Wills and Stepchildren

AnotherJoe

(37.5 x 2) + (12.5 x 2) = 100 in my universe of advanced maths, Malthusian

Malthusian

D'oh. My head have been in a very advanced world of maths to not try multiplying the 37.5.

Manxman_in_exile

murphya wrote: »

We have mirror wills for each other.

But in the event on the survivors death our assets will be split 37.5% to our two children, and 12.5% to my husband’s older children from his first marriage.

I have recently inherited quite a large sum from my mum who died in July as I am an only child and my dad died 27 years ago.

So my step children will do quite well in the end !!

We have a similar situation, but we don't have any children or step-children. Our nieces and nephews are our beneficiaries but their shares differ according to my wife's and my respective "contributions" to our marriage. When one of us inherited a considerable sum from their family, we further adjusted the respective shares in our wills to "keep" that money in the family it originated from. We both thought that was fair and proper.


As pointed out above, mirror wills impose no legal obligation on the surviving spouse. The surviving spouse's will is revoked if they remarry (happened in another part of my family) or simply change their mind and "renege".

Sea_Shell

Manxman_in_exile wrote: »

We have a similar situation, but we don't have any children or step-children. Our nieces and nephews are our beneficiaries but their shares differ according to my wife's and my respective "contributions" to our marriage. When one of us inherited a considerable sum from their family, we further adjusted the respective shares in our wills to "keep" that money in the family it originated from. We both thought that was fair and proper.


As pointed out above, mirror wills impose no legal obligation on the surviving spouse. The surviving spouse's will is revoked if they remarry (happened in another part of my family) or simply change their mind and "renege".

This is exactly what we're going to do, once all the N&Ns are over 18. Currently goes to our siblings, after each other.

You can only ever trust that the surviving spouse "honours" the agreement and rewrites their will accordingly, if circumstances change.

Manxman_in_exile

Just to add to my previous post, our solution works ok if you don't have children and step-children of your own. I appreciate it becomes more difficult if you do.

getmore4less

there are other option to hope for the best they won't change their mind.

Life interest trusts can be very effective at ring fencing assets.

Property is particularly useful as that can have have low/zero trust management overheads.

One other thing to watch out for is "commorientes"

There can be unintended consequences as the tax treatment is not straightforward.

Survivor clauses also have an impact.

One particular anomaly is the IHTA84/S4

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm12197

maman

I read this as the OP's late husband telling her verbally that he thought what his children had inherited from their mother was sufficient and that their joint estate (after his death) should all go to their children together.

OP now has the dilemma in that she feels it's morally not quite right to leave her step children nothing.

I can empathise with that. These have been her step children for 45 years (longer than her own children) and her late husband didn't stop being their father when he divorced his first wife. Maybe he was feeling a bit bitter as perhaps he came out tof that marriage with very little.

We are in a similar situation. DH and I have a child each from out former marriages (none together). We brought them both up together. Our wills clearly state that while each of us inherits everything in the first instance then afterwards the children get it split 50:50.

That may be seem simple but what we haven't/can't/won't take into account is what the children may inherit form their own mother/father. One may not inherit much as her father has a step child and many, many step grandchildren. It depends how moral he's feeling as he did very well from the divorce originally. The other child has already had her mortgage paid off by her mother and will, in time, inherit any money.

That doesn't affect how we feel about the children though so we're treating them equally not trying to balance things out.

Malthusian

maman wrote: »

One may not inherit much as her father has a step child and many, many step grandchildren. It depends how moral he's feeling as he did very well from the divorce originally. The other child has already had her mortgage paid off by her mother and will, in time, inherit any money.

That doesn't affect how we feel about the children though so we're treating them equally not trying to balance things out.

Once you start going down that rabbit hole you then have to ask yourself whether you need to compensate for their different earnings, and so on. (Which can be viewed as punishing the more successful sibling for working hard.)

The heirs are the ones who have to deal with the consequences of a Will, and the fallout if the Will creates family strife. If you leave your estate, say, 75% / 25% in favour of the less well-off child, and the other thinks they've been hard done by, the richer sibling has to deal with the feeling of being slighted and the poorer sibling has to deal with their bitterness.

If the richer sibling is actually happy to receive less, you can leave your estate 50 / 50 and let the children execute a Deed of Variation. If they wouldn't be you have to ask whether the less well-off sibling really wants more money in exchange for the aggro.

50 / 50 on the basis you feel the same way about both of them makes perfect sense to me. But it is still possible that one child gets nothing if the surviving spouse changes the Will or remarries.

Life interest trusts are one way to get around this, and another highly underrated option is gifts in your own lifetime, if you have the spare capital.

murphya

Malthusian wrote: »

Unless the survivor changes their Will. Or remarries (which automatically invalidates it).

Where does the other 50% go? Or are there five stepchildren with 12.5% to each?

37.5% each to our 2 children = 75%
12.5% each to my 2 stepchildren = 25%
This makes a total of 100%.

I know that the survivor could alter their will so we will have to trust each other. Ditto with a remarriage.

On the other hand, if I’m dead I won’t be able to worry about it. And vice versa.

murphya

Manxman_in_exile wrote: »

We have a similar situation, but we don't have any children or step-children. Our nieces and nephews are our beneficiaries but their shares differ according to my wife's and my respective "contributions" to our marriage. When one of us inherited a considerable sum from their family, we further adjusted the respective shares in our wills to "keep" that money in the family it originated from. We both thought that was fair and proper.


As pointed out above, mirror wills impose no legal obligation on the surviving spouse. The surviving spouse's will is revoked if they remarry (happened in another part of my family) or simply change their mind and "renege".

I have gifted my son a cash deposit for a flat and have told my daughter she can have the same amount when she is ready. This is coming out of my inheritance, as my mum verbally requested me to do this, so they will benefit.

I have commented on the remarriage/ survivor changing will thing earlier.