Inheritance For Grandchildren

[iloveglee]

I'm looking for some help/advice/suggestions. We are about to write a new will, as ours is about as out of date as it's possible to be. Now we have five grandchildren, we have decided to include them in a share of what we leave. This is where our dilemma now is.

Our plan is to leave them a small share each, the bulk going to our two children. So far so good. However, we hope it will be many years before we die, and as two of them are at the house buying age, realistically what with house deposits being so hard to save for, decided to give each of them a chunk towards a deposit. This is to be deducted from what they will inherit after we're gone.

Question now is, what to do about the other three, who are younger and not yet in the market for house purchase, and are unlikely to be for a few years. We can include in the will that the two who have had some of theirs re deducting it. Once the will is written, we have then to make provision for this to be included when one, or all of the other three get their 'up front' share. We don't want to be having to write a new will each time this happens.

I have had it suggested that this could be added a codicil, but presumably that will involve more cost to have it done. I have actually no idea how much any of the costs of drawing up relatively simple wills/codicils are.

We thought of opening some savings accounts, and writing it in to the will that the contents of that account are to go to whoever. Our current will has this in it as we had some money that belonged to one of our parents. Who are now gone of course, as is said account!!

Problem is the pathetic rate of interest paid on savings accounts. Because of this we have put our money into premium bonds, and the wins we have been lucky to get have given us a reasonable amount of 'interest'. Problem again here, you can only have one premium bond account per person. Opening one in each of their names seemed to be an option with me having control of the access to them, but again, wins are variable and it would be unfair if one of them had several, or a large win, and the others didn't.

I had found a reasonably decent rate of interest on a couple of accounts, but the rate includes a bonus at the end of one, or two years, and then the rate reverts to something like 0.1%. Which then means switching the money to another account, and changes having to be made to the will again in terms of changing the bank details.

We had thought of buying shares, but they can be risky and we don't want them to be in a position where the amount we have put aside has reduced in value. ISA's are not much better either with interest rates.

I know in normal circumstances your kids/grandkids have to wait until you die before they get anything. But as people are living longer, and I hope we will, it seems such a shame that they can't get a helping hand when they need it.

I'm pretty sure there will be someone on here that will have useful ideas that I might not even have thought of.

[bednobs]

hmm, the problem with specifying amounts as a bequest is what if you don't have that amount when you die? Nobody knows the future and care costs are a lot pf money, which could easily deplete available funds.
If you have the funds now and wouldn't miss them, it might be better to give all GC what you want them to have now (and let the younger ones parents manage it?)

[bhg481]

You could make the immediate gifts loans instead, to be repaid on your death; the same for any future grandchild money. The only problem with that is that the mortgage company might not like it. We recently gave both our grandsons a sum of money towards a house deposit; one mortgage broker wanted a declaration that the money was a gift and that we were not buying a part-share in the house with it, the other wasn't bothered. It didn't matter to us because the money was a straight gift but, in your case, it might have to be repaid on your death.

[iloveglee]

Ah yes, I get the points made in the answers. I should have said, we have a house, which we have put as tenants in common. So that at the very least half the value of the property will be protected for the benficiaries, and the value of it is enough that the amount we have already given could be given to the others, even if we have spent all the 'cash' we have. We had already planned to write in the will that the two who have had a share already would have to have that deducted from their 'inheritance' share.

As far as giving money towards a deposit is concerned, yes mortgage companies are very strict about the conditions, and we had to write a letter saying all those things, like it's a gift, not buying a share in the house etc. Both of them went through with no problems.

Thinking it through, maybe the best idea would be to get each of them to open a savings account in their own name, managed online (by us, or as mentioned by their parents), so that we have control over when they have it, and what for. Then effectively it's 'theirs' in the same way that the ones who have put it into a house deposit have had theirs. We do have enough cash to do this now. We only want them to have it for a house deposit while we're alive. After we're gone we don't propose to make conditions, as long as we're not here we won't have to see what they do with it.

It's not easy is it, if you could rely on a bank account not chopping and changing the interest rate, other than natural rises and falls in general rates, but of course they are competing against other banks for your money, so have to make 'offers'.

It's been really nice to visit our first grand child in her new home, and soon to be visiting the second in hers, and know that we have been able to help them.

I would much rather we enjoy what we have with them, than have them wait until we're gone. Both of our parents had this attitude, they didn't own property so had little to leave when they were gone, but we all had many good times together.

[iloveglee]

It's really good for people who are currently buying a house, the interest rates are great for them, but deposits as has been said are terrible. Hence the idea of premium bonds, we have had several small wins, and over the year it's added up to about 1.5% interest which is almost impossible to get on anything where you want to be able to get your money. They are just a bit of a pain in the backside in that the only account any winnings can be paid into is the premium bond holder, it's not possible to nominate another account to have them paid to. You can opt to re-invest into the premium bond account itself, but doesn't get around the issue of an equitable share of the proceeds!!

[bednobs]

in fairness, no-one knows what'll happen in the future - what if you both need care?

[Peter Pedant]

Yikes
long un
can be done - ask the lawyer drawing up the wills

1) make sure they are simple - yours arent
2) sell up and give the moolah NOW - no one does by the way but that way you can sure the money goes to the ones you want

staggered giving - actually I am doing that - X had his share 2010 when I was dx with ca. I unexpectedly survived. Y is getting his share now rather than on my death and you wont believe the yarting. You will believe the yarting. is Ys share bigger than X ? - Neither of them made the money you know !

both X and Y have produced kids - where is their share? excuse me?
"If there is a pay out I think it is unfair...." - thank you

You can factor in inflation - easy one
X has made a huge return ( property in central london over 12 y) which Y never could ( no moolah)[ no london job] and this is called an opportunity cost - spurred on by me of course

things to think about - I would distribute the money now and what ever you do dont ask - do you think this is fair ? the answer will always be "no - I want more"

[Peter Pedant]

// You could make the immediate gifts loans instead, to be repaid on your death; the same for any future grandchild money.//

no - gift not loans
gets the moolah out of your estate ( if you live 7 years)

this is arranging your estate to minimise tax
some suggestions err into tax evasion just in case answers are removed

[iloveglee]

We don't have any issues with inheritance tax. We are worth enough but not that much!!

If we need care? As the house is tenants in common on first death, their share goes into trust for beneficiaries. On the second death their will comes into effect. If care costs are incurred they can only be taken from the half that belongs to the person needing the care. I accept that both could feasibly need care at the same time, but that's something that would have to be faced at the time. At least the grand children will have had some money towards a house deposit. Both our children have their own house so they'll have to take what's left.

They are pretty good at co-operating in actual fact, although I know that people do change sometimes when there's money involved. All the grand children have been brought up together as friends as well as family so we can just hope they'll stay that way. So far so good!!

[Zacs-Master]

Will making is extremely complex if you do it right. You need the expertise of a professional accredited (FCCA, FIPW minimum). They will advise you on Trusts / Appointing executors etc etc. With all due respect to AB and its members, an open forum isn't the place to get such critical advice.

[Gizmonster]

Why don't you open up one premium bond specifically for the three remaining grandchildren. Put this in your name and if you want another premium bond for yourselves, put it in your partner's name - I think this is allowed??
Let's say you've given grandchildren A and B £10k each. You open up a premium bond and put £30k in. Any wins are reinvested and you stipulate in your will that this premium bond is to be shared equally between grandchildren C, D and E.

[barry1010]

Gizmonster, OP and spouse already have premium bond accounts. Only one account each is the limit.

[Gizmonster]

//// Gizmonster, OP and spouse already have premium bond accounts. Only one account each is the limit. ////

I don't know why, but I assumed that the limit for premium bonds was a lot higher than £50k (I just googled it), so I was going to suggest transferring all the bonds from one account to the other, freeing up the other account ..... but that won't work if they hold more than £50k between them both.

[sammmo]

You could work out what percentage the amount is, of the value of what your house is worth now. Then put it in the will that your grand kids get a set percentage but the other 2 get whatever percentage they’ve already had less. Ie you leave them all 10% but 2 have already had 5% so they only get 5% each. If your house is worth a lot more it doesn’t matter because they’ve invested in a house to so the original amount had increased in line too. Simples

[Peter Pedant]

Zacs is completely right of course
BUT
there is no point in have a loo-er thread if all you are gonna say is,
pay for professional advice

I fort someone was gonna say - you are making will making extremely complex and it shouldnt be

[Peter Pedant]

yeah I think sammo has the right idea
percents of the estate
BUT -
valuation of the estate in future times will be open to family disputes
AND
the fact that Aaliya (*) gets £10k - 1% and later Beatrice gets £15k as 1% will cause er wonder esp if, the rate of inflation is 1.5% or less or more!

Foo! and you havent had 'you have cedric £1000 at Christmas that must be counted!"

(*) yes there really is Aaliyah, ( most high for a gurl) I was going to choose Aardvark
AND
Princess Di did per cents and "they" got all of them to give up their percents and accept silver mugs instead. And they were mugs !

[Zacs-Master]

'there is no point in have a loo-er thread if all you are gonna say is,
pay for professional advice'

I think most of the answers on here prove the opposite, especially your own special brand of incomprehensible gobbledygook, PP.

[iloveglee]

Have come back to this thread, as, having found a bit of a way through, it may help someone else in the same, or similar boat. We have figured out that, the two that have already had some of their 'share' any increase in value would be covered by the fact that house prices tend to go up. Usually, although these days who knows.

So the other three. In the end, we found a fixed rate bond, lasting 3 years, with a decent interest rate, given that current rates are pretty bad just now. So I was able to open three accounts, one for each of them in joint names with myself. That way, I have control of these accounts once they mature, and can then make a further decision then. In three years, I am guessing at least one of them may be close to needing this as a house deposit.

I am assuming (and I hope I am correct in this), that as the accounts are jointly held, if I was to die, the money in the accounts would automatically pass to the other holder, without having to go through any rigmarole of having to 'leave' it to them. If I am not correct, I hope that someone will correct me.

As far as writing the will is concerned, we have worked that out by willing a share of our estate to all the grandchildren, with the proviso that they already had a portion of that share which would have to be deducted. It's hard to state amounts, as we have no idea how much our house will be worth when this happens.

It certainly does get a bit complicated but it seemed that this was probably the only way around it without having to keep making changes to any will we have written.