Inheritance to grandchildren bypassing children

[mucky123]

I just wondered if someone could shed some light on why I feel the way I do. It is absolutely none of my business. I freely admit any thoughts about it are unreasonable. If anyone should have anything to say its my bil/sil.

My dh and I are quite comfortable, not interested in an inheritance. We have 3 dc. My Bil not so comfortable but alright. Think they might have a tougher retirement than we do. They have 2 kids.

My ILs. Have some money not loads but are comfortable and very likely to leave readonable inheritance. They intend to leave everything between 5 grandkids. So my kids will get more of the pot than bils. I'm really irritated by this on every front (1) haven't discussed it with their sons, feels like a kick in the teeth for them, (2) gc will be inheriting fairly young. Will this discourage them ftom working, will they piss it up the wall or lose half on an unsuitable marriage, (3) it's like the parents aren't trusted to send the money on to their kids, and (4) it's unfair between brothers as our kids get a bigger slice of pot. That seems unkind to lovely bils family.
Partly also I'd like to be the one to give my kids a house deposit, pay for their wedding etc and this has all gone as they will now have a reasonable inheritance quite early.
I know I'm being unreasonable,

And on the other side of the coin sometimes being a care giver isn’t straightforward and isn’t shared - it’s often left to one person who takes on the burden to their own detriment. Carers allowance is a pittance and comes with an unrealistic earnings threshold and onerous 35 hours per week commitment to caring duties. For some, this very much means that giving care will reduce their own circumstances, and in addition they are saving the person being cared for a small fortune in professional home care/residential care costs. How can you justify bypassing the carer in these circumstances when you are benefiting hugely from what they are doing ?

How old are the kids/grandkids? I mean if the grandparents are likely to die when the grandkids are little and you & your husband and BIL & his wife (assuming he has one) could have done with the money to help fund family holidays and stuff, it seems a strange thing to do. If the kids and grandkids are older and the kids are earning comfortably, going to have their own decent pensions and stuff, then leaving it to the grandkids makes sense.

But at this stage, despite the ages of OP’s DH and BiL and the obvious aged of the elderly parents (clearly in their 80s if not already their 90s) NOONE has had to make any sacrifices in their care at all, have they?? She has not mentioned that the brothers have been sacrificing time or money to do anything for them. They may be like many elderly people, actually quite self-sufficient and pass away in their homes or after a brief stay in a hospice [which is what has happened to my DH’s grandparents and all their 13 siblings, all, remarkably, around their 95th birthdays).

IF there had been any costs involved as of today, I am sure @mucky123 would have mentioned it, as it would be salient. IF there had been a decision to provide care themselves to protect the inheritance pot (by not spending it on state care), it would have been mentioned. It hasn’t been.

At the moment the scenario is two elderly 80’s+ people who have decided that it would make more sense to ensure their estate goes directly to their grandchildren possibly so they benefit from it now, rather than in 20+ years if there is anything left, and so that the whole of their estate is subject to IHT once, not twice once it gets absorbed into their sons’ estates.

OP’s BIL should be grateful they didn’t decide to leave it to charity and that the grandchildren will be getting anything. NOONE is entitled to the assets and estate of an elderly person. Ever. Especially one who hasn’t even died yet.

Some approximate numbers might help. I mean, "not loads" split five ways doesn't sound like enough for your kids to quit work. . . Right?

Five grandchildren and the same amount given to each sounds perfectly fair. Deeds of variation exist - BIL's kids could hand some (or all) back to him if they chose.

You don't know what'll happen. PIL could live to be absolutely ancient. Or one of them could die soon and then the other remarries, changes their will and leaves everything to the new spouse. Everything they have could go on their care. You don't know what'll happen with the kids either - yours or BIL's. They might not marry. Or they might marry someone very rich who thinks the inheritance is small change. They might become high earners themselves. They might become chronically ill, or carers, unable to work. You don't know.

Higher education is expensive and property prices have gone nuts. If your kids are going to have a leg-up while they're young, be happy for them. The "I wanted to give them house deposits" thing seems a bit mad. I mean, you still can. Bigger deposits for them, better houses. Or, if they don't need it, sit on it and leave them more when you die. Or, maybe, help YOUR grandchildren. (People are living so long now that it feels like it might be a good thing if this skip-a-generation thing became the norm. Maybe it would also be good if young fit grandchildren did more caring for the very elderly, rather than their tired sixtysomething kids). If your kids inherit young, just be prepared to give them good advice on how to use it effectively - university fund, house deposit, maybe a wedding fund, investments, ISAs, starting a pension young. Young people often don't know what they don't know on that stuff - be there to help them.

This falls under the heading of "nice problems to have"; try not to worry. I do feel a tiny bit sorry for BIL, but it's their money and their decision and not your problem to solve. You can't say "I think you should leave it to him" without it sounding like "I think you should leave it to us". For now, forget it. It might not happen anyway, but if it does, be happy for your kids and be there to give them the right advice.

This has happened in a branch of my family, one of the children is so annoyed that they were bypassed for the GC that they have refused to act as an executor despite being named as one. Various other complications means that it's been handed over to a solicitor to deal with. Again we are not talking megabucks but a parent wanting to control a narrative and leaving their children out.

As above - atm these 80/90yos appear to have had none of the care people are fantasising about their sons having given them. If she updates to state that they have been struggling under the burden of personal care, then I will possibly revise my position but she has said nothing to indicate that these do 60+ adult sons have done anything personally or financially, yet.

I would be horrified to think my DC would only engage in my care needs when I am that old on the basis of how much they will get in my will. What a world we live in.

Requirement to pay IHT is dependent on the amount left, not who inherits. Any estate above the threshold has to pay it.

Nothing stopping you from giving your children their house deposit. They can just have a bigger deposit. Or buy a 2 bed flat instead of a one bed, for example. Nicer area. It’s a nice position for your children to be in. My parents are wealthy and their inheritance is split 3 ways between my two siblings and me. I agree with it even though the 3 of us are in differing financial situations.
I am also wealthy and the oldest; mortgage paid off etc and don’t need it so will probably look into a deed of variation so my portion can go to my children. One sibling is comfortable but has young children and a large mortgage. The 3rd is left comfortable, renting etc. so for me while I’d be fine with it skipping a generation but as it’s not right for my siblings, splitting it between us and me doing the deed of variation is the right thing to do imo.

All of this being said, I’d be happy if they left noting and just spent it on themselves. But that’s easy for me to say and less easy for my siblings. Either way I’d sooner keep them here alive.

I will also add that while there might be a financial cost to caring for an elderly parent and that there usually is, there is also time and stress involved as well.

A person I know is well off and retired and looked after his aging parent.
Yes his wife helped but that's not the point.

This meant that his social life was severely curtailed as well as the huge burden of looking after an elderly parent with serious health issues.
There wasn't hardly any help from his siblings as they lived too far away.

Yet he did not get anything by way of compensation. Not even a holiday that he didn't have to pay for.
Yes money isn't everything but sometimes it's nice to get to do something paid by somebody else.

How anybody could be OK with that I don't understand.

And the grandkids are all high flyers who didn't need the money, either!

Yes, but if the GP’s estate becomes absorbed into their parents estate, the chances that IHT will need to be paid on that again increases, doesn’t it?

We’ve asked our ILs to leave my DH’s share of any inheritance they want to go to ‘our side’ directly to my DCs and skip him because mine/DH’s estate will definitely attract IHT as it stands. Adding even just 50k from each GP to the pot means that, in effect, when we die it would attract a £20k tax charge atthat stage because it is in our estate portfolio. Much better to leave direct to DCs who would get the full untaxed £50k. In our IL’s case it will be more and their estate will almost certainly attract some IHT, so it means it will be taxed upon their deaths (well the second surviving person’s death, anyway) and then again if it gets lumped in with our estate.

And this is despite the fact that we, personally, fully intend to fund carers/assistance to ensure their wish to remain in their home until they die. We don’t feel they owe us anything. Their money is to do with as they wish. It is not ours.

Yes but if the bequest is to the children they can make sensible decisions about how to use that money in the best interests of the grandchildren, rather than it being wasted by the short term thinking of teenagers or young adults in early 20s. Cash can be gifted at any time they choose. There is no income tax on gifts and, if the gifter survives 7 years after the gift, no inheritance tax. No need for the cash to be sat on until the parents die or become infirm needing care.

Obviously different if the person leaving the money doesn’t trust their DC to look after the interests of the grandchildren, when leaving money direct but in trust until they reach the age of 21 would seem to be the best solution.

If their children are comfortable and alright, it makes total sense to pass the inheritance down to GC who are of a generation objectively more likely to find house purchase and retirement more expensive. And GC are people in their own right, not appendages.

The worry about them inheriting too young is potentially reasonable though, depending on everyone's ages. Any chance they'd be amenable to a stipulation that the money is held in trust til say 25? If they're all well into their 20s already and the ages are such that even the GC might well be pushing middle age by the time they inherit, that's not so reasonable.

I think you have to let this go as it's nothing to do with you. If your DH takes it up with his parents then that's different

I’d be happy for in-laws to leave it to my kids. They’re going to need it more than I do.

Ok, my experience ;
Grandma died.
Parent's already very rich, many holidays, openly saying they do not need the money.
Inheritance left to parents, who spent it all on more holidays, cars etc for themselves.
Not a bean to their own kids, the adult grandkids in their 30s/40s. That money could have literally changed all of the adult kids lives.
Grandma trusted the money would be split up between everyone, that did not happen.

Not your money, not your decision , not your problem.

imagine talking about inheritance and the person hasn’t even died yet. Disgusting!

Among my family and friends, inheritances from parents have largely been wholly or partly passed on to adult dcs anyway.

I agree with you OP. My mother has decided to do the same and my sister and I are hurt by it. Neither of us are well off, we both still have large mortgages and there’s no prospect of any inheritance from anywhere else either. Of course it’s entirely her choice but I know everything I leave will be going directly to my DCs. If they have kids and decide to pass some of it on to them then that’s their choice. Very few of my friends in their 50s are in the situation where they have paid mortgages off, mostly due to divorce etc. Times have changed.

For me your only legitimate concern is about the impact of gc inheriting at an age when they might make unwise decisions.

We're in the same position, in-laws giving to grandkids. The in-laws benefitted hugely from inheritence themselves and have had a very comfortable retirement because of this.
We will have a far more sparse retirement despite paying into pensions and being sensible as we've had a fair amount of challenges with redundancies, ill health etc. But they just don't see that.
That said, it's their money, it's their choice and none of our business.

It is reasonable not to trust your children to pass the inheritance on- my father inherited and will pass almost nothing on, he refused to help me at university despite it being his recently deceased mother's explicit wish- the dead have no say, you have to lock it into the will to be sure it will happen.
Speculating what the affects of inheriting will be on your children is at very best unhelpful- there is nothing you can do about it, so suck it up, you are being far too controlling- it will be their money it's up to them
You can still pay for a house deposit or wedding- how does their inheriting change your ability to do that? You say you are not interested in inheriting but between the lines you absolutely are interested, because you want to control the flow of money and retain power over them.

DM’s will leaves most of her money between her four DGCs, putting it in trust until they are 25. She discussed this with me and DB before drawing it up. It seems very sensible and reasonable for her to want to give her money to those who will need it most, and I was flabbergasted when she asked if I minded that more was going to DB’s descendants. He has three DC, I just have DD, they’re all her DGC and she loves them equally. I also love DNs.
Of course, this is all hypothetical anyway, as it could all go on care fees.

Yep. An exercise in control.
And it's deeply annoying when people accuse the person as being grabby and entitled when it's not about the money itself but that the person being left out realises that this is yet another opportunity for the aging parent to get one over on them.

But as nearly everyone is probably going to see it as grabby and entitled if they make a fuss they have to keep quiet.

If this is the case here, good on him for refusing.

A lot of shit narcissistic parents have a soft spot for their grandkids.
Probably because they get nothing but adoration from them and don't need to do the hard grind of raising them.

You're a decent sort and very kind hearted to acknowledge that your kids will get more than their cousins, and you want to do something about it. There aren't many like you about, unfortunately.
👏

I don’t think it should skip a generation. It’s not great for young people to have access to so much money at a young age.