Protecting children's wealth on divorce and remarriage

31 July 2014

Chitty Chitty Bang Bang, Sleepless in Seattle, Miracle on 34th Street – all heart-warming tales of single parents who find love again.  But all are alarmingly silent about whether the parent in question took steps to protect their wealth for their children’s future.

How can Caractacus Potts ensure that Truly Scrumptious does not blow Jeremy and Jemimah’s inheritance on toot sweets? 

With 42% of marriages expected to end in divorce and many parents remarrying, it is important to protect your children’s financial future and inheritance. From separation to remarriage there are things you can do to ensure that your children are provided for.


If you separate, consider making a new Will in case you die while still legally married.  Your spouse (or civil partner) is probably the main beneficiary and if you don’t have a Will, they will inherit at least part of your estate under the intestacy rules, even if you are no longer together. 


Divorce does not automatically revoke a Will but mention of your former spouse may be ‘erased’, as if they had died.  You should review your Will now, particularly as your financial circumstances have changed during the divorce.


You can also use your Will to appoint someone to be your children’s guardian if both parents die.  Despite the divorce, it is best to appoint the same person to prevent arguments.  If no guardian is appointed, then this will be up to the courts. 

Giving and saving

You can plan for your children’s future by making gifts to them during your lifetime.  This gets assets out of your estate so they are less vulnerable to attack on divorce and may reduce the taxes due on your death.

Children pay tax on savings just like adults.  However, tax-free options are available, like Junior ISAs and certain National Savings & Investments products.

Take care with taxable savings accounts.  If these earn more than £100 per year on money given to them by a parent this income is taxed at the parent’s rate, which is often higher.

You can consider settling assets into trust, particularly if you are concerned that your children are too young and inexperienced to manage large amounts of money.


If you meet someone new, get legal advice before you move in.  ‘Common law marriage’ is a myth - if you move into their home, your rights are limited.  On the flip-side, if they move in with you, they may acquire an interest in your home which you did not intend.


To protect your wealth for your children’s future, consider a prenuptial agreement.  These are not (yet) legally-binding in the UK but, if drawn up properly, judges are increasingly likely to take them into account when dividing assets on divorce.


Marriage generally revokes any existing Will so you should make a new one.  You can use your Will to provide for your new spouse while protecting your children’s future by, for example, giving your spouse a ‘life interest’.  They receive any income and can live in the home but, on their death, the capital passes to your children.

First published in The Guardian in June 2014.

Further information

To find out more about protecting your children’s wealth, please contact a member of our team.

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