THoughts on a will and grandchildren?

AnotherJoe

My wife and I are revamping our wills. Ahead of meeting with solicitor, I'd like to get thoughts / ideas on leaving money to grandchildren.

We could leave directly to them, or leave to them "via' their parents, eg say I leave all money to my child A then grandchild B will indirectly benefit from that. If money is directly left to grandchild B instead, then it would need to be in trust until a specific age, which would be 18 or 21 conventionally but could be any age I pick. Then the parents (ie my child) would need to be executor of that money and it would I presume need to be need in trust or similar and someone such as their parent (my child) manage the money. Or I could (presumably) put aside a sum now, lets say I invest £20k in Vanguard Lifestrategy 100,and will whatever is in that at the time of my death, to grandchild with instructions to be kept in that until a certain age / time or other event.

Then there's also the thought of conditions attached to the money. It might be "must be spent on house/ education" etc, is that a good idea? Is it even enforceable in practical terms? A good idea anyway?? Note that the grandchildren are currently very young, toddler age.

The other question is, should you leave money as percentage, eg grandchild to get x% of value of estate, or as specific amount? I can see pros and cons in either approach. And in general what happens if a will says "I leave £x to A, £y to B", but there's not enough money to cover that when you snuff it?

As I say just looking for ideas and thoughts.

Yorkshireman99

Percentages are a good idea for obvious reasons. Trying to limit what the recipient spends it on I fraught with difficulties so avoid it. Anything left to a minor has to be held in trust until they are 18. Leaving money direct also avoids it being subject to IHT on the parent's estate. If you can spare the money now and expect to live at least three years then that can reduce IHT.

theoretica

If your grandchildren are currently toddlers then there might be more born after your death or between writing your will and your death. Would you want them to benefit too?

If you leave it in trust it is a good idea specify for clarity that it can be spent on certain things before 18, such as education, if both child and trustees agree.

gettingtheresometime

H
My Fil's will stated that had my hubby died before him then hubby's share (a %age of the estate) was go go to our son at 21.

However it was also stated that if our son needed money for educational purposes then that money could be applied for.

My view is that if you want to leave money to a grandchild just do it, with or without age restrictions. I wouldn't give a condition on what the money should be spent on - what if they need an expensive operation urgently but there's a waiting list on the nhs but they could have used this money to pay for it privately for example?

bouicca21

And what is to happen if a grandchild dies before adulthood? you have to think through every scenario.

jackyann

I don't think anything covers all eventualities, but this is what we did:

Money for grandchildren goes into a Trust (we have named our children as Trustees). Money not to be accessed until age 25 unless all Trustees agree (to be guided by our known wishes around things like education, travelling, setting up a business, buying a house etc.). All grandchildren adopted or conceived before the oldest turns 25 will be beneficiaries.

We will have to change it should we wish to add any step-grandchildren, and we could extend it (though I doubt it).
It doesn't encompass every scenario, but it does a fair job.
Should a grandchild die suddenly, they are simply "written out". Should they become ill, the Trustees could agree to them accessing money as seems appropriate. You do have to trust the good judgement of Trustees of course.

AnotherJoe

jackyann wrote: »

I don't think anything covers all eventualities, but this is what we did:

Money for grandchildren goes into a Trust (we have named our children as Trustees). Money not to be accessed until age 25 unless all Trustees agree (to be guided by our known wishes around things like education, travelling, setting up a business, buying a house etc.). All grandchildren adopted or conceived before the oldest turns 25 will be beneficiaries.

We will have to change it should we wish to add any step-grandchildren, and we could extend it (though I doubt it).
It doesn't encompass every scenario, but it does a fair job.
Should a grandchild die suddenly, they are simply "written out". Should they become ill, the Trustees could agree to them accessing money as seems appropriate. You do have to trust the good judgement of Trustees of course.

How have you determined how much to leave to the grandchildren? Is it a fixed sum each or between them, or a percentage (divided by all grandchildren or a smaller percentage per grandchild) or or or .....

AnotherJoe

Another related question, in the case where parents are tenants in common and leave their half to the children, with a lifetime interest for the survivor in the house, what happens if the surviving parent wishes to sell that house and move to another?

Yorkshireman99

AnotherJoe wrote: »

Another related question, in the case where parents are tenants in common and leave their half to the children, with a lifetime interest for the survivor in the house, what happens if the surviving parent wishes to sell that house and move to another?

Easy to do for a competent solicitor.

getmore4less

Yorkshireman99 wrote: »

Percentages are a good idea for obvious reasons. Trying to limit what the recipient spends it on I fraught with difficulties so avoid it. Anything left to a minor has to be held in trust until they are 18. Leaving money direct also avoids it being subject to IHT on the parent's estate. If you can spare the money now and expect to live at least three years then that can reduce IHT.

It's 7 years, unless very large amounts, taper relief only kicks in when gifts in total go over the nil rate band.

getmore4less

AnotherJoe wrote: »

Another related question, in the case where parents are tenants in common and leave their half to the children, with a lifetime interest for the survivor in the house, what happens if the surviving parent wishes to sell that house and move to another?

Check the IHT situation with life interest there may be better options like discretionary trusts.