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Ensuring My Children Inherit

Ensuring My Children Inherit

Traditionally most people have opted for mirror Wills leaving everything to each other in mirror Wills.   There is a danger particularly for younger couples, if their partner was to die young and the surviving partner remarries and makes a similar Will the children from the first marriage could miss out.

Case Study 1

Kevin and Julia married in there thirties and have two young children David and Robin.  They have standard mirror wills leaving everything each other on first death and to the children on second death.   After a short illness Julia dies leaving Kevin to bring up the children.   Two years later at a school function he meets Anne, who is ten years his junior who has three young children and has recently divorced her partner.  Six months later they get married and have a Will drawn up leaving everything to each other then equally divided between the five children.
Kevin has a heart attack and dies aged 46 and everything goes to Anne. 
Anne has not been getting on too well with Kevin’s children who have since his death gone to live with Kevin’s parents. She decides to redraft her Will leaving everything to her three children.
Julia dies some thirty years later and all her estate goes to her three children and David and Robin get nothing.

How can I ensure my children inherit?

Some people gift half their home absolutely to the children on first death expecting the surviving spouse to continue living in the house.   Whilst this does ensure the children inherit there are drawbacks people should be aware of:

The children can at anytime demand their inheritance.

  • Any divorce settlement of your children, who now own your house, may include a part share your house.
  • Any bankruptcy may involve a part share of the house.
  • If your child was to die your house could then belong to your child’s partner.
  • The children will be required to pay capital gains tax on their half of the house when it is sold.

How can I ensure my children inherit and still look after my surviving spouse?

To ensure that the children do inherit as well as making provision for the surviving spouse it is possible to leave half the house to the children in a property protection trust (which also protects a substantial part of the home against care costs) and gives the spouse a life interest in the property such that they have to keep it in good order and insure it and the children inherit their half on their second parent’s death.

Alternatively It is also possible to put restrictions on the occupation of a house by granting a right of residence with conditions applied for example the right of residency ends on marriage, cohabitation or some other event which would terminate and the house would then pass to the children.