Protecting Your Children's Inheritance
Most parents want to make sure their children are provided for. But without the right planning, the money you leave behind might not reach them in the way you intended — or at all.
The problem with assumptions
When parents think about leaving money to their children, they tend to picture a straightforward transfer: they die, their children inherit, and the money is there for them when they need it.
The reality is more complicated. Without careful planning, an inheritance can be eroded by tax, swallowed by a divorce settlement, handed over in full to an 18-year-old who isn't ready for it, or redirected entirely to someone you never intended to benefit.
None of this needs to happen. But preventing it requires more than good intentions — it requires the right legal structures.
Risk 1: Your children inherit too young
Under the intestacy rules in both England and Scotland, children who inherit directly receive their share at 18. If you die without a will, there is no mechanism to delay that — your children will receive whatever they're entitled to the moment they turn 18, regardless of the amount or their maturity.
Even with a will, many people simply leave their estate to their children outright, without thinking about the age at which that inheritance lands.
For some families, this is fine. For others — particularly where significant sums are involved — handing a large inheritance to an 18-year-old carries real risk.
A will with a trust lets you set a later age for distribution: 21, 25, or whatever age you feel is appropriate. It can also give trustees discretion to release funds earlier for specific purposes — university costs, a house deposit, medical expenses — while the rest remains protected.
Risk 2: Your grandchildren miss out
If one of your children dies before you do, what happens to their share of your estate?
Without careful drafting, it may simply be absorbed into the shares of your surviving children, leaving your grandchildren with nothing. Or it may pass under the intestacy rules in a way you wouldn't have chosen.
A well-drafted will can include substitution clauses that pass a deceased child's share to their own children — your grandchildren — so that the inheritance follows the family line as you would have intended.
Risk 3: Divorce erodes the inheritance
This is one of the most commonly overlooked risks — and one of the most significant.
If you leave money directly to your child and they later divorce, that inheritance may be treated as a matrimonial asset and taken into account in the divorce settlement. Depending on the circumstances, your child's former spouse could end up with a share of money you worked hard to leave for your family.
A discretionary trust can offer protection here. Rather than leaving money directly to your child, you leave it to a trust — with your child as a potential beneficiary alongside, for example, their own children. Because your child does not own the money outright, it is harder for a divorcing spouse to claim it as a matrimonial asset.
This isn't about being controlling or distrusting your child's partner. It's about preserving family wealth across generations, in a way that sensible families have always done.
Risk 4: Remarriage redirects the inheritance
If your spouse survives you and later remarries, their new marriage can affect what ultimately happens to your estate.
In England (but not automatically in Scotland), remarriage revokes a will. If your spouse remarries without making a new will, their estate — including the assets they inherited from you — will be distributed under the intestacy rules when they die, which may not reflect your wishes at all. And even if they do make a new will, they may choose to provide for their new spouse in ways that reduce what passes to your children.
There are ways to plan for this. A life interest trust (sometimes called an interest in possession trust) can allow your spouse to benefit from your estate during their lifetime — living in the family home, receiving income from investments — while ensuring that the underlying assets pass to your children on your spouse's death, regardless of whether they remarry.
This can feel like a delicate conversation, but it is a common and practical planning tool, and one that many couples choose together.
Risk 5: Stepchildren inherit instead of your children
If you have children from a previous relationship and your surviving spouse remarries, your children may find themselves competing with a new family for an inheritance you intended for them.
A life interest trust addresses this risk directly — your children's inheritance is ring-fenced from the outset, regardless of what happens in your spouse's life after you're gone.
Risk 6: Inheritance tax reduces what they receive
Inheritance tax is charged at 40% on estates above the nil-rate band threshold. For many families — particularly those who own property — this can represent a significant reduction in what passes to the next generation.
There are legitimate and well-established ways to reduce this, including:
- Making use of allowances and exemptions
- Leaving a proportion of your estate to charity (which can reduce the rate of inheritance tax on the rest)
- Lifetime gifting within HMRC's permitted limits
- Using trusts as part of a broader inheritance tax planning strategy
None of these require anything complicated or aggressive. They simply require planning — and a will that reflects that planning.
What does this mean in practice?
For many families, a straightforward will with a trust for minor children is all that's needed. For others — particularly those with more complex family structures, significant assets, or property — a more detailed approach makes sense.
The good news is that none of this is as complicated or expensive as it sounds. A conversation with a lawyer is the right starting point, and it costs nothing to have that conversation with us.
At Your Wills Team, we offer a free 30-minute call to talk through your family's situation and tell you what — if anything — you need to put in place.
[Book your free call here →](https://calendly.com/yourlegalteam/30min)
Your Wills Team is part of the Your Legal Team family. All services are provided by qualified UK lawyers at fixed, transparent fees.
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