Can You Leave Assets to Grandchildren Without a Will?

Many people want part of their estate to pass directly to their grandchildren. This may be because they want to support a first home or pass wealth to the next generation where their own children are already financially settled.

The difficulty is that the law does not work on assumption. If someone dies without a valid Will, their estate is distributed under the rules of intestacy. Those rules follow a fixed legal order, rather than the wishes someone may have discussed during their lifetime.

This can create problems where a grandparent wants to leave money or property directly to grandchildren, especially if they want to skip a generation.

What happens if there is no Will?

When someone dies without a valid Will, they are said to have died intestate (without a Will). Their estate is then distributed according to the intestacy rules.

These rules decide who is entitled to inherit. They do not take account of informal promises, personal preferences, family conversations or whether one relative may have a greater financial need than another.

In broad terms, a surviving spouse or civil partner will usually have priority. Children may also inherit, depending on the family circumstances and the value of the estate. Where there is no surviving spouse or civil partner, children will usually inherit ahead of more distant relatives.

This means grandchildren do not automatically inherit simply because they are grandchildren.

Do grandchildren inherit under intestacy?

Grandchildren may inherit under intestacy, but usually only where their parent, who would have inherited from the estate, has already died.

For example, if a grandparent dies without a Will and their child has already died, that child’s children may inherit their parent’s share. In that situation, the grandchildren effectively step into their parent’s place.

However, if the grandparent’s children are still alive, the grandchildren would not normally receive a direct share under the intestacy rules. The estate would pass according to the statutory order, even if the grandparent would have preferred some of it to go straight to the grandchildren.

That is why a Will is important where someone wants to leave assets directly to grandchildren.

Using a Will to benefit grandchildren

For grandchildren, a Will is often used to leave a fixed sum of money, a percentage of the estate, a specific asset, or funds to be held until they reach a certain age.

Where grandchildren are young, it may also be appropriate to include trust arrangements. This allows money or assets to be managed by trustees until the grandchildren are old enough to inherit, or until certain conditions are met.

This can be particularly useful where the gift is substantial, where there are several grandchildren, or where the person making the Will wants more control over how and when the inheritance is received.

The risk of relying on family arrangements

Some people assume that if they leave everything to their children, those children will pass something on to the grandchildren later. That may happen, but it is not guaranteed.

Once assets have passed to a beneficiary, they form part of that person’s own financial position. Their circumstances may change. They may divorce, become bankrupt, lose capacity, die unexpectedly or simply decide not to pass the money on.

This issue can be especially important in blended families, where intestacy rules may not reflect the relationships that exist within the family. If someone wants a step-grandchild, or another person who may not automatically inherit under intestacy, to receive part of their estate, this should be set out clearly in a Will.

Planning ahead

Leaving assets to grandchildren can be a thoughtful way to support the next generation, but it should be planned properly. Intestacy rules will not automatically skip a generation because that is what someone would have wanted.

A Will allows you to decide who should inherit, when they should inherit and how assets should be managed if beneficiaries are still young.

If you would like to leave assets to your grandchildren, or review whether your current Will still reflects your wishes, mlplaw’s Private Client team can help you put the right arrangements in place.