my point. Op was whining about her DCs not being able to get on the housing ladder because they won’t be getting inheritance from grandparents. I’m saying there are other ways to help them without an inheritance and it’s up to us as parents to provide for them if that’s what someone wants. Inheritances shouldn’t be relied on.

Then encourage your children into a well paid trade like plumbing, building, or electric installation, they will never starve and if they are good reliable traders and honest workers will thrive and make their own way in the world.

Agree.