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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Large financial gift to one adult child

420 replies

Betty52 · 03/02/2020 22:05

Is it unreasonable to make a significant financial gift to one (adult) child but not the other in these circumstances?

Two parents (DPs), in their late 60s, have two adult children (DC1 and DC2) in their late 30s/early 40s. Both DCs are married/long term partner and each have two of their own children. DC1s household income is roughly 3 times that of DC2s. DC1 has a decent family home in a pleasant area of an expensive part of the country. They’re in the process of doing major building work and have re-mortgaged to retirement for that but they’ve built up a lot of equity because of the location and work they’ve done. Their children are pre-teen and settled in school so they have no reason to move. DC2 has a 2-bed flat in an OK area in a cheap part of the country. There is very little equity due to prices not rising much in this part of the country and having had to buy a previous partner out of the flat. They hadn't intended to have children but changed their minds and now have two pre-schoolers in a flat that’s too small. They would like to move to have more bedrooms/a garden/near better schools but can’t afford it without help.

So would it be unreasonable to gift DC2 and partner the c£100-120K needed to buy a family home in a nicer part of town? This would be an ‘advance on inheritance’ so DC1 would get the same amount in DPs will (with the remainder split equally). DPs both in good health (and still have two of their own parents) so want to enjoy life now and be able to plan for what might be quite a long future. For this reason, DPs can’t afford to give both DCs this amount now and giving half to each wouldn’t give DC2 enough to move to the house/area that they want.

So is it unreasonable to give DC2 that large gift now and make it up to DC1 in the will? (YABU = it is unreasonable, YANBU = it is not unreasonable)

OP posts:
ShirleyPhallus · 03/02/2020 22:09

Fine so long as it’s set out that children will both be aware of set up

I’d also speak to wealthier kid in advance as you never know exactly what someone’s financial circumstances are and they could have less than you think

If I was better off child I’d be pleased for my siblings but know money can be contentious for some families

Mamato2gorgeousboys · 03/02/2020 22:09

I definitely understand why the Dp would want to do this. However (and this is my opinion only), it should only ever be done in agreement with Dc1.

Dc1 may have a nicer house etc. but they have probably worked hard to get it and seem to have lots of expenses with the building work. Would giving both Dc 60k each be an option? One could use it for building work and the other to move.

MargotLargot · 03/02/2020 22:11

I don’t think it’s unreasonable, but I think they should consider discussing this with DC1.

There’s a similar situation in my family. I’m financially the most comfortable out of my siblings and will inherit (hopefully a long time off), whereas some of my siblings have been given gifts and won’t inherit.

I don’t consider what my parents do with their money to be any of my business, but I did appreciate that they discussed it with me and told me why they were doing it that way. They didn’t ask my permission or anything, but just informed me.

thejoysofboys · 03/02/2020 22:12

This wouldn’t cause an issue in my family because myself and my sibling would both want each other to be comfortable and happy.
But I’d definitely agree that the DPs should discuss it with both of their children first to avoid any confusion or misunderstanding

IndecentFeminist · 03/02/2020 22:12

You can't guarantee having anything left to leave to DC 1 though, as you may spend it elsewhere, on care etc.

Tbh DC 2 didn't need to have two kids in a small flat. That was a choice. You could give them half that and help them up, as against gifting them a huge sum.

Sarahlou63 · 03/02/2020 22:13

As an advance on inheritance I think it's fine but take legal advice to make sure your current and future wishes are watertight. For example, what happens if there's not (the equivalent after inflation) to gift DC1 the same amount once care home fees have reduced the pot?

fairgroundsnack · 03/02/2020 22:13

No I wouldn’t do this, unless dc1 agreed. It potentially makes dc1 feel less loved and valued. A promise of future inheritance could easily be used up in care home costs etc.

IndecentFeminist · 03/02/2020 22:13

Would dc2 still have a mortgage?

nocoolnamesleft · 03/02/2020 22:16

Could this be seen as deliberate deprivation of assets?

ChicCroissant · 03/02/2020 22:16

YABU IMO, what if there is no money left to DC1? You don't know what you'll need your money for in the future.

Are you DC1?

converseandjeans · 03/02/2020 22:16

I think the money should be split equally. It's not DC1 fault that DC2 isn't as well off. So £55k each.

Original poster
Betty52 · 03/02/2020 22:17

Thanks for the replies, they are very helpful
Yes DC2 would still have a mortgage - the (small) equity in flat+mortgage+gift would get the house they want.

OP posts:
EasterIssland · 03/02/2020 22:17

I wouldn’t. What if by dc1 dies passes away because xyz before parents ? Won’t be ever able to enjoy the inheritance they’re due.
As another pp has pointed out dc2 decided to have 2 children whilst living in a flat so should have planned for that.
I’d only do it if I gave 60-60k each and they can spend it in what they want.

converseandjeans · 03/02/2020 22:18

What if there's no inheritance after care home fees etc?

SometimesMaybe · 03/02/2020 22:18

If you have money “spare” I think it is a very
Sensible thing to do - you can improve the life of your children and grandchildren and actually get to see that rather than waiting until after you are dead. Agree with pp that you should tell other sibling what’s happening as a matter of courtesy.

IndecentFeminist · 03/02/2020 22:19

It doesn't give them any incentive to do anything for themselves does it? Perhaps give them a little to try to work up the ladder? We all want stuff, I'm sure dc1 would rather not be mortgaged up to retirement to get 'the house they want', but needs must.

ChazsBrilliantAttitude · 03/02/2020 22:21

It has to be open and and legally watertight.

Also if DC1 has sacrificed and worked really hard to get where they are and DC2 has mucked around then DC1 might not feel too happy.

Is there any risk that the inheritance pot could be too small to even things up?

My DDad helped out DB more financially during DDad’s lifetime with no adjustment to the inheritance. This was with my full knowledge and agreement as I am in a much higher paying profession. He needed the money more than me.

StCharlotte · 03/02/2020 22:21

You can't guarantee having anything left to leave to DC 1 though, as you may spend it elsewhere, on care etc.

This.

Triglesoffy · 03/02/2020 22:21

What if the money is eaten up with care home fees?

MargeryB · 03/02/2020 22:22

It's a bad plan. Too much can go wrong. Most obvious one is dc1 becomes in need of support e.g their spouse dies, a child becomes disabled and they become a carer or a million and one other things. DPs then can't support dc1 because dc2 has taken all their cash.

This is aside from any feelings about this, dc1 may feel dc2 is always bailed out, protected from bad decisions, favoured etc.

Janaih · 03/02/2020 22:23

Even in a pricey part of the country, dc2 could significantly improve their set up with 60k.

If you died (god forbid) within 7 years think they would have to pay tax on it or something though?

Janaih · 03/02/2020 22:24

Agree @MargeryB, way too many variables. Put this plan in the bin.

Motorina · 03/02/2020 22:25

I was the DC1 in this scenario. I was informed - after the fact - that my parents were giving their home to my brother, because he had kids and needed it, and I am childless and do not. His earning potential is in fact much greater than mine, and the ‘need’ was much more to do with getting the grandkids close than any financial difficulty.

It was the final straw after years of being treated as second rate because I hadn’t produced grandchildren.

I was immensely hurt, by the decision but - more - because I was left out of the decision-making. I haven’t had contact with my parents for three years, and contact with my brother is tentative at best.

I advise against it. Too much potential for hurt all round. If you’re going to do it, make sure everyone is on board first.

LightDrizzle · 03/02/2020 22:26

I would do this with DC1’s agreement, as long as DC2 didn’t have a history of poor financial management and decision making and/or substance abuse.

Soontobe60 · 03/02/2020 22:26

OP, youndo realise that you may well have to pay for care home fees in the future? If it's maybe 10 years off, then DD2 will have had her inheritance and DD1 end up with nothing.
I would give both DDs equal amounts now. Dd2 can get a maximum mortgage knowing that she will be able to pay it off early from inheritance when DPs die.