Moral Money: our reader is concerned there will be nothing left for her child to inherit
Dear Moral Money,
I consider myself to have two sons – one is biological, and the other is from my now ex-husband’s previous relationship. I still have a great relationship with my stepson, and until recently, I’ve had my will giving him the same portion of inheritance as my “actual” son. However, I think this might have to change.
My biological son is in his twenties, while my stepson is somewhat older. They’re both fairly financially self-sufficient. My ex-husband has now remarried, and he and his new wife seem to be spending excessively – and I’m concerned that he’ll have nothing left for his sons to inherit.
While my stepson has his own mother to hopefully provide for him, my money is all “my” son might have. I want to make sure he’s provided for – but how do I tell my stepson I’m essentially considering cutting him out without it affecting our relationship?
Any advice on how to go about this – and actually whether you think it’s a good idea – would be much appreciated.
Dear reader,
Writing a will is quite an emotional experience and it can be a challenge to imagine how things could change between now and then. Our default thinking is likely to assume the oldest die first, and we then make assumptions about who gets their assets. We imagine that wealth stays intact and passes on to the next in line.
If you think about it there is a lot of guessing and assuming going on and, in my experience, assumptions and expectations are a recipe for disappointment.
This traditional thinking is also incongruent with what most beneficiaries would prefer. For example, many octogenarians leaving assets (assuming they don’t get used up paying care fees) are leaving assets to mature children who have paid off mortgages, created some assets for their retirement and are already worrying about mitigating their own inheritance tax bill.
When they inherit it is almost too late in life to be useful to them, and often gets used to provide for the next generation. Mum and Dad are sorted, but their children have to build up massive student loans to get an education, and without a substantial deposit they can’t get on the housing ladder and may still be living at home past 30.
I would be interested to know how you were treated/expect to be treated by your parents when they pass. This may be impacting on what you think is right, but as described above things have changed in society and what was once normal has shifted with longevity, modern lifestyles and economic pressures.
You wanted to treat your sons equally, and neither has done anything to you to change your relationship with them. It seems a shame to me that you may profoundly alter your relationship because of how other people have changed – why let your ex-husband’s new wife’s spending habits change how you treat your sons?
You say that your money might end up being all your biological son inherits given the new spending pattern of his father and new wife. You haven’t said, and quite possibly don’t know, about the new wife’s finances, but it could turn out well for your boy. If the new wife has assets, dies and leaves them to your ex, that swells what he could leave to his sons. This is the reflection of you leaving some of your wealth to your stepson, is it not?
Imagine how uncomfortable it would feel if your ex-husband asked you what you and your current husband were planning to spend during your lifetime. He only wants to know so he can judge the consequent size of your biological son’s legacy so that he can adjust his will to balance out your frugalness/overspending when he divides up his estate. You would have every right to be incensed.
I know that if I were in that situation, I would want to tell him to mind his own business. I might well be motivated to spend the lot so my ex could not consider our son catered for and bequeath his assets to the new wife and her family!
Money is for spending. It is a tool of exchange. We hand over money and buy things, services, time, and we have every right to decide as individuals how we spend our own money. If your husband’s lifestyle has changed because of the company he is keeping, that is entirely his business, as far as I can see.
There is also the point that expecting an inheritance can cause unintended consequences. Some potential beneficiaries lack the inspiration to create their own wealth, spending power, choice and independence. The thing is, when you get someone else’s money it can be accompanied by a sense of how it should be used, even if there are no explicit rules – as there are in some cases, like trust funds. Clients say things like “I am going to use it to invest for the future because dad would turn in his grave if I blew it on a holiday”.
You do of course have the right to do as you desire with your money as stated above. If you feel obliged to support your biological son with more favourable treatment than your stepson, you will need to understand your justifications and be comfortable with the consequences.
The good news is you don’t have to tell anyone what your will says. You can make or update your will at your discretion, and its contents can remain secret until the day you die – however, you will know. It will change your relationships precisely because you will know, but you don’t have to tell anyone else if you don’t want to.
I caution clients against having any expectation around inheritance. I have seen instances over my career as a chartered financial planner of people saying one thing and doing something quite different. There is also the fact that many families end up blended with other families due to divorces or bereavements followed by remarriages. Marriage itself changes the legal entitlement to assets, and this can often be overlooked.
The other spectre that threatens to deplete our wealth substantially before we die is the cost of later life care. All in all it’s a very brave person who banks on an inheritance before the reading of the will.
Enjoy your sons, enjoy the security of having enough assets to imagine being able to outlive them and leave a legacy. I know it also comes with responsibilities, like this decision, and I hope you can reach a comfortable decision and be released from your dilemma.