Giving an Inheritance to Children and Grandchildren

Hal17

I have tried really hard to understand this, but the more I read the more confused I get.

I am the only beneficiary for my dad's estate. He is 94 years of sound mind living in a care home. We were speaking at the weekend and he asked me about what money he could leave to my two children and two grandchildren. I told him that I would of course look after this whenever the time came, so all in hand.

My intention would be to use a Deed of Variation to leave the whole estate to my children and grandchildren. The question I have is that the grandchildren are 4 and 14 years old, and everything I read, talks about leaving this pending inheritance to a trust fund?

My two children each have one child and I trust them explicitly to do the right thing with any money left to the grandchildren. I was not expecting to involve any trust fund involvement, but to leave a percentage to each.

My dad's estate could be substantial depending on how long he lives, as long as possible I hope. Appreciate any thoughts, so I can least understand if the need arises.

Keep_pedalling

You would have to put each grandchild’s inheritance into a seperate bare trust and they would then be entitled to the money from their 18th birthday.

With such young GC, I would not include them in the deed of variation and leave everything to your children as there is a strong chance more might come along who will not benefit from this.

Alternatively you could set up a discresionary trust but these are a pain to manage and are subject to hefty taxation.

FlorayG

I see two simple options; your father writes a new will, leaving a portion to each of his grandchildren and great-grandchildren
Or, if everyone is as trustworthy as you say, just give them a portion after his death out of your inheritance. This is what my mom asked me to do and I distributed a large amount of the money she had left me according to her wishes; of course this does depend on a lot of trust 

Hal17

Thank you both for your prompt replies, that is very much appreciated. I do want to keep it simple, so the suggestion to just leave it all to my 2 children, knowing they will do the right thing makes perfect sense. 

This was my initial plan but when you start googling for information, all the trust details come up hence my confusion. 

Willeri

A relevant trust would be needed for any beneficiary under 18 via any new Will or DoV, so if just left to your adult children on basis they are trusted to “do right thing” then those trust arrangements would be be avoided…..however once substantial money comes into someone’s hands they can change their mind! 

SevenOfNine

We used a DoV for an inheritance (& a solicitor to make sure it was watertight). Moved £50k to each of 2 grandchildren (minors), bare trusts with ourselves as trustees.  We did have a problem locating somewhere that would take that amount, there was only N/W & interest wasn't great but later stumbled on Virgin Headstart (not available now I believe) with much better interest & moved it. Oldest will be 17 in June, so we're just sorting out transferring it as most 'childs' a/c's only seem to run until 17.

Kept back £50k separately & we've used it to pay for things specifically for them & their parents, school fees, holidays etc. After 8yrs there's £10k left, we're sitting on that for them to share, maybe Uni or something.

Their dad inherited a LOT in his own right & we wanted this money to 'bypass' ourselves & him. For some families it could be a potential problem having minors inherit, many may not be sensible when they've the right to have it, but that's not a problem in this family.

Sea_Shell

Hal17 said:

Thank you both for your prompt replies, that is very much appreciated. I do want to keep it simple, so the suggestion to just leave it all to my 2 children, knowing they will do the right thing makes perfect sense. 

This was my initial plan but when you start googling for information, all the trust details come up hence my confusion. 

That is fine to a point. 

What if their circumstances change before the GC turn 18 or before the money is gifted to them by their parents (your 2).    Would their intention be to gift (into junior ISAs/savings etc) ASAP, before they reach 18, or wait until then to make a larger one off gift?

What if they were to (re)marry, and not make wills.   Their estates would then automatically pass to their new spouse, which may not then filter down to your GC

silvercar

My kids, as minors, were left an inheritance from their great grandmother. With the instruction that they should not receive it until they were 25 and spend it on enjoying themselves. We just opened a savings account in their names and didn’t tell them about it until they were 25. Sometimes people complicate things with “what ifs” far too much.

Hal17

Thank you all for the very valid replies and very much food for thought. Of course it will all depend on how much is left after all the care costs. He is currently paying £72K a year and this will certainly increase in the future. Thanks again.

km1500

72k pa is a ridiculous amount of money. The world has gone mad..

Hal17

km1500 said:

72k pa is a ridiculous amount of money. The world has gone mad..

I totally agree and that is just for basic care. Fortunately he is in good heath and managed to live independently in his own home until he was 92.

But he now needs to have staff around as he has fallen over his own feet a few times which resulted in a few broken bones. Hence now living as a permanent residence, but he loves it and I darn't tell him how much it costs.