In a recent speech, Gavin Barwell, the MP for Croydon Central and Minister for Housing, urged people to leave their estates to their grandchildren rather than their children. His suggestion was aimed at helping grandchildren to get on to the property ladder.
He revealed that his mother had chosen to leave her estate to her five grandchildren rather than to him and his brother. Putting politics aside for a moment this would seem a perfectly reasonable suggestion and one which many people would consider to be quite logical. However, several studies have shown that those people who would be effectively excluded from their parents Will by this suggestion are not necessarily as financially secure as their parents might think.
Unfortunately the days of generous salary-based pensions are almost certainly over. As a result, many of the generation who Mr Barwell has suggested do not need the money as much as their children do, are often relying on a windfall from their parent or parents to ensure that they have enough on which to comfortably retire.
From a legal point of view excluding your own children can lead to claims being made against your estate, potentially pitting mothers and fathers against their own children. In some cases it is also possible that the courts may agree that the skipped generation should have received something.
Although Mr Barwell’s suggestion recognises the fact that house prices have risen dramatically, his suggestion may have the unwanted effect of increased litigation and a decrease in the availability of funds for an ageing generation to fund such things as social care.
Therefore before we all decide that we will disinherit our children in favour of our grandchildren we should probably consider first if any other members of our family need any funds to assist them in their later years. The obvious thing of course is to have a discussion with family members before making a decision on your Will or if you wish to keep such matters private, to discuss it with your solicitor before you finalise your wishes. This will at least give you the opportunity to discuss not only the legal aspects of skipping a generation but also the practicalities of selecting your beneficiary.
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