How does inheritance work?

[RandomPants]

I'm bamboozled. Can anyone help?

Let's say Alison and Bob are married. Alison has two children from a previous marriage (Annie and Alan). Bob has two children from a precious marriage (Billy and Bertie).

What happens if Alison dies? Does all her stuff go to Bob? Then if Bob dies, does all his stuff go to Billy and Bertie? Do Annie and Alan get missed altogether in this situation?

It depends what was stated in their wills, but in the case where one half of a couple leaves everything to their spouse, then the spouse can do as they see fit, so yes it's possible for the first person to die to indirectly disinherit their own children by leaving everything to their spouse. this is why people need to write wills- it's not about money- more about personal effects and sentimental items that mean nothing to the children of the surviving partner but a lot to the children of the first person to die

Sorry - meant to add, if no will then the first 125k plus a life interest in half of the remainder goes to your spouse and the rest to your children. However, this is still complicated by things like the house because you can't bequeath your half of a jointly owned house- in most cases, on the death of one partner, ownership of the other half defaults to the surviving spouse.

That's not strictly true Charity, I am Billy, Bob died and left everything to Bertie and I but Alison is contesting the will on medical grounds as if Bob hadn't made a will Alison would have got everything. This is also despite the fact that theyd been separated for years. In a nutshell the law favours the spouse not the offspring of either parent.

It makes sense that the law doesn't expect Bob to be homeless. But I feel quite sorry for Annie and Alan who have had Bob as a step dad since they were small.

Charity your figures are a bit out. The statutory legacy for spouses increased from £125,000 to £250,000 in 2009.
So in the scenario given by the OP on first death the spouse gets the chattels, £250k plus a life interest in half the residue. The children of the deceased get the other half of the residue outright. Under these circumstances the surviving spouse would probably make a claim under the Inheritance (Provision for Family and Dependents) Act 1975 on the grounds that reasonable provision has not been made under the intestacy.
This will of course incur costs and delay the administration of the estate.
If the marital home is held as joint tenants and represents the majority of the estate then it may have to be sold or mortgaged to satisfy the legacy to the children.
Inheritance tax may be due on the legacy to the children jf it is in excess of £325,000.
Just make a will . Problem solved.

I'm not any of the people in the scenario so sadly can't 'just make a will'.

Thank you all for your help!