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)

I wonder how much the OP's brother is bending his parents' ears about needing a house in that area. £300k is a lot of money. There are other areas they could move to with decent schools too I would have thought.

I understand the OP saying because it won't be protected effectively if her brother and his partner split up she'll get half.

In my situation one of the times I brought it up my mother said well I'll leave it all to your brother then. I said ok but he's got no children to leave it to and it'll end up going to his girlfriend's two children and not my two children, in other words family. And her two children will be benefiting from their own grandparents' money eventually possibly. How is that fair on my children, your grandchildren.

Hopefully this will be resolved in the next six months and I won't have anything to do with him. He still tries to bully me so I won't be in the same room as him.

OP sorry you're in this situation.

I think (like many other people) whilst your DP's are trying to do something nice/kind they haven't really thought this through properly.

Whilst it true they can spend their money as they see fit, they also need to understand that fundamentally what they are proposing isn't fair and importantly can't be made fair down the line because:

• no-one knows what the value of their estate will be. Care could erode this massively/totally

• even if their estate retains funds £150k now vs. £150k in twenty years is not the same amount wrt inflation

• reviving such a huge amount of money at this time in your life is more valuable/useful than reviving it when you've potentially already retired yourself

• saying they'll change their will and doing it are two different things

• if your DB and partner spilt they've given money to her in preference to their daughter.

Essentially, they are choosing to "level up" your sibling even though from what you've posted his position is that made of his own "lifestyle" choices.

That's not being fair - it's penalising you for hard work/good choices and emotionally that's going to hurt.

Personally I've never heard of an arrangement like this working out well. It's a recipe for resentment.

The only circumstances where I can see it's justified in helping one child financially over another is when one child is disadvantaged through disability and has a very clear fiscal need that is not in any way related to their life choices.

Personally I think wanting predominantly to help their grandchildren they've got carried away and convinced themselves they can redress the balance down the line.

You can keep quiet but tbh I wouldn't. From what you've posted I think they are too immersed now to back out but regardless I'd want my parents to understand the ramifications.

They are mad to do this without speaking to a financial advisor and this is where I would start. I'd tell them they really should get professional advice and list the reasons above as to why.

There will be posters who will cry "money grabbing" but it's about so much more than that. It's a big emotional punch, which is exactly why I would speak to your parents about how you feel.

It’s hard to know all the ins and outs. It did happen in my family. I was dc1 and my youngest brother dc2, my parents spoke to me and middle brother and we were both very happy for it to happen as youngest brother really needed the help at that point in his life for his family to get a decent house. The will has been changed to reflect the gift and all is fine in our family dynamic. We are having a tougher time financially since but still ok and still so happy for youngest bro. But it does so depend on individuals and circumstances.

So not only are they demonstrating their favouritism to your brother, they are doing it in a financially irresponsible way so half of the money is actually going to your SIL as a tenant in common - and with an expectation from everyone that you will not complain and you will pick up the majority of their care needs.

Ouch.

If they can't afford to buy the house without a £100k deposit then they can't afford the house and need to be rethinking the area they want to move to.
So selfish. I would never begrudge my parents helping my sister out if she needed help and visa Versa but £100k is ridiculous and I believe should be shared not given to one person.
I don't know how you are not absolutely fuming at this.

strawberry - I think the parents are playing on how reasonable the OP is. It's a very hard thing to challenge as it makes you look greedy. It's just unfair. How people can't see that I don't know.

Or Annie they've just got carried away without thinking it through and have convinced themselves that they will make it fair down the line - which is simply impossible.

The problem here is that the plan seems quite "developed" - looking at Rightmove etc.

As such I think it's likely to be virtually impossible to get them to back out of this.

All I think the OP can press is:

A) if her brother wants the money it has to be protected in the instance he and his partner separated. According to the OP he's against this but I don't think it's unreasonable for the OP to press this point with her parents. If he's not willing to protect that gift he shouldn't get it.

B) As already pointed out £100k now isn't the same amount as £100k in 25 years. If they want to be fair then she gets the equivalent of £100k "now" in the will ie inflation is taken into account.

C) Her parents seek professional advice ie financial advisor and a solicitor and that their will is updated.

I think that's probably all that can be salvaged from this mess if I'm honest.

I don't think I agree that parents try to "equalize" their children. My experience (my own and those of people I know well enough to be aware of how their parents treat them and their siblings) is that one child always tends to get more, regardless of need. This is often generally the child that gives least back.

Thanks everyone for the thoughtful comments, it’s really helping me to think things through. I am sorry that so many of you have had similar (and much worse) hurtful family situations.

The thing is that I don’t think I could stop them now even if I wanted to. When they first told me it was already pretty much a done deal between my DPs and brother. There was already a shortlist of houses on Rightmove and they were in the detail of what they’d do with the space and how nursery drop offs would work. They were also lining up the estate agent for their house. That was 6 weeks ago and I wouldn’t be surprised if they now had offers accepted. My DPs have pretty much been out of the country since then on a big winter trip so I’ve not seem them since and haven’t spoken to my brother so I don't know what's happened. If I object now I think they’ll just go ahead anyway and it’ll make me feel even more disregarded. If they did stop I am sure that my brother and family would be extremely upset and then it would cause a huge rift anyway and I would definitely be seen as the 'dog in the manger' trying to snatch a happy future away from a 2 and 3 year old.

You won't know until you ask though, OP. I do think it is better to raise it now rather than after.

I had a very similar situation. I was like you and never expected anything from my parents, whereas my sibling was happy to always take my parent’s money and spend very frivolously. I think what hurt the most was that now our children are treated so unequally. We have a very different relationship now, and that suits me because I feel like I can be more selfish and do what suits me, rather than always feeling guilty or putting their needs above mine or my children’s. We do still have a good relationship, but I I now know I will not feel guilty not providing any care if needed. (Although I doubt my sibling will either so they may have to sell assets anyway) I will be very practical, as I have always been, and of course I will do what I can to help, but my immediate family are my priority now.

I agree. And if it were to change your parents' minds (unlikely however that is) and your brother is annoyed with you then just say it's unfair and I wouldn't have done it to you. You saw $ signs in front of your eyes and didn't give me a thought.

It's up to you but I would just tell my parents I'm not happy about it. Even if they don't change their minds they at least know.

Playing devil's advocate, why does it need to be "fair"? It is the DPs' money to do with as they wish surely? Somebody I know well makes large contributions to the finances of their apparently less well off DC and it is never questioned by the superficially more financially secure DC when in fact the superficially more secure DC just doesn't talk about their financial situation and the less financially secure DC is in that position as a result of their and their spouse's decision making. It is up to the dp how they spend their money. Surely most DC have different financial contributions along the way e.g. unequal value Christmas gifts etc? The whole question of inheritance, rights to dps' money is very tricky indeed.

Unreasonable. They could live for another 20 years, and circumstances may change before then.
Or it may end up going onto their care home fees!
Give both the same now, or not at all.

Op, they may not change their minds, but I think that you should let them know that you are not happy about the situation and explain why. If you don’t you will regret it and your dps will convince themselves that you are ok with the situation.
I would urge other parents to treat your children equally.

Yes, EricBana I completely agree that it's DPs money to do with as they wish but they can't control the emotional consequences of that decision.

Betty I think you have to talk to them. Tell them how cut you are that you are being over looked. They clearly can't see it so open up their eyes.

The damage is done, anything now is a damage limitation exercise.

This happened to my DH, although we have two children and his younger brother got engaged to a 19 year old who unsurprisingly is still training. His parents have consistently gifted him substantial sums of money, including a deposit for a flat, whilst my DH has been given nothing, he works in a much higher paid job than his parents and brother but we live in London and have considerable costs. He’s hurt by the decision but not at all angry and pleased for his brother. It’s caused more distance though. Particularly when his brother boasts that he’ll have 50k saved up soon.

I don't think you should infer that they love you less because they are helping out your brother. In future I might be somewhat put out if I chose to help one of my DC and the other protested that it was not fair and wanted a legal agreement in place to "even things up" on my death. The fact that your dps told you suggests to me that they didn't want it to be perceived as anything more than helping dc2 out, they could have done it covertly. I have no idea how my dp choose to distribute their money but it won't be equally at each decision point. Sorry you are upset though, that is not good.

My Mum did exactly this. She gave me £70k to buy my house (I was renting). She discussed it fully with my brother before hand and he had no problem with it. Her will has been changed so that £70k goes to my brother and then the remainder would be split between us.

I'm so grateful to them both for doing it.

I would advise treating each child equally so if you can afford to gift £120k give each child £60k each. This would allow DC2 to improve their living conditions and DC1 to pay for building work so not have to have mortgage until retirement which is a huge commitment as no one knows how their health will go. My dh's parents did something very similar gifted his brother money now and said my dh would get his on their death. My dh was very hurt as he felt less loved after years of his brother being the obvious favourite, for him it was the final straw. Now they hardly speak. My Mum left me and my 4 sisters the same amount of inheritance each and our situations are very different with one sister very poor and also living in overcrowded home, whilst the rest of us are all ok.

Kinneddar your DB should get more than just the first 70k.
By the time your parents pass, that will be worth less than the 70k they gave you purely due to inflation. Your DB will probably also need to pay a mortgage

Well that was the arrangement that was made between my Mum & my Brother before I knew anything about it. They discussed it at length before I knew it was something Mum was considering so he is quite happy with it. And no he wont have a mortgage

Oh op, this is why I will view to treat my DC the same. It's like they knew you'd be upset so planned the whole thing out so that it reached a stage where you couldn't say you were unhappy without looking like the bad guy. I was given a big lump of cash for a house by my DDad, as an only child I think that this is a true advance payment of inheritance. In terms of your 'SIL' benefitting from the money, it is a risk and I think your parents should check that out. DH could technically walk with half of mine but it's a risk I was willing to take because we are a team.
My DH has a similar situation that will arise in terms of unequal inheritance, and it does raise questions about what is fair.
I think the main thing here though is that you are upset and for that reason alone they are being unreasonable.

I don't think you should infer that they love you less because they are helping out your brother.

It would be lovely if people could think like this but in reality they can't. If your parents consistently gave the best piece of meat and more potatoes and a special dessert to your sibling duing your entire childhood would you think that they are just helping out your brother at dinner? Or would you draw your own conclusions. Similarly if a parent gives 120K (which is a HUGE sum) to one sibling and nothing to the other - well I know how I would feel -- lesser, less loved, less important.

The OP's parents are being tone-deaf to family relationships. And thick stupid when it comes to the partner.