How can I ensure that my children’s inheritance and house goes to them?

Thousands of UK households are now made up of blended families, raising questions about who will inherit assets.

I own a property worth £700,000 which was my marital home from my first marriage. I am the sole person named on the deeds.

I remarried five years ago. I have made my will stating that my second husband will get the house when I die. Will my husband be liable to pay inheritance tax?

And how can I ensure that when he dies the property goes to my children from my first marriage and not to my step-children and guarantees my children’s inheritance?

The Experts Reply –

Firstly, your husband will have no inheritance tax to pay because spouses can pass assets to each other without incurring a tax charge.

The more difficult question is how to ensure that on your husband’s death the property passes only to your children, and not to his, thus ensuring your own children’s inheritance.

You have two options, according to Hugo Smith, of law firm Bircham Dyson Bell. “You could simply rely on him making a will which leaves the property to your children, but with the risk that he would be free at any time (either during your lifetime or after your death) to alter his will,” he said.

“A better alternative would be to amend your will so that rather than leaving the house outright to him, it passes into a trust for your children’s benefit but with a lifetime interest for your husband.”

This would mean that if your husband survived you he would be entitled to live in the house for the rest of his life.

The terms of the trust would then set out that on your husband’s death, the property would pass to your children, and would not pass according to the terms of his will.

“The benefit of having a trust is that it enables you to set out in your own will what is to happen to the house following your husband’s death,” Mr Smith said.

But be aware that your step-children could still potentially bring a claim for the house.

“They could only bring a claim on your death, however, if they could show that they were financially dependent upon you and that your will failed to make reasonable financial provision for their maintenance,” Mr Smith said.

“If your husband survived you, they could bring a claim against his estate, but this would only include the house if he owned it himself. If you had left the property in trust for him, it would be much harder for a claim to succeed simply because the property would not be part of his estate.”

How can I ensure my children’s inheritance and ensure my house goes to my children? Fill in the form below and speak with the experts!