Published on: 12th April 2021

Dividing the Estate between children and stepchildren

We have many clients who are in their second marriage. For those in a second marriage with children from their first marriage and no children from the second marriage there is always the difficult problem of how to divide the estate between children and stepchildren. Whilst both of the couple are alive usually the relationships between the couple and the children and the stepchildren are very good. Clients use phrases like “we treat all the children exactly the same”. However, once the first passes away the relationship between the survivor and their stepchildren often cools. This may not be planned or immediate but happens slowly over a period of time.

When we discuss this with our clients and both are alive there is always a solution but often clients keep on postponing the Estate Plan we propose. Then the first of them dies and some time later the survivor changes their Will so that the assets of both families goes to the children of the survivor and the children of the first to die receive nothing.

We have a number of options to assist and this usually involves balancing trusts with sole and joint assets. Any asset that is owned jointly will automatically distribute to the survivor. Every solution is different depending on the circumstances of the clients but here is an example of a solution we created for one of our clients (a couple).

Before the Casey & Associates Estate Plan the situation was as follows:

• Husband (H) had three children being A + B + C from his first marriage.
• Wife (W) has two children being Y + Z from her first marriage.
• H & W were both divorced from their first spouse had no children together.

The family home was valued at £600K. H had contributed £200k to the house and W had contributed £400k. They owned the family home jointly. H had cash and investments of £200k and W had cash and investments of £200k.

H & W wanted to treat all children the same so each would receive £200k. They had written home Wills leaving everything to each other and then to the children in equal shares when the second passed away. However, it would have been easy for the survivor to change their Will after the first died leaving all of the assets to “their” children.

At the meeting with our Consultant our clients conceded that they were both, independently, worried about what would happen if the “other” should be the survivor and whether the survivor would change their Will to favour “their” children. They had never spoken to each other regarding their concerns.

We created a superb plan which included owning the family home in unequal shares to reflect the different amounts invested. We created trusts to protect assets between first death and second so that whomever died first “their” assets would be protected for “their” children. The clients also set up joint bank and investment accounts so that when the first died the survivor would have instant access to liquid funds without having to wait for a Grant of Probate.

Our clients told us that the Estate Plan created by Casey & Associates had lifted a great weight of worry from them. They had been really concerned but had never discussed their concerns with each other because they did not think there was a fair solution to their problem.

If you are a home owning couple with children and stepchildren and you have concerns about what will happen when the first of you passes away please consider arranging an appointment with a Casey & Associates consultant by contacting the friendly and experienced Client Services team on 01732 868190 or contact us using our website by clicking here.

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Our Covid-19 policy is now that if you wish to give instructions or require general information about our Wills, Lasting Powers of Attorney or Trusts then we will carry out a telephone or Zoom appointment. However, if you wish to give instructions to one of our Consultants and you feel that you can only do this at a Face to Face meeting we are offering, at our Consultant’s discretion, a limited number of Face to Face appointments in most of the areas we normally cover (subject to Government advice). To see the areas we normally cover please click here. To arrange an appointment please telephone 01732 868190 or click here.

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