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Original poster

Leaving money to grandchildren - uneven split between siblings?

47 replies

BrummieMummie · 26/06/2012 13:22

Am posting this on behalf of an elderly neighbour - I to my knowledge have no grandchildren yet!

Neighbour's children are both relatively financially secure and so after discussion with them she has decided to rewrite her will to split her estate between her grandchildren. Her DD has 3 children and her DS has 2. Would just like a straw poll as to what everyone thinks the "fairest" way to split this money.

a) Split equally between the 5 grandchildren
b) Split her DD's "half" 3 ways and her DS's "half" 2 ways

I know what I think but neither seems entirely "fair" iyswim.

TIA

OP posts:

EverybodysSleepyEyed · 26/06/2012 19:26

I was thinking more that if she has a large amount to leave she may want to consider IHT. If she has less than the threshold it doesn't matter.

She may wish to consider lifetime gifts eg if a grandchild goes to uni and she wants to give them money towards fees.

If she does want to give lifetime gifts then she should consider the impact on splitting in te will

Swatchdog · 27/06/2012 07:44

Option a is the only fair way!

I'm one of 3, and both sets of cousins on my father's side are one of 2. In our case the money was split between the three children (my father and his siblings) with a portion of that going to the next generation. My cousins each got a half share and we got a third share. It does grate a bit, as it doesn't seem fair to be penalised (again) for having an extra sibling. We made sure when we were discussing my parents' wills that all grandchildren were treated equally and that monies paid to them came from an independent pot so as not to penalise those with children.

financialwizard · 27/06/2012 12:40

Split between all surviving grandchildren is the fairest option in my eyes. However, I would also suggest she seeks independant legal advice is she has anywhere near £325k just in case some estate planning is necessary.

ceeveebee · 27/06/2012 13:02

If the DS is left 1/6 of the estate, depending whether he spends it or not before he dies then this will get left to his DCs so if he is already at:over the limit this would mean additional tax would be paid.

I think it is fairest to leave 1/2 the estate to one set of GCs and 1/2 to the other. The normal rules (if she did not leave a will) would be equal shares to each of her DCs so it's only fair.

ceeveebee · 27/06/2012 13:03

Eh? Where did that grin come from!

MummytoKatie · 27/06/2012 14:37

It's slightly different but when h & I were doing our will we decided that if h, I & dd all died then we wanted the money to go to our brothers rather than our parents. (As parents are already very comfortable.)

H has 2 brothers and I have 1. We debated for ages but eventually decided that in the event of everybody dying other than our parents we wanted the parents to end up with equal shares. So my brother gets 50% and his brothers share 50%.

DilysPrice · 27/06/2012 14:57

I think that if the child with more children has lots more money (if I'm reading it right?) then she should definitely go for option b. That way the DD's children get less each, but it doesn't matter because their parents will be able to supply house deposits etc.

Original poster

BrummieMummie · 27/06/2012 17:11

I think I'm more confused now than I was when I posted this! Interesting to hear the range of opinions though.

If I understand inheritance tax correctly the DS and his wife between them are allowed to pass on double the tax limit without incurring inheritance tax; according to my neighbour they are certainly nowhere near to that limit. They own their house outright so I imagine may be close to the £325000 but I don't know.

DilysPrice I think that was the thinking behind option c (don't know whether you've read the whole thread) - that as well as giving money straight to the grandchildren the DS would get some money so he was able to help with uni and house deposits for his kids in the same way the DD will be able to. The DD suggested this so I don't think this would cause resentment between the DD and DS. It seems quite unfair to deliberately give some of the DCs less than their cousins outright (as other posters have said) just because they have more siblings.

OP posts:

AMumInScotland · 27/06/2012 17:34

I think she'd be better to leave half to each of her children, but explain that she'd like it to be used for the grandchildren. Then the next generation can make sensible choices at the time she dies and the money arrives.

The grandchildren may be lovely people, but there's always a risk that one or more may have a "wild" patch in their late teens or early twenties, and giving them the money outright at that point may not be the best thing for them.

So it going to her children would allow them to, say, hang onto one child's "share" safely until they were ready to make sensible use of it.

DilysPrice · 27/06/2012 17:41

I did read about option c, but actually I don't like it because it has an air of being patronising to the "less successful" sibling. Option b has the same effect, but is justifiable even if you ignore the money thing (consider what you'd do if one of the children were childfree), so it's a more diplomatic way of your friend channelling her money where it is most needed.

ItsjustSue · 27/06/2012 17:50

If she wants to leave money to her grand children then I would think splitting it between the grandchildren equally would be what I would do.

The relationshio is Grandparent to Grandchildren. Who evers kids the grandchildren are, is irrelevant imo.

She would probably be advised by a will writer to consider the fact that by the time she passes on that she may well have more than 5 grandchildren.

As neither of her children are to receive the money then I think equal division between ALL grandchildren would be the fairest solution. If she really wanted to, she could leave a certain equal amount of her estate to both her son and daughter before the remainder is equally divided between the Grandkids.

AThingInYourLife · 27/06/2012 18:01

I think option b is fairer.

Original poster

BrummieMummie · 27/06/2012 18:23

Yes that's true about it perhaps seeming patronising to her DS - I'd thought of it more in terms of maintaining the equal split between the two siblings' families whilst giving each grandchild the same amount and hadn't seen it from that perspective.

I still don't like option b though. I can imagine a teenager being quite resentful that her cousin had inherited 1.5x as much from Granny just because she had less siblings. Although I suppose only her and her family really know how the grandchildren would feel about it and it's up to her.

Sue She is very unlikely to have more grandchildren given the ages of the DCs/DGCs involved.

I will be showing her this thread tonight - thank you all for your opinions :)

OP posts:

nemno · 27/06/2012 18:39

I would always recommend leaving it equally to the children. Leaving money to young/immature adults can backfire horribly. I'm thinking about it being frittered away or subsidising a misspent youth, even preventing ambition, rather than perhaps what gran and grandad envisage eg deposit on house, starting a viable business or funding studies. Leaving it to the parents hopefully means they can dole it out appropriately.

The latest story I know of is my son's 23 year old friend who has bought a brand new mini convertible and a pedigree dog but is jobless.

Tigerbomb · 27/06/2012 18:48

My parents had this to face when doing their will

In the end they split it 50/50 between my db and me and we can pass it down to their grandchildren when the time comes.

MY DB has 5 children, I have 2. My DM didn't think it fair that my 2 should get less because my brother had more children. Mind you if my DM had her own way, only her favourite grandchild would have inherited anything

ItsjustSue · 28/06/2012 10:10

She could put it in trust for the DGC until they were 21 but they may still be having a wild time then if so inclined.

I just see it as if she has chosen not to leave money to her kids and to her GC instead then it has nothing to do with who the kids beloing to. I am guessing her love for her grandchildren is equal and this is about her relationship with her 5 GC. Therefore it should be split equally between the GC regardless of who had the GC.

Trills · 28/06/2012 10:23

Leave it to the cats home. Then everyone can be equally outraged.

Ormiriathomimus · 28/06/2012 10:25

a) Split equally between the 5 grandchildren

The money isn't being left to the children themselves so it's irrelevant how much each 'side' get.

OddBoots · 28/06/2012 10:52

Oh this is hard one, I'd go back and forth.

I get a different answer if I think about it from each point of view, I think the only fair way is for the child with 2dc to have one more. There, sorted.

Theas18 · 28/06/2012 10:59

You are posting for MY MOTHER right LOL (no actually she's made her will).

My mother never forgave her mother for leaving money to the grandkids- she had 2 kids and her sis had 3, therefore J was favoured because " she got MORE MONEY" ............. indirectly.

So much bad feeling about what was in the end really a tiny inheritance.

My mums answer to this, as I have 3 kids and my Dsis 2 is to split the spoils equally between the 2 daughters.

I now feel slighted (and am trying not to!) as Dsis isn't short of a bean at all, and I have 3 kids who will all go to uni, and a direct inheritance to them would be used to help fund education.

However, the way things are I bet there wont be much left anyway, so I'm not getting het up about it!

parachutesarefab · 28/06/2012 11:18

If she's leaving it directly to the grandchildren, they should all get 1/5 each. But definitely look at putting it in trust, with them getting some at 21 and some at 25, maybe, with trustees having the ability to allow access to it earlier (uni fees, house deposit)?

Or she leaves 1/2 to each sibling, for them to pass on if and when they wish.

An alternative (d?), which is halfway between a and b is to give
1/4 to daughter
1/4 to son

1/10 to each grandchild

Son and daughter can pass on their share if they wish. More 'equality' between families (son and kids get 45%, daughter and kids get 55%), grandchildren treated equally.

I think it's lovely that she's discussing it with her children

banyan · 29/06/2012 12:58

What Itsjustsue says. She is leaving it to the GCs, therefore who their parents are is irrelevant. If one DC had 4 kids and one had 1, splitting it equally to each side would mean that 1 DGC would get 4x as much as the others which I think everyone would think is absurd. I don't think the principle changes just because the numbers are slightly more even so the difference is less.

She could do a combined will i.e. leave a set monetary amount to each DGC - e.g. £100,000 estate £10,000 to each DGC, and then split the remaining £50,000 equally between her 2 DCs. Then everyone is effectively treated fairly.

I think Option C proposed doesn't help, and is a bit patronising - what if the 'poorer' DC wins the lottery or the 'richer' DC goes bankrupt? Does she have to change the will again to reflect these changing circumstances? I personally think it's better to just decide on something that is about showing equal affection for individual family members, not about shoring up people's bank accounts, compensating people for earning less, penalising people for having more children etc.

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