Protecting Your Children's InheritancePublished on: 09 October 2018
For many couples making their Wills, it often seems natural and right to them that they should leave everything to each other and for their assets to pass to their children only if their partner should die before them. But is this always the best thing to do? If either or both of them have children from another relationship, the answer might be no.
Clearly, there is a need for couples to make appropriate financial provision for one another, but this does not always mean that they have to leave all of their assets to their partner outright. If they do, they will have no control over those assets after their death and there is no guarantee that they will ultimately pass to their chosen beneficiaries, such as children, in the event that they die before their partner.
Children from previous marriages
Take the example of a couple who have both been married before and have children from their previous marriages. They own their home jointly, as beneficial joint tenants, which means that when the first of them dies, the house will automatically pass to the survivor, regardless of any contrary provision in their Wills.
They both want to make Wills to provide for each other and (ultimately) for their children. They make “mirror” Wills in which they leave their estates to each other but, if their partner predeceases them, then to their children or their respective children. They both want their own children eventually to receive an inheritance, following the second partner’s death.
Sometime later the husband dies. The matrimonial home passes automatically to the wife outright because they owned it as joint tenants and the survivor inherits the whole. His other assets pass outright to his wife under the terms of his Will. His children from his first marriage do not inherit anything. Everything now rests on the wife’s Will, to ensure his children receive their intended inheritance on her death.
No provision for late husband's children
The wife later remarries and has little contact with her step-children. She decides to make a new Will to reflect her new circumstances. The new Will provides only for her new husband and her own children; it does not make any provision for her late husband’s children, even though she inherited all of his assets which he ultimately wanted to pass to his own children. There is nothing that the step-children can do about it.
Their step-mother’s family will eventually inherit everything, including their late father’s assets. It is all so unfair, and not what their late father had intended. This situation could have been avoided if their father had dealt with things differently.
Tenants in common
Rather than owning their matrimonial home jointly, as joint tenants, they could still have owned the property jointly, but as tenants in common. This means they would have owned their own percentage shares in the property which they would have been free to leave by Will to their respective children. The Wills would have provided that, when the first of them died, the survivor would be able to continue living in the matrimonial home for the rest of their life (still enjoying the benefit of their partner’s share) but, on the partner’s death, their share in the home would pass to their own children.
It is also possible to make a similar provision in relation to other assets, including money. This is known as a “life interest” and is commonly used in Wills in circumstances where couples have children from other relationships that they want to ensure will inherit some or all of their assets following their partner’s death. It is relatively simple and can save a lot of heartache.