Note from MNHQ: please note OP's post @ 19.08 on 22 Jan. The OP has admitted this is a reverse but we are leaving this thread up so they continue to receive advice. Inheritance money - AIBU to be p*ssed off?

Which bit of that is incorrect? Suggest you reread the OP and try again.

The trust exists. That happened automatically when ex-wife died. Her daughter was the original trustee. It appears she has passed her responsibilities as trustee to FIL as she is entitled to do under the Trustee Act. He must therefore fulfil his responsibilities as trustee for the children.

I feel so sorry for the daughter, who has terminal cancer and is also being bullied out of money which is rightfully hers. She doesn’t have children and is dying of cancer, so presumably FIL won’t have to wait long for the money to get back to him/the children anyway.

100%

When the mother died, the children's inheritance automatically went into a trust since she was intestate.

Where are you getting this from? This isn't a thing. Trusts have to be set up. They don't automatically happen. There is no trust. The OP said so.

Not exactly relevant to the thread, but what actually happened to the estates of the stepgrandchildren's parents? Their mother died, presumably her estate passed to their father. Then their grandmother died and her estate would have been either left to her DD in its entirety (if she left a will directing thus) or to both her DD and DS (if intestate) and then to her DS's children when he died. So what has happened to all that inheritance that they should have had from their parents? Those children should have more money than just the 50% that their aunt claimed and then passed to OP's FIL...

FIL is not entitled to any of his ex wife#2's estate and he absolutely should NOT be mithering his dying stepdaughter for her inheritance. He is utterly despicable in that respect. The children's inheritance from their GM should be in trust for them and not handed over to FIL, that is disgraceful and illegal. It is THEIRS. Those poor kids, losing so many close relatives.

Unfortunately what is morally right is pretty meaningless.

I've just realised it may be that you or we have misunderstood this point. Let's try a new interpretation of this post.

Is this actually saying the aunt put 50% in a trust for the children and then gave her own full 50% share to FIL? Who now also wants the children's trust? So the aunt is both paying for their care through the gift to FIL, AND preserving their inheritance, but FIL wants to take their inheritance too. Is that right?

Yet another daughter in law on Mumsnet with such comprehensive knowledge of her parents in laws financial situation. Perhaps minding your own business might be in order.

You might want to consider that if one person is left all the money in a will, they generally have no obligation whatsoever to transfer half to someone else.

Kicking off about it may well lead to them getting nothing.

I think the OP and her DH should take the kids in.

Surely that's better than expecting a single pensioner to do it.

There is a lot of confusion here and the family members are likely not to have dealt with the inheritance correctly, whether out of ignorance or arrogance I don't know.

The position at law is as follows. (I'm a solicitor for reference.)

FIL and W2 divorce and split assets 50/50. For the rest of her life W2 owns her 50% and FIL owns his 50%.

W2 then dies leaving her 50% of assets. Either she made a will leaving the assets to her two children in equal shares (I'm assuming this bit) or died intestate which would result on the same allocation. In neither scenario do the assets revert back to FIL unless the will says so (unlikely).

However W2 outlived one of her children (I hope I've got the timeline right). So whether will or intestacy, in the absence of a different express provision in the will, the surviving child gets her 50% and the late son's 50% passes to HIS children in equal shares. There is no scope for the executors or the other beneficiary to decide the children won't get their share.

If the children are not yet 18 (or other age specified in the will) then whoever is in possession of their share holds it "on trust" for them. Ideally a proper trust vehicle needs to be set up but if the executors failed to make those arrangements, the holder (trustee) of the funds holds them on trust for the children regardless.

It isn't clear what happened. It sounds as if the daughter was given 100% of the funds but didn't want to set up a formal trust vehicle for the children's share (unclear why and if the will didn't specify that this had to be done, perhaps because the will predated the son's unexpected death then the executors did not have to enforce one being set up) but the fact remains: whoever is holding the children's share holds it as trustee not as the beneficial owner.

So, the grandchildren go to live with FIL and he asks daughter for (some of?) The assets. She hands over 50%. This is actually correct provided that it is understood by FIL, daughter and grandchildren (if they are able to understand) that FIL is now the trustee.

Daughter is absolutely entitled to retain her own beneficial share and do with it as she sees fit. (She may or may not leave her assets to the grandchildren- no obligation.)

As trustee FIL can't do as he please with the funds he holds for the children. He CAN use it to fund the reasonable costs of their upbringing. But it would be much more transparent to do this within a formal trust vehicle so if he is challenged at any time he can prove all expenditure was wholly above board. He can't spend it on himself, save to discharge expenses he incurs on behalf of the children.

Did that cover everything?

@honeylulu Thank you. The issue seems to be that neither the daughter nor the grandfather see this money as the children's inheritance. The daughter (according to the OP) thinks she inherited all of her mother's because she is the only living child. Therefore, they all see the money she gave the grandfather as money coming from her to help with the cost of raising the children. The grandfather sees the money as his money that his ex-wife took from him when they divorced. Hence, why he is putting pressure on the daughter to hand over the rest of it. The money isn't being held for the children.

@snoozum what agreement was made about the money the aunt gave to your FIL?

And if they've planned a childfree life?

The childrens' parents were negligent not to have insurance, and a plan for guardianship, in place. Now everyone is paying the price.

The OP thinks the inheritance should be coming to her. Too bad so sad.

But (as has been explained many times) all the money does not go to her as beneficiary. The beneficiaries of the estate are her (50%) and the children, on a statutory trust, the other 50%.

Why did she think she would get it all? And why did FIL think he would? It is very simple to look it up online.

There was never any reason for him to think he was getting it all.

Though I have no idea about what fund you are talking about.

He didn’t nearly lose his house. He got divorced. When people divorce they often have to sell the house to split the assets. He wasn’t losing anything. It’s simply what happens. If you can’t afford the home you are in, you need to move.

I don't understand why you think your father should receive all of the money. She's given over her brother's half in a way that helps the children now. Why is she not entitled to anything?

Who will her money go to when she dies?

Sorry, meant FIL.

Why did he think he would get it? It isnt his. End of.

Half of it belongs to the children. He can use that to raise them. But that is all. Their aunt does not need to give any money to him from her share.

If he cannot raise them then he needs to claim UC as a single parent. But it doesnt sound like his actually has guardianship over them, legally speaking.

Why did the daughter of the ex wife get 100% of the estate if there was no Will and there were 2 surviving siblings?

@snoozum

On what basis does FIL think he's entitled to ALL the money? The divorce proceeds might have originally been earned by him but once awarded to W2 he lost all rights to ownership. They don't revert to him because W2 kicked the bucket. The share that has been paid over to him is for the children not him. He could get into a lot of trouble if he's not handling it correctly.

Actually just taken in the update that daughter deducted a debt owed by FIL from the 50% share she transferred. They are BOTH wrong to deal with it like that. FIL's debt has been repaid from the children's money! So, so wrong - legally and also morally.