Will decisions

[Willconumdrums]

I'd really appreciate people's thoughts on how they would set up their wills in line and DH's circumstances. DH and I have two young primary age children and he also has a teenage DD from a previous marriage. Asset wise we own the following
Flat in London - bought by me before we met and owned in my name, currently rented out, worth circa £350k
House in a small countryside town - DH's former marital home, currently rented out, worth circa £300k
Our family home - owned jointly, worth circa £500k and whilst I originally put down more of the deposit I do feel it's owned 50/50.
We have circa £50k savings that I feel are jointly ours but these will rapidly diminish as DH is about to be made redundant with no redundancy pay (less than 2 years service) and our DC are in private school so these will be needed for school fees until DH hopefully gets a job (not anticipated until next year). DH will also continue to pay maintenance for DSD out of these savings.
When I have tried to broach the subject of wills in the past, DH is of the view that all 3 children should equally inherit everything we own. Personally I feel differently, I have a good relationship with DSD but would like my inheritance to go to my own children. My preference would be for our home to go to all 3 but for my flat to go just to my DC and DH's house to be split between his 3 DC. With any savings I think that our 'halves' should be split again between our DC. I'm curious as to how other people would approach this. Thanks

Your flat, should only go to your children, and the former house should be split as your husband see fit, 3 ways in my opinion as they are all his children.
Your now house should be split 50/50 and then you both leave your own half's to who you want.
The savings I would be questioning on paying full maintenance as that is what you have both built up, and could dry up very quickly on only one wage.
I am sure some will disagree with me on this.

Are there likely to be assets coming from the other side of DSD's family?

@MrsTerryPratchett DSD's inheritance will be less from her mother's side.

Your house to your kids. Savings go to all three. His house to all three. Your joint house to all three. Presummably there will be some inheritance for his first child from the mother (does she have more children too)?

Your flat to your own 2 dc, his former marital home to his eldest dd - this was something built up as a couple providing for what was their family, not your subsequent dc - your current home split equally between all 3. They are all his children but any other split would leave his elder child grossly worse off.

Regarding the savings, is there something that they will be left to each other as its unlikely you will die together and then what's left to be split in 3 or in half and you both stipulate what to do with your own half?

I think your suggestion sounds very reasonable.

The only thing I wonder is did DSD to to private school/your DH pay the equivalent of half of this plus other expenses in maintenance? If not (and he contributed to half your children's private schooling) I would suggest that this could be considered in the will.

I think I agree with Eileen, so his former home goes to his eldest daughter (as she lived there?), your flat to your children and the current house split 3 ways?

I feel it's always dependant on the set up of a family. My eldest is my DH step dad, I work very few hours and even that's only a recent thing so I was a SAHM for over 10 years to allow DH to progress with his career with no childcare issues. All money in the house has come from DH previous property and his wages, however our intention is that everything will be split between our 2 DS's equally. However DH has effectively brought DS up and there is very little money in his dads family so he's unlikely to get much of an inheritance from there.

I know quite a few families who have similar quandary's to you OP, tricky isn't it?

Thanks for all your comments. In relation to some of the questions raised:
DC are only able to attend private school as I have a well paid job as well as DH (well for the next month or so). DSD lives in a small countryside town and her and her mother's preference was to attend the local secondary school. DH earnt enough for us to live on but we can only afford the school fees because I work too.
DH and DSD's mum split when she was very young. His house has required a lot of money spent on it over the past few years (mortgage payments, big repairs etc often in excess of £10k per annum) and this money has come from our joint savings.

@namechangenumber2 it's definitely a quandary and not an easy thing to resolve.

Why don't you speak to an estate planner?

I did my will last year and put everything into a family trust so no one can touch it except my DC.

They were so helpful and knowledgeable.

DSD's mum does not have any other children.

Thanks @passthemustard thats a good idea. Can I ask how you found the one you spoke to?

I think this is easy.
Just your house gets split evenly between just your children
Just his house gets split evenly between all of his children

Savings + joint house are halved (half yours and half his)
You're half is split between just your children
His half is split between all of his children.

Your kids will of course get more than dsd, as they should. She will have inheritance from mum and even if she doesn't, she isn't your kid...

@willconumdrums

ashermarks.co.uk/

This is the lady I used. She was in a business network group with my DP and she did his mums power of attorney stuff too. She's very good, was a barrister but moved down to the South West for a more relaxed life!! Obvs south west based but I know she does Skype.

Highly recommended

I've actually just amended my will to remove a gift of property to my DP! Haven't told him yet 😬😬

I agree with eileen
Your flat to your DC
His house to his DD
Current shared house between all 3 DC equally
I wouldn't think about savings tbh for the moment.

Are you planning for the children to inherit directly? Or are you going to leave things to each other in the first instance? I'd be leaving the family home and cash to each other so that you can run the family / have a home / be financially secure.
Working on the premise that the family home is a genuine asset or not mortgaged what makes sense is family home willed to each other, then your house to your 2, and his house to do with as he pleases.

I'm personally of the school of thought that marriage means joining assets and accepting children. Presumably you didn't have the conversation before marriage because it didn't occur to either of you that the other one wouldn't feel the same. Id handle the conversation carefully as he is probably feeling quite disappointed.

@Love51 you're right, this is something we should have discussed years ago and certainly before we got married and had children. Whilst I can't change the past, I do wish we had done.

@passthemustard thanks for that. I'll definitely look into it. I've also realised that this will all become even more complicated when my own parents die as I will likely inherit around £200k+. My parents have a good relationship with DSD but realistically only see her 2 or 3 times a year whereas they see our DC more regularly. My DB has recently suggested to me that I ask my parents to leave my share of their estate directly to my DC and effectively skip a generation. I had planned to investigate this further but then DH was told he'll be made redundant in about 8 weeks time which has left our day to day financial position much more uncertain than we previously thought.

It sounds (I know assumptions are being made!) that both you and your husband contribute on some equal basis towards providing private education for your children, and that DSD is state educated.

So I think that unless your DH contributes that same amount on top of usual maintenance expenses for DSD that DSD should inherit the marital home alone. Also nice that she gets the home she is has a link too. Your children get get your flat, and all three share the main residence and any savings.

Sorry, obviously should read ex marital home

You need to consider:

If you die first

If DH dies first

What happens if either of you remarried after death of spouse

If you die at the same time

If you all (you, DH, all kids) die together ie car/plane crash

It’s also worth bearing in mind whether you or DH would be due any future inheritance from parents/family and also what would happen if any of the properties are sold before you die. Would it be easier to leave your estate in shares between your children and DSD such as 2:2:1?

Also keep in mind IHT implications (ie 40% on your London flat - could your children afford to pay that, or would there be sufficient savings to pay it?)

If you and DH do not have Wills, you die intestate and everything goes to your next of kin - ie DH....

Scenario 1 (even split of everything)

Assets (taking out savings as you think they’ll be spent so £350k + £300k + £500k) £1,150k

All kids get £383.333k

Scenario 2 (you will your assets to all your children, DH wills his to all his children. I would say your assets are what you each entered the marriage with and then 50:50 of assets accrued since marriage. Not sure on the exact figures as you said their was a mortgage on your DH’s house which you then paid half of once you married)

Your assets: £600k split between 2

DH assets: £550k split between 3

Your kids: £483k each
DSD: £183.33k

In your DH’s scenario you are effectively giving your DSD £200k (or more depending on how much mortgage was left on DH’s house) from your children’s inheritance.

I definitely wouldn’t do that.

@HeckyPeck yes that's how I feel. All 3 properties have mortgages on them with around 10-15 years to go.
This is definitely one of the hardest bits of step parenting - on one hand you're supposed to respect the boundaries of your DSC having 2 parents whose role is to lead on the parenting and decision making whilst you keep a respectful distance but in the next breath you're expected to treat all DC the same and let your DSC inherit equally potentially to the detriment of your own DC.

I think OP had it right. Each parent should treat their own children equally. She divides her assets (and her half of their joint assets) between her two children and he divides his assets and his half of joint assets between his three children.

Eileen's suggestion leaves the stepdaughter a lot better off than the OP's children because she would inherit a whole house plus a third of a bigger house. The OP's children would only get half of flat plus a third of the big house.

His daughter may also inherit from her mother, so could end up with 2 1/3 houses.

The good thing about a family trust is it removes the IHT that would otherwise be due. The DC might need to pay income tax on anything they inherit but not IHT.

My trust says that if I die my DP (or my eldest DD whatever the circumstances are) will have parental responsibility for the younger kids and they can all live there until my youngest is 21. After that they can decide to continue living there or sell up and split the profits. DP cannot move another woman in and he cannot inherit the house. All other assets are to be used for the benefit of the children.

Even more than that anyone my children marry also are unable to inherit any part of my estate. I have stated that my ex husband and step daughter are wholly excluded from any part of my estate too 😬

I really hope that I don't die though. If we all die in a plane crash or something my mum and/or my brother inherit everything.

My estate is simpler than yours as I'm not married to my DP we have no joint assets and my DC are not his and he has no children. All he gets from my death is to look after my children whilst living in my house, I actually think I've given him a grace period of up to two years after my youngest turns 21 to find another property to live in! I'm so generous 😂

Hi Op - well firstly I would ringfence your flat for your 2dc - end of.
Secondly - for what it's worth I would be on the flip side of this in that my exh has our three (youngest 14) & two more with his dw (5 & 4). Initially I would have been inclined to agree with @EileenAlanna & say your dh's house go to his dd1 as it was pre your marriage, but the more I think on it and the more I think on my exh's situation the more unfair I think that would be.
Exh & I had a large property which wasn't the family home so we both come out of our divorce with a large financial asset. Whether exh still has this money or if he's reinvested it - if he was to only leave it to his first three children as the asset was pre his second marriage, I actually think it would be dreadfully unfair on his other two - HE chose to have more kids so they are ALL his responsibility & HE should treat them equally. On top of that I think his dw is only obligated to provide inheritance for her two children - my children have two parents as do hers and the only person responsible for all 5 is exh.
So to that end I would say:
Your flat goes to your dc.
Dh's house goes to his 3 children.
If you consider the family home to be 50/50 & are happy to split it 3 ways (as in sdd gets 1/3 equal to her sisters) then do that (I think her getting 1/5th & her sisters getting 2/5th's each would be a bit petty).
As to savings: I think it's very generous for you to allow joint savings to go to maintenance & if you're happy to do that work away but I wouldn't feel any guilt about you being able to send your dc to private school - that's coming from your wage.