Large financial gift to one adult child

[Betty52]

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)

So... you have already decided to do this, the house purchase is in progress and without the full £120K they can't afford the house.

Why ask here? All you have done is opened up your made up mind to dissenting views.

I hope it goes well for you!

Just another word of warning - as executor of my late mum’s estate arrangements similar to those envisaged here are indeed dependant to a huge extent on sibling relationships. But those relationships change!! Bitter things have been said amongst my sibling group about historic support given to us at different times for different reasons. To some extent there have been apologies and ‘I’m just not coping very well with bereavement’ - type discussions. All perfectly understandable. However I know that there is lingering and meaningful bitterness of one sibling despite full support and agreement at the time. Things really change when people die and it comes to the crunch.

I wouldnt do that. We have given lump sums (not this big) to all of our children at differnet times dependant on need alone. Throughout the years we have balanced this up in various small ways. No give will EVER be subtracted fom inheritance for all the reasons mentioned above. I think you should come clean and tell us which party you are in this sceneario. It is a recipe for a family fall out

So they don't really live in a "cheap part of the country" if they need 300K to buy a house then?

Perhaps they could be encouraged to move somewhere else (where 50-60K would be enough?

Whoo sorry I missed a whole chunk of the thread

Betty52, so it sounds like the plan is already decided without reference to DC1? If so, I hope they’re okay with it.

If not, they’re in the unenviable position of either swallowing their own hurt, or convincing themselves that they really don’t deserve equal treatment (I tried this and it devastated my self-esteem), being the ‘bad guy’, or walking away.

There’s a good chance you’ve just lit a bomb in the middle of your family. I really hope it works out for everyone involved.

It's not a cheap part of the area if they need over £100,000 giving to them to buy a £300,000 house.

Would you have been willing to give tens of thousands to DC1 so they can have the house they want? I'm guessing not.

You're essentially willing to prop up one child to have a lifestyle they can't afford when they chose to have two children in a small flat that wasn't gaining value whilst your other child has remortgaged til retirement to fund their own home. It's always the children who graft and make sensible decisions who lose out, whilst their siblings who do what they want get bailed out because their situation is obviously unfair if they can't have what they want.

Betty52 it's a horribly divisive thing to do, and looks massively like favouritism. You've already made your decision though, so why post? The inheritance will never make it fair; dc1 will probably never inherent due to care costs for you or your husband, your husband remarrying after you die and leaving everything to his 35 year old new wife, you living to be 103 and dc1 dying just after they finally pay off their mortgage at 67... But you get to be lady bountiful and dc2 will always be emotionally in your debt, of which you can remind them if you need help in the garden or someone to declutter the garage, so there's that...

Just remember to consider the Time Value of Money. 100k in 30 years is worth a lot less than 100k today.

How can you be certain that you will have the same amount of money to leave to DC1? You may have to use any assets for care later in life.

I have a similar story:

My father was always a high earner. When DB got married, he was gifted £12,000 for the wedding.

By the time my wedding came around, he had been on sick leave for a long time and lost his job. Luckily the marriage was the important bit to me, so I took the £600 he kindly gifted to us and just had a small wedding.

So circumstances changed, and now my brother has benefited from a large amount of money that I will never even come close to saving for myself.

Don't cause animosity between DC, if there's any chance at all that the same amount of money will not be available to both then don't give to either.

Didnt earn our money "at the coalface" but by inflation!! I spent the first 5 years living in a caravan thanks, my XH lost is job, didnt tell me did a "Reginald Perin", it took my 6 months to clear the mortgage. That was the deposit for our first house, 2 up 2 down, then a flat, hardly high life or big spending! We bought that in 1983, mortgage rate 12%, 18 months later, 16%, we could hardly downsize, so I had 4 jobs on the go just to keep the roof over our head. When we divorced 1990, ressession, negative euqity, house sold for consierably less than the 2 mortgages (which he had taken out before being arrsted) before I get accused of living above my means. I have worked damn hard for everything Ive got, thanks, we did ownsize, when my 2nd DH lost his job, didnt have central heating until 2006, thanks!

I'm not voting as I don't think it's as simple as saying you are BU or not.

I can see the reasons for what you are doing; I also think it has the potential to lead to enormous upset.

I'd be interested to know how DC1 really feels about all this. If I were DC1 I would feel less loved. If I were DC2 I would feel awful and would say no, thank you, you really shouldn't be doing this to my sibling.

Nowadays I think it's very very lucky if when a relative dies there is any money left over to gift to their DC.

My DGPs care fees were over 2k a week. All their money was swallowed up pretty much instantly.

Same thing is happening with my other DGPs.

Either both get something or nothing at all. I find this view quite unfair....

Yes it's unfair. It's basically says "your hard work is worthless, there was no point as you could've just been given it instead".

It would be ok to give if it was taken out of that portion of the child's will. So Say the full amount is £300k, the other child still gets £150k but other child gets £130k now and only 30k at death

Over the past few years I have noticed how precarious familial relationships can be - everything seems to be ticking along nicely, but relatively small things (smaller than this) can cause real resentment and a complete souring of the relationship. I know several people who have fallen out with family members over seemingly quite trivial things. I think this has the potential to cause enormous resentment.

OP who are you in this scenario?

By your own account, DC1 worked harder at school etc, and is reaping the benefits from that hard work, but is also now mortgaged up to the eyeballs - presumably is planning to continue to work hard to pay that off.

DC2 has chosen to have 2 children in a flat that they can't house them properly in, an area they don't want these children to go to school in.

And someone has come up with the idea of basically gifting DC2 half a house.

If you're the parent I hope you can rely on DC2 to look after you in your old age and wipe your arse if you need it, because I suspect DC1 will be telling you to go whistle.

If you want to cause resentment from DC1 then go ahead. It looks like DC2 is wanting to buy in basically the best area locally (if it is indeed a cheap area but they are still needing to pay 300k for a house).

Where was DC1's offer of help when they were having to remortgage themselves up to the eyeballs to fund renovations? And what if they end up losing their job and are at risk of losing their home? You won't be able to afford to help at all because you gave all the cash to your child who wants to live in the best area despite not having an income to match their aspirations.

You should split it evenly and DC2 could compromise and move to a slightly smaller house, in a better area but maybe not the best. Somewhere where £250k would get them a property.

Provided both adult children are ok with this then there’s no issue. My FIL gifted us a substantial amount to help with renovating our first home, he wouldn’t give the same amount to SIL because she’s an irresponsible drug addict so you can guess where the money would go. I think that’s reasonable tbh.

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

Haven't RTFT due to lack of time but this is a similar problem as I have where DD1 is married, 2 kids, nice home etc and DD2 is in her 30s, single, no home of her own and can only afford to rent away from family and friends.

Do I downsize to a cheaper flat myself, give her money to pay deposit for her own home and balance it all up in my Will (deprivation of assets is a problem too)?

However I know that there is lingering and meaningful bitterness of one sibling despite full support and agreement at the time. Things really change when people die and it comes to the crunch.

I don't so much think things change when it comes to the crunch. More people drop their inhibitions and say what they really feel. They have no reason to "keep quiet to keep the peace".

OP I still think it's a horrible thing to do. DC1 will find out and be incredibly hurt. They might not show it to keep the peace but it could be a festering wound.

There has to be a middle ground.

Where does Redsky live that you can buy a house for £50K??!

Fuck me - when I read some posts on this thread, if I were OP I would donate the lot to char

(charity)

many parents create a codependent fragile child for no objective reason, whom they keep dependent with handouts and promises all their life. It's very damaging

Agree with this. DC2 can desire a house in the best area and a small mortgage all she wants. It doesn't mean she should be entitled to it at the expense of her sibling's graft.

To sane people, 25, 50, 75k would be a HUGE improvement to their life that they'd be bowled over with happiness to receive. She'd presumably be able to buy a decent enough house in a decent enough area.

But instead she's cried to mummy about the house she wants in the BEST area, and mummy has for some reason decided that this is an appropriate way to treat her children?

I'd be fantastically disappointed if a child of mine thought that was a reasonable ask.