With one in three marriages ending in divorce, and the majority of divorced couples remarrying, blended families have become the norm rather than the exception.

If you’re about to embark on your second, third, or even fourth marriage, and have children from previous relationships, there’s a risk your kids could miss out on their inheritance if you haven’t updated your financial plan.

If you die intestate, any children from a previous relationship may receive nothing

What are the inheritance rules when I remarry?

When you remarry or enter into a new civil partnership, your previous will (if you have one) becomes null and void. Unless you make a new will, this means you’ll die ‘intestate’. In other words, your estate will be distributed according to the rules of intestacy.

Apart from the added expense and often lengthy probate delays this causes, the main issue here is that the courts decide what happens to your estate. You (and your loved ones) will have no say about how, or to whom, your estate is distributed. And depending on the value of your estate, any children from a previous relationship may receive nothing.

In England and Wales, if you die without a valid will in place:

– Your new spouse or civil partner will receive the first £270,000 of your estate, your personal possessions, and 50% of the remainder of your assets.

– The other 50% of remaining assets will be split equally between your children from present and past relationships.
If your estate’s total value is under £270,000, your children won’t be entitled to anything.

As you can see, it’s likely that any children from a previous relationship might receive less than you intend.

In Scotland and Northern Ireland, intestacy rules differ. To find out more, visit the government website: Intestacy – who inherits if someone dies without a will?

I’m cohabiting with a new partner

If you have a new partner but aren’t married, and you die without making a will, your partner won’t be entitled to inherit any of your estate. This remains the case even if you have children together.

Instead, your estate will be split equally between any children from your past and present relationships, completely bypassing your surviving partner. For these reasons, it’s essential you prepare a new will if you’re in a long-term but unmarried relationship.

If you do something that falls outside the rules, it could be considered a ‘Deliberate Deprivation of Assets'

How can you be certain your children will receive the inheritance you intend?

With a bit of planning and forethought, you can make sure your current partner and all your children benefit from your estate as you would wish.

– Draw up a prenup

If you come into the new relationship with more wealth than your new partner, you may want to think about a pre-nuptial arrangement. This will protect your children’s inheritance from previous relationships, no matter what happens.

Although it may be an uncomfortable topic, it’s important to discuss your respective assets and decide how they will be split if your marriage was to break down. A prenup isn’t as legally binding as a will, but provided it’s fair and correctly drawn up, a judge will usually uphold it.

– Write a new will

Before you remarry, prepare a new will that comes into force on the day of your marriage. You can provide detailed and explicit instructions about exactly how you want your estate distributed, and make sure you review it regularly to keep it up to date.

– Create a trust

One way to protect your children’s inheritance is to arrange to place your assets, investments and property into trust on your death. You can arrange for the trust to provide your surviving spouse or civil partner with an annual income while they’re alive, and then when they die, your estate passes directly to your children, intact.

– Own your home as tenants in common

If you and your new spouse or civil partner are tenants in common, you each own a percentage of your home outright. You can both then choose who will benefit from your share of the property, typically your children from a past relationship.

It also means if one of you has contributed significantly more to buy the property than the other, you can reflect that in the percentage split.

If you own your home as joint tenants rather than tenants in common, the property will automatically pass to your surviving spouse on your death. This could mean any children from a previous marriage miss out on an inheritance, something called a ‘sideways inheritance’.

Planning your legacy with Amber River

The rules around inheritance can get very complicated depending on your circumstances, your wealth, and how and where it is held.

Amber River’s financial planners understand these complexities. They can help you plan your legacy for your loved ones, ensuring your estate goes to the people you’ve chosen, no matter what happens.

Get in touch

To speak to us about your estate planning, or to arrange an appointment, call 0800 915 0000, or alternatively use our contact form here.