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Original poster

Considering leaving our money only to grandchildren

119 replies

parsagadae · 10/05/2020 07:55

Hello,

Just wanted some quick advice from people on here. My husband and I have been retired for some time. We are fortunate to have lived financially secure lives due to buying at the right time, inheritances, etc. My husband headed up his 3rd generation family business, which he sold on for a pension pot (it was no longer really profitable by the end)

We have two children, both put through private schools, university etc. DD1 lives abroad and is a house wife due to ill health/ husband's (very lucrative) demanding job.
DD2 lives nearby and opted for the simple life.. modest house, old cars, nothing flashy etc but lots of time for her allotment! She's going to retire early.

We have four grandchildren, two from each daughter (they are approaching 50 so no more coming!)

We are considering leaving all our money to our grandkids. If we did this, it wouldn't be gazillions but probably about £300k each. They have it so much harder than we did (no really!). House prices anywhere decent are ludicrous, and they will be leaving university with huge student loans.

Has anyone else's family had this set up?

OP posts:
TriangleBingoBongo · 10/05/2020 08:32

If my parents did this I would be absolutely gutted. Rightly or wrongly

I’d be quite happy if either my parents or in-laws did this. I’d be glad that there’s only one lot of IHT to be paid.

We are financially comfortable and both me and DH are conscious of how difficult it is to get on the property ladder etc. It would take a sense of pressure of us if we knew our children’s house deposits were sorted.

Rainbowqueeen · 10/05/2020 08:33

I agree with @Northernsoullover.

No one can predict what would happen in the future.
I’d leave some to the GC but most to the DC

TeenPlusTwenties · 10/05/2020 08:35

How old are the GC?

No way would I want my DC inheriting 300k before the age of 25. it could completely throw them off, however sensible they appear now.

Discuss with your own DC. There are various options including:

  • leave to DC to do with as they see fit
  • leave to DC but say you want them to be generous to GC
  • leave in trust for GC but with DC as trustees
  • leave to GC unconditionally so they get at 18

Missing out a generation helps for IHT, but I really thing leaving to GC (unless they are already 25+) could be a disaster for the GC themselves.

OttilieKnackered · 10/05/2020 08:36

Jesus with that much money you could give them all a small fortune.

Only on MN would an unearned windfall of £300k be described as not much. Confused

okiedokieme · 10/05/2020 08:39

My brother suggested this for my parents- I felt guilty because I'm the one with kids but my brother pointed out that my DD's are his beneficiaries too and he doesn't need the money. It's not been changed yet (currently split between us) but might be better, just hope it won't be for years!

Soontobe60 · 10/05/2020 08:39

Do you have a savings pot that you can access now? If so, why don't you look at gifting money to your grandchildren now, as it sounds like you'll have to pay IHT if you're that well off. You could give each of them enough for a house deposit when they are at that point of buying.

I wouldn't automatically bypass my children for my grandchildren, but I wouldn't give all my money (if I had that much) to my children alone. I'd probably give a quarter each to my children and split the remaining half between grandchildren. So £300k to each child and £150k to each grandchild.

user1487194234 · 10/05/2020 08:41

It's your money, but worth bearing in mind it could cause issues going forward
For anyone in Scotland bear in mind children have a right to claim the moveable estate regardless of what is in the will

Bridecilla · 10/05/2020 08:41

This happened to us but with my aunt. Dads sister but much older so she really was more of a grandma and was a mother figure to dad as he lost his parents when he was young.

She left her money to me and my siblings (£75k each) and, although he didn't say so Dad was gutted. Not really about the money but more the oversight.

My siblings and I immediately decided to split it and each gave some of ours to dad so that the split was 4 ways instead of 3.

Mummyoflittledragon · 10/05/2020 08:42

The money for your dd, who is going to retire early could be life changing. As for your wealthier housewife dd, nothing is sure. It would be better to give a lower amount, eg 50k to each of the grandchildren, which would set them up for university and the remainder to your dds.

In any case, I think you need to speak to your dds. Not giving them anything gives a message, which may be very hurtful.

Patch23042 · 10/05/2020 08:43

Talk to them.

I agree with PPs, the unwell daughter who doesn’t work could find herself in a difficult position if the high flying husband ended the marriage, depending on the local laws. The other daughter could have modelled her retirement plans around an inheritance, irrespective of her unmaterialistic lifestyle.

It may be better to leave the grandchildren enough for a house deposit each, but no more.

Nonestopcaberet · 10/05/2020 08:43

One of my mums friends did this. Left her son out of her will as he had a great job, lovely house fantastic life etc, she left her money to her two GC who were around 18/20 at the time.
Her son lost his job. Had to sell the house, now really struggling for money, unable to find a new job. Meanwhile GC’s don’t care and are frittering the money away on holidays, cars etc.

Blackbear19 · 10/05/2020 08:43

I wouldn't skip the generation. They are in their 40s so I'm going to assume the children are still very young.

Young kids / teenagers / early twenties big pot of cash could be a disaster. It is likely to be blown away on stuff (cars / car insurance / holidays) with the parents picking up the tab for uni fees etc.

Give their parents there place and allow them to help the kids out when the timing is appropriate.

MysteriesOfTheOrganism · 10/05/2020 08:43

Absolutely not! Your will holds your very last parting words to your children, your last summary of how you feel about them. Removing them from the will says "I do not value you." Do you want them to live with that for the rest of their lives?

Undervaluedandsad · 10/05/2020 08:45

I would want to be sure both daughters are definitely set up financially and it’s not an assumption. They may be relying on inheritance for a more comfortable retirement and may have their own thoughts about how they would provide for their children with an inheritance.

HeddaGarbled · 10/05/2020 08:46

I wouldn’t. I’d leave a modest amount to each grandchild and then the bulk to your daughters. They can gift or bequeath it on in turn if they choose and are able to.

Flamingolingo · 10/05/2020 08:47

My grandparents did this - amounted to just shy of £100k each to the grandchildren, and very welcome it was too. It’s a brilliant idea. But I think your estate is large enough to just split it 6 ways between your daughters and your GC. Your DD1 might be happy being a housewife but she might also not have the independence to leave if she wanted to, your DD2 might like to live frugally but might also like the security of the inheritance. They’d still be getting £200k each so a substantial amount

PrinnyPree · 10/05/2020 08:47

Can you just not split it equally between your children and grandchildren? Your children could always choose to pass it on to their children if they felt they didn't need it. This way there won't be any sore feelings or second guessing why anyone was left out of the will. Flowers

tara66 · 10/05/2020 08:47

It's good idea because the money will not be subjected to the potential 40% + 40% = 80% IHT if it goes through 3 generations. If GC are young it can go to Trust saying they get money at 25 or 30 - but there are also taxes on Trusts. Also taxes will go up after CV an so IHT may increase.

KittenVsBox · 10/05/2020 08:48

How old are the grandkids? I think that would be my starting point.
I also agree with some of it going to your daughters. Maybe split it 6 ways. Or split it in half, with one half divided between your daughters, and one half divided between the grandkids.

Legoandloldolls · 10/05/2020 08:48

My mums will leaves her money to me and sis but I'm thinking of giving it straight my kids. I'm 46 and still living g in a rented house. I dont want that for my kids.

We do own a house but we are extending it. Never lived in our own house yet, but it's in the pipeline

Our parents have always been financially secure but never helped us ( I know they ate obliged too, I just personally dont want to be the same)

I dont want my kids to hit 40 and still not afford a secure life.

Thankssomuch · 10/05/2020 08:48

Agree with mysteriesoftheorganism. It would be an awful thing to do.

HauntedGoatFart · 10/05/2020 08:48

No way would I want my DC inheriting 300k before the age of 25. it could completely throw them off, however sensible they appear now.

...this, tbh. Had I come into any money in my early twenties, I would probably have blown it if I had sole control, and I say that as someone who has managed their money just fine and perfectly prudently since becoming independent. But it's dangerous IMO for a young person to never have to really learn the value of money and what it takes to earn it. I don't think there's anything wrong with your plan as long as your DC agree to it, but I would take steps to avoid your DGC inheriting too young. Perhaps for it to be held in trust until they are 25, or similar.

NOTANUM · 10/05/2020 08:49

It's a bit of a kick to your DC really. Unless they're fully behind it, it could cause resentment and maybe even cause them to fall out with their own DC.

Blackbear19 · 10/05/2020 08:49

Nonestopcaberet that's rotten.

I honestly don't think young people appreciate the value of money or how to use it wisely to set themselves up for life.

Shopgirl1 · 10/05/2020 08:50

I would be very upset if my parents did this.

You mention your financial security has partly come from inheritance. I don’t understand why a parent would not want to do the same for their child if in a position to do so. In your case you can do this and still help the grandchildren out if you wish.