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Original poster

Step children and inheritance

144 replies

A1056056 · 14/05/2018 21:09

Hi all
Just wondering if any one can offer any advice. Me and my partner have spilt up over the way we decide to split our inheritance between our children.
We have no children together. I have two and he has one from previous relationships. There is no plan to have any children together.
After lots of back and forth last year he decided to move in to my house. Then the word inheritance came up, something that had never crossed my mind! I knew we would need a pre-nup but never really thought about anything else.
We both have a mortgage on each of our houses.
My OH stated that if we kept both houses, moved in to mine and rented his house our assets would be combined. Therefore in regards to inheritance as he has one child his 50% would be given to his child and my 50% would be split 25% each to my children.

The issue that I cannot get my head around is the fact that as it stands now (we both have life insurance to cover the cost of our mortgage if we died)
My children would get half of my property which is £117500 each and OH's son, would get the full amount of his which is £135000.
Coming together the amount is £370000 (I will work it out as if we are keeping both houses)
Under OH's way of thinking his son would get 50% of the property estate and each of my children would get 25% each:
OH's son now gets £185000= 50%
My child now gets £92500= 25%
My child now gets £92500= 25%

OH's point of view is that he is taking on half of my liability now and vice versa with me and his house and therefore he owns 50% which to him means his son should get his full 50% and as I have two children my 50% would be divided therefore getting 25% each.

Our children are still relatively young all still at the later years in primary school so we would becoming together and taking on each other's children, although his son only comes every other weekend and my children go to their dads every other weekend. So I guess I assumed we would be a new family unit and each child an individual in our lifetime and after we have gone. My thoughts are the money should be split 3 ways as we are taking things on together as a family and that's how it should end too! My other half is soooo adamant that he is right that he can no longer be with me as he says 'isn't it enough that I'm taken on your children, putting a roof over their heads, paying for food etc' and then he says I expect him to give my children some of his child's inheritance! This is really painful to hear as I really do not want to take any of his child's money I just feel my way seems more fair for everyone but he says my way is only fair for me and my own!
We have both spoken to financial advisors, however this has been separate (our relationship hasn't really been in the right state to go together) and the one I spoke to agreed with me and said that is how most combined families do it. My OH's financial advisor said he was right and you work for your blood and pass on to your blood.
My oh did state that if he had a lot more money then maybe he would split things more towards my way but as he doesn't he has a duty of care to provide for his son!

A trust fund has also been discussed to ensure that neither of us would be in the position of after one of us died all the joint assessments would be sold straight away and that the surviving spouse would be able to live in the family home and that a certain amount would go in to a trust fund for whichever child's parent that died first.

Everyone we speak to has their own opinion and we are getting know where!
I am really starting to doubt my way is right as my oh is so adamant that he is right and that he can't be with someone that thinks it's right to tell someone what they should do with their own money! I am really concerned that I'm wrong and that if we never get back together and I meet someone else and they think the same as my oh I will have massive regrets.
I would like to know people's thoughts and if i am having the wrong outlook on how I have worked out the figures and percentages as it does not sit right with working out the amounts as 50% and 25%/25% but if this way is financially fair for everyone then I would love to know.
That is all we want, for it to be financially fair for everyone. The problem is deeming whose way is fair for everyone and that is where the conflict between us is happening.
Thank you for reading! Hopefully there is people in our situation that can help!

OP posts:
Mannix · 14/05/2018 21:16

There is a third option.

It is to keep your money separate rather than pooling it (including agreeing fair percentages of the property based on what you've each put in). Then in your will, all his bit goes to his DC and your share goes to your DC.

Maybe you could both agree on this as no one could be accused of taking anything from the other?

catherinedevalois · 14/05/2018 21:17

I agree with you. You both need to ring fence the assets you had prior to the relationship.

Mannix · 14/05/2018 21:18

Btw if you do pool your money then I think you are right as you should then think of it as a family unit. He seems to want the best of both worlds at the moment - pooling the assets but then giving his DC a larger share.

Fflamingo · 14/05/2018 21:20

It sounds like you are pooling more than him so his DS gets an increase in inheritance and your DCs get less. but are you going to be kept by his much bigger income if you live together? Long term he could then pay in much more than you so maybe he has a point.

AJPTaylor · 14/05/2018 21:21

If you are genuinely throwing everything in the pot together it gets split equally 3 ways.
Or keep it seperate finances.

LadyLapsang · 14/05/2018 21:21

I don't think there is a right answer, only what you two agree. I am married and a lot older than you and I would hate it if my (adult) child's future was compromised, but I can appreciate the situation would be different in your situation because the children are still young.Are you financial equals in terms of earnings etc.?

expatinscotland · 14/05/2018 21:21

The only thing right here is that you split up, because what's his is his and what's yours is his son's, too. Nope outta there. Don't let him guilt you into anything.

AmazingPostVoices · 14/05/2018 21:22

he says 'isn't it enough that I'm taken on your children, putting a roof over their heads, paying for food etc

This ^^ would be enough to give me serious concerns. It’s your house. He isn’t “putting a roof over their heads”

I think being in the same page financially is really critical in a relationship.

I’d also be considering what happened should you die before him? It doesn’t really sound like he’d treat your D.C. fairly.

I’d walk away personally.

ineedabagformyhippo · 14/05/2018 21:23

I think he is totally right, sorry. If you died today your DC would get half of your estate each, why should they also get some of his estate? Assuming you half roughly equal assets...what you're saying is because you have 2 children and he only has 1 your family should get two thirds of all the assets?? How is that fair? I'm not surprised it's a deal breaker for him

ZibbidooZibbidooZibbidoo · 14/05/2018 21:23

I think you either both ringfence your independent assets (your houses) and anything that is to be inherited if you both die has to be split three ways equally.

ZibbidooZibbidooZibbidoo · 14/05/2018 21:24

Sorry I mean anything other than the houses.

VivaKondo · 14/05/2018 21:24

Yep. I would ring fence your assets (so yours in one side, and his in the other) and then out whatever you are building TOGETHER in the common pool to split into three.

Tbh, if your dcs are all primary school then you still have a lot of years together to build up something and it’s likely/hopeful that whatever you have at the time of the inheritance will be much bigger than what you have atm.

AFOS11 · 14/05/2018 21:25

Really tricky subject so I’m not surprised you are arguing over it. Money and death are so emotive, as are the fears of what will happen to the children.

I would suggest the following:

Your children get 50% each of your house value as it is today, and his son gets 100% of his house value as it is today as the starting point for the inheritance I.e the split of £370k

Then

Everything over that value be split three ways I.e. since you got together, equally between the children. So if your houses are worth a combined £500k at time of death, your children each get £117.5k plus ⅓ of £130k

His son gets £135k plus ⅓ of £130k (£500k - original house values)

That makes it fair based on today’s value and gives them a guaranteed split since you became a blended family. No one is better or worse off than before you got together...and all children benefit from contributions made by both parents to your family.

Definitely do a trust to allow the remaining parent to live in the house if one of you dies first.

Good luck!

Vixnixtrix1981 · 14/05/2018 21:26

My concern would be if you married. Does he not get all your estate then anyway if you die first? (Sorry I've never been married so don't know). But then potentially his kid could get everything and yours nothing?

VivaKondo · 14/05/2018 21:28

he says 'isn't it enough that I'm taken on your children, putting a roof over their heads, paying for food etc
I would have a big issue with that too though.
He isn’t putting a roof over your dcs head. You have a house.
He isnt feeding them (i assume you are working or have a source of income to be able to feed them even if he isn’t ‘there’).
His reasoning is going further than just the house you both have. It will spill into whatever other assets you might build up together, which he will consider his as he is the one to ‘bring all the money/assets’.

I would tread carefully on how to actually split nit just inheritance but also assets etc...

Original poster
A1056056 · 14/05/2018 21:34

I had the proposition of living together in my house with OH renting his house out and keeping our houses financially separate. This would mean each child gets what they would now and also in the unfortunate event that we were to separate then it does not get messy and each of us would have a roof over our head.
This is something OH is against as his house would be liable for capital gains tax and also he would feel like he is renting off me.

OP posts:
Original poster
A1056056 · 14/05/2018 21:35

We would have a will/pre-nup in place so our money would go as we please.

OP posts:
C0untDucku1a · 14/05/2018 21:40

I wouldnt marry his or pool anything tbh.

Putting a roof over your kids head? In your house?

I dont understand the trust fund paragraph. If you died in 5 years he would be able to stay in the house until he died? Would you children then get nothing until then? Or if you fird and you were married wiulf he not inherit it all? So viild then just give 100% to your children?

C0untDucku1a · 14/05/2018 21:45

Sorry that made no sense :/

C0untDucku1a · 14/05/2018 21:45

What would happen if you split up?

VivaKondo · 14/05/2018 21:51

What I hear is a lot about what he wants to do and how x organisation is benefitting him.
So he doesn’t want inheritance to split equally because it’s unfair in his ds.
He doesn’t want to feel like he is renting of you or that he has to pay capital gain.
In effect, he wants it all to his own benefit.

What about you and your dcs?
What would be the best organisation for you?

SunshineAfterRain · 14/05/2018 21:56

So if yous separate
Your dc get- £117500 each
His dc gets-£135000

If you stay together
Your dc get-£92500
His dc gets-£18500

He want his cake and to eat it too.
He wants to take the risk of being a family without the risk.
He is showing no matter how merged you are as a family, his son will always come first.
Each child should get a third of the full estate ie the 2 house values split into 3.
He is happy taking money away from your children to benefit his own.
He is setting the tone for the rest of your lives together as a 'family' and I would be telling him to npt let the door hit him on her arse a on the way out.

Happinesss · 14/05/2018 21:57

I agree with your partner or ex.

Me and my partner have 1 house together (so nothing to exciting)

He has 1 son from a previous relationship.

We have 2 kids together.

Our house will be split that my half goes 2 ways between our kids, his half gets split 3 ways.

DSS - 16.5%
DS - 41.5%
DD - 41.5%

Last .5% will go towards fees

Original poster
A1056056 · 14/05/2018 21:58

He does earn more than me probably about £300-£400 per month.
I would never expect him to pay for my children as in birthdays, Christmas, clothes, school trips etc. I guess I would just expect to split the household bills 50% each

OP posts:
Original poster
A1056056 · 14/05/2018 22:02

Happinesss- I agree with you to a certain extent as you have children together so your children have no other parents to inherit from and your other halves son presumably has money from his mum.
Ours is slightly different as all children will have inheritance from other parents other than us and as well as us

OP posts: