ensuring family money goes to children

stevet2607

Hope that this is the right forum.
We both have 2 children from previous marriages. We own our home and a comfortable income from pension and investments. For various tax reasons some of our investments are not in joint names. We both want all 4 children to benefit equally after our deaths. We currently have life interest wills which allows the surviving spouse to live of the deceased estate until second death when the 4 children will inherit equally. However we are aware that after the first death the surviving spouse could change their will and leave out the deceased spouses children from their own estate. We have mentioned this to a solicitor who says that a trust could be written but advises us that it could be disadvantageous to us. Any suggestions?

happyandcontented

Have you asked the solicitor why he considers it disadvantageous?

Linton

Have you thought through every eventuality? What happens if the surviving spouse remarries? What happens if the surviving spouse wants to sell the house? How will the assets be controlled - what is to stop a malicious surviving spouse taking all the money and giving it to their own offspring before they die? If there is something that prevents this happening is there a real danger that it will seriously limit the survivor's options to support their own well-being in their old age?

Presumably as you say the both of you have your own assets the survivor should be able to do whatever they want with their own money anyway.

I fear trying to control the future from the grave is very liable to create unintended consequences.

Keep_pedalling

One thing I would be worried about would be that by tying up my assets in trust I would no longer be able use those funds if I needed them in changes circumstances. I would not want to be taken out of a position where I can fund care if I needed it or to spend assets on adapting my home if I developed mobility issues.

stevet2607

Thanks for the replies so far,
Yes the disadvantages with a complicated trust is that it commits the money and, depending on the complexity of the trust, limits access to it even when alive.

buildersdaughter

If you can even up your personal accounts ( did you bring approximately equal amounts into the marriage?) - we have done this - you can leave your estate as follows:

Each leaves their estate to their children, with a life interest in the house to spouse. That means that on first death, their children get everything that's not the house divided between them.
On the second death, their children get the same + 1/2 the value of the house. The other set of children get 1/2 of the value of the house at that point.

Should the surviving spouse need to sell the house to fund care, or run off to a remote corner of the globe, they can only use their 1/2, as 1/2 of the value goes to the dead spouse's children when it is sold.
If the family has been together a long time and regards itself as a 'unit' this may seem unfair, as potentially the surviving spouse's children's inheritance is less certain. But if these are 2 people who married when their children were adults, those children can only really expect to inherit from their own parent.

Caution is needed to say that the surviving spouse can sell the house and buy something more suitable - but the dead spouse's children retain their right to half. I always put this in, for as bord regulars know, I have a friend stuck in an unsuitable house, unable to sell as her equity would not buy her anything suitable

Sea_Shell

I agree with above to a point. But what if half the marital "cash" isn't enough for the surviving spouse to live on. No use being asset rich but cash poor.

buildersdaughter

yes, that is difficult - or even if it is not enough to maintain the kind of life they would expect for each other. I just make the suggestion as a starting point, if pensions and joint savings accounts are enough.
Of course ISAs have to be in the name of individuals, but given that one can have £1k income from savings before tax is paid, a joint savings account might still make sense.
I have to say that our planning centres around each having a reasonable pension, and it is not clear if that applies to OP & spouse.