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After a bit of advice if possible.
In the event of both myself and Mrs Catfood dying at the same time it's been arranged that her sister will take care of our children, we set this up in our will when the children were first born and agreed that we would leave our estate minus the life insurance money which would go to the children in trust, at the time this was the equity in the house, the children are now 10 and 15, the house is paid for and worth more than double what it was and at present would go to Mrs C's sister, which is probably a bit more than necessary, we also realise that if one of use died she would currently be in line to also inherit the life insurance which would be paid out to the surviving parent, a sizeable chunk of money.
We've contacted our solicitor to amend the will but would like any advice about the best and fairest way to proceed. As a side note she has a large house so extra space wouldn't be needed, moving house etc.
thanks in advance.
That's the plan, mostly, but we need to provide fairly for her to continue bringing them up, I've had a scoot round the internet and apart from naming a lump sum figure to go to her there doesn't seem to be much advice.
You do appear to be rather overthinking this OP.
And in the process come up with an approach that is only marginally better than my " mmmm, yes really need to get round to writing a will some time"
Having said which it's hard to tell as your first sentence paragraph is completely unintelligible
Could you run it past us again who gets what currently?
PS. Tldr; leave it to the kids.
I think when we did this all we did was name the girls as beneficiaries and my wife's best friend as their named guardian in our wills (obvs with her agreement).
Split the house ownership (might need land reg change) so you each have a defined stake (50/50). This has two benefits, 1. If a single parent dies their share goes in trust to the children (rather than automatically to the spouse), the advantage here is if the surviving parent was to remarry then dies the children still get at least 50% from the first parent (rather than all going to the potential future spouse). 2. Only 50% of the house is exposed if one parent needs a care home place funding. We have ours set like this with provisions that allow the house to be sold as long as any onward purchase is split the same way.
Interesting approach Nixie.
No concerns about the kids booting the widower{er} out to realise their assets?
I think the way it was written prevents this. Can't remember the details as we set it up a few years ago but there is something like a life time interest allowing the surviving spouse to continue living in the house.
In principle you can probably set up a trust for the capital such that income goes to the guardians up to some fixed age of child (say 18 or 21), at which point it all reverts to the children. With guardians also as trustees.
That's what my parents said they had done, but of course that was decades ago and may have changed (plus it was in Scotland). And it might not be quite what you want if you'd prefer the guardians to have more than the income (say 2-4% yield depending how it's invested, though they'll have some say in this). You'd need to speak to a lawyer for the details.
I wouldn't recommend splitting the house unless you were really worried about one surviving parent disinheriting their own kids.
Get proper legal advice, but I vaguely seem to remember that the trustee is allowed to take reasonable expenses from the trust in caring for the kids, which can include paying a slice of the house they live in etc.
Is the point of all this to stop the guardian being stuck with all the costs of bringing the kids up?
you were really worried about one surviving parent disinheriting their own kids
This wasn't the worry. We were protecting against a future spouse automatically inheriting everything in the death of the surviving initial spouse. There are plenty of cases where people have been manipulated or are perhaps no longer of sound mind where this could happen without them intentionally disinheriting the children. I'm lead to believe it's not an unusual change for older couples to protect against care home fees of one of the couple taking the whole estate.
Wow,I never even consider such things. Maybe I'm wrong not to.
Two kids (one grown and with own family now) and never once thought what happens if we both die at the same time. Maybe as we effectively have SFA to pass on, no house or significant savings.
Leave it the kids, with guardian having control of the funds to help support them.
Have a person B in mind, in case A dies first, or buggers off to Australia making the whole thing waaaay more complicated
Sorry if things weren't totally clear but yes this is so that Mrs C's sister isn't left out of pocket paying to bring up our children.
To the Generalist, yes not as clear as I'd have liked, I was rushing out the door when I wrote it, basically if we both die at the same time then the children get both life insurance payouts split between them which is held in trust till they're eighteen, Mrs C's sister gets the house, we want to change this.
From above comments I'm erring toward changing the will so that everything will be left to the children with said sister having access to reasonable expenses.
Wow,I never even consider such things. Maybe I’m wrong not to.
Two kids (one grown and with own family now)
Easy to overlook, but really important if, God forbid, the worst happens. Help your own kids get it set up.