How should inheritance be split?

[Havingahorridtime]

Me and DH are going to be making wills soon. The only real asset we have of any value is the house. Currently equity stands at around £300k with the house value being around £370k.
DH has 2 grown up children from a previous relationship and we also have children together. When DH split from his ex partner he gave her his share of the equity they had in their house (current value around £400k) and it only had a tiny mortgage left outstanding (around £20k at the time). The understanding was that his ex would live in the house with the children and the house would eventually be the children's inheritance. However, 15 years later, the children left home and the house was remortgaged many times and was eventually repossessed meaning that there is nothing for the children to inherit.

We have to decide how to split our house in the event that we should both die. To me, It seems fairest to split the house equally between all of the children (both his children and our joint children), however, my husband thinks that his older children are now adults and he has effectively already given them a fair share of inheritance and it wouldn't be fair in the younger children to have less. He thinks his older children should get a token inheritance of around £20k each and the remainder should be split between our younger children.
I think secretly he is concerned that any money left for his older children will get used to support their mothers unaffordable lifestyle and he doesn't want that.
Which arrangement seems fair?

It's highly unlikely you would go together. How would the split go then? Are you going to leave your share in trust for the DC

You can't leave your half to your dh stating that share must go to the dc when he goes. Wills don't work like that.
With blended families it's complicated 😕

It sounds like your not doing this anyway, but be wary if stating "A and B should get 20, 000 each".
If you survive another 40 years, that 20k is unlikely to buy what you envisage. It can also cause problems if you don't have much left after, say, care home fees. It can leave the other kids with very little. Percentages or proportions are better divisors.

YY please go and see a sollicitor to see exactly how things would go if one of you dies first (the most likely situation), esp for the child with disability.
You need to protect this child but also the remaining spouse first.

Yes. We were solely thinking about the likely scenario if we both died together (as unlikely at that might be). If one of us went first then the other would inherit the entire house as it is currently in joint names. we don't have any other assets so we wouldn't exceed the limits for automatic spousal inheritance. It is a bit morbid thinking about death and both of us going together but with dependent children it is something we need to do just for peace of mind.
Sandland, yes we are thinking of proportions rather than fixed amounts as obviously the value of property can fluctuate.
notreally we haven't really thought about putting our share in trust should one of us go first. I suppose we were just trusting that the remaining one would do the right thing by the children. It is something we need to really think about though.
Not sure I want to be a grown up anymore as this isn't easy at all - I might go and do some colouring in my blanket den instead

Another thing to look at is buying a life assurance policy. I lost my partner suddenly (no will) and was left with 3 young DC. I have taken out a policy of £120,000 at a cost of approx £20/month.

This will cover the funeral, inheritance tax on my house.

I have also organised guardians for the DC.

Yes, we already have life insurance. We took it out well over a decade ago but it's enough to cover the mortgage, funerals and some left over should either or both of us die.

I think the ages and the added information about the children does make a difference to how you would split the assets and don’t forget you can change wills.

There Is a 12 year gap between my sister and meand for a period of time I would have inherited more when she was an earning adult with a good job and I was a dependent child. My parents’ will is now 50:50 as we are both in the same situation. I don’t think she ever resented that as she recognised our needs would have been very different.

Your dh made a mistake gifting the house to his x. If he wanted her to live there until the kids grew up and then for them to inherit it, I'm sure there are legal ways to ensure that. He gave it to his x, she was free to do what she wanted with it. You cannot punish the kids for that.

It is fair to make adjustments for substantial differences in financial help he has given his children such as paying for uni.

Yes he made a mistake but it's done now and can't be undone. He was clearly foolish for thinking that their mother might actually want to do the right thing by her children.
Anyway we have decided that my SC will get 10% each of our house. Our 2 able children will get 22.5%each and our disabled child will get the remaining 35% as he will need it the most. Hopefully it's all hypothetical and the wills won't be needed for many more decades.