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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
C8H10N4O2 · 04/02/2020 08:45

It likes saying - You worked harder so you get less!!

None of the DC have earned the DPs' money. That was earned by the DPs (and since they have property and are late 60s the bulk of their assets are likely to be property inflation rather than toil at the coalface).

nannybeach · 04/02/2020 08:45

Advanced inheritance can be problematical, my (late) Father gave me the maxiimum "Wedding Gift, a lot of friends were horrified because he had far more money, but he did in fact die a couple of years later, I would have been due to pay inheritance tax. You are not "due" inheritance, it is not your "Right", its your parents money to do with as they please. I have 3 DC I have helped out financialy in many different ways over many years, they all have social housing (one earns more money whan I ever did, just chooses to spend it on designer handbags) when its "her" money, she can do as she wishes with it, but then when she has to borrow for esentials, well, thats another matter. When my F passed, I gave them all an euqal amount to do what they wanted with. I have made it clear to them, my youngest DD, who is a single parent, (through no fault of her own, multiple cheating H) and struggly, private renting, that she will get priority, to help her buy, is is on long term sickness benefit, for a condition which will not improve, he would be affected by a large cash injection, he agrees she is the most sensible of all 4, am happy to make her executor, they are all aware and perfectly happy.My late F did a similar thing, I wasnt "cut to the marrow", I didnt "expect" an inheritance, in fact he re-married 6 weeks before he died (he was aware he was dying very soon)

Sushiroller · 04/02/2020 08:46

I amazed at yanbu responses.

Agree with this
You can't guarantee having anything left to leave to DC 1 though, as you may spend it elsewhere, on care etc.
I think its an awful plan

BonnesVacances · 04/02/2020 08:47

Another way to do it would be for the £100k to go to DC2, but for DC1 have an interest in DC2's property equal to £50k at the time of purchase. That way DC1's equivalent gift isn't tied up in inheritance but the property and benefits from the investment. If and when there is an inheritance, DC2 could use it to buy DC1 out. Or over time, as the property value increases, DC2 could remortgage to release more equity to gradually buy DC1 out.

Obviously would need the agreement of DC1, so it depends on family dynamics really. I think if I could manage in my current situation, I wouldn't mind helping a sibling out in this way. But it depends on whether they're just feckless or has just been less fortunate in their choices.

GETTINGLIKEMYMOTHER · 04/02/2020 08:53

Would depend largely on this dc1 I think, and whether they’re the sort of person to be pleased for dc2, or likely to be jealous and make trouble.

We have helped ours equally, but in the OP’s circs I’d want to do the same, and I’d like to think our two would be OK with it.

CuriousaboutSamphire · 04/02/2020 08:55

Would depend largely on this dc1 I think, and whether they’re the sort of person to be pleased for dc2, or likely to be jealous and make trouble.

You forgot "or would be hurt to think they were not held in the same regard as DC2". It isn't always about the money!

Damntheman · 04/02/2020 09:00

But regard doesn't need to have anything to do with money. I don't feel less loved because my brother needed financial help more than I did.

marton4710 · 04/02/2020 09:00

It would be wise to check with a Solicitor re the 7 year rule. This relates I believe to Inheritance Tax and should either of the parents die within 7 years of the gift being made, tax could be payable on the lifetime gift.

MaybeNew · 04/02/2020 09:00

We have more siblings in our family but money has already been given on the basis of alleged need. It’s left me feeling very bitter because my IVF and severe health problems weren’t deemed serious enough for any financial help but my siblings’ divorces and refusal to work full time have been. It’s hard not to feel that I am not as loved or valued and that has made me less close to all of my family. And on the surface, we are one of those large close knit families where everyone helps everyone else.

My PILs on the other hand gave us some money recently and gave my SIL the same amount. We had a specific need for it and she had no need at all, but my PILs were adamant about treating their DC equally.

It seems awful to begrudge your sibling anything but people make different choices in life and it has almost destroyed my self esteem trying to work out why others are deemed more worthy of money or time. Plus in our family, it is always done in secret and then it comes out. It’s really unhealthy.

TeaAndStrumpets · 04/02/2020 09:02

I agree about care home costs wiping out DC1's promised inheritance. One other scenario is - Mum dies, Dad remarries and fails to make a will. Later, stepmum dies and her relatives get the lot. This happened to a friend of mine, all her late Mum's assets went to strangers.

I would split the money now.

ItWillBeBetterinAugust · 04/02/2020 09:03

C8H10N4O2 there's no reason to think dc2 is "working steadily" at being a carer or doing something socially responsible. They might be "working steadily" at anything, including a vanity or hobby based business, cold calling, a badly paid dream job in entertainment, or simply work in an O2 shop selling mobile phones, or anything at all!

Parents should treat their children the same not make value judgements about who is the most deserving - picking your favourite to give most of your money to as nanny suggests is jaw droppingly blatant, but 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.

LucheroTena · 04/02/2020 09:04

No way is this fair, it’s not like DC1 is a lottery winner or film star. They’re hardly living it up, being mortgaged to retirement. Only take this option if you feel comfortable with the fact they and you might fall out irreparably.

underneaththeash · 04/02/2020 09:04

I agree I'd give each of the children 60k each. DC1 have just taken on a huge debt which they wouldn't have to do if they'd have had the money - they'd going to be annoyed.

hairquestions2019 · 04/02/2020 09:05

"Another way to do it would be for the £100k to go to DC2, but for DC1 have an interest in DC2's property equal to £50k at the time of purchase. "

Does this work with a mortgage though? Would be interesting to know if mortgage lenders will agree to that. Is there also a problem that DC1 might be able to force a sale if s/he needs or wants to release the capital - conveyancing/land lawyers will know!

I think family shared ownership can lead to a variety of problems - who pays for maintenance/improvements, what happens if you disagree about whether to install a swimming pool in the back garden (or more realistically, whether to incur the cost of repainting the window frames?)

hairquestions2019 · 04/02/2020 09:09

"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"

Another very interesting perspective. I suppose the dparents don't see it like that, they think it's just the way things turned out.... Sometimes it is of course, but mn can be very thought-provoking!

LolaSmiles · 04/02/2020 09:20

I don't believe in treating children identically and children can need different help at different times, so wouldn't have an issue with giving one child a helping hand if the other doesn't need it (assuming they're a responsible adult doing the right things and not expecting their whims to be facilitated).

The issue here is that one child has made sacrifices, has remortgaged til retirement etc whilst the other chose to have children in a small flat and would be getting the house they WANT in a nicer area for nothing. That's really unfair and there's too much that can go wrong that continues to make things unfair to DC1.

If DC2 wants a nice house with a garden then they need to work for it themselves as they chose to have children.

Parents should split the giftable money equally. 60k would be a help to both.

AnybodyWantAChip · 04/02/2020 09:21

Your post should read;

I have 2 DC, but (like most parents), I've always had a favourite. I'm sure I've hidden it well over the years and the DC haven't noticed. My favourite has not done as as well financially as the other DC, so I can see an opportunity to give her a large amount money without having to help the other DC. I'm sure the other DC understands that my favourite is far more deserving of my support. AIBU?

nannybeach · 04/02/2020 09:27

I havent made a fragile child, or picked a favorite,this one is strong and tough, hardly her fault that the H coudlnt keep it in his trousers, and let her massive debts, she wasnt elegible for social housing, she works full time, unsocial hours.2 DC received social housing because of disabilities, the one who earn fantastic money, chose to spend it, as they do, (she is a higher manager of a very large corporation in this country) theres holidays abroad,expensive clothes, some "habits" I am not happy with will leave to your imagination, not comfortable putting them out there. My youngest has never asked for anything, she would feed her DKs and starve herself rather than ask for help. My 2 disabled I had paid their rent on occasions when benefit has been stopped for changovers, and their bills, even on occasions when my DH had lost his job, I worked to support my adult kids.We are a close knit family, no secrets, 2 are fragile health wise, all were taught to stand on their own 2 feet, had all left home by 18.

namechanger0989 · 04/02/2020 09:31

Ultimately it's up to dps what they do with their money but I think it depends on circumstances whether they are doing right thing or not.

In my family me and my husband have the bigger house in the nicer area and would seem 'richer' than my sibling, living in smaller house in not as good area, works part time but gets tax credits etc to help.
Our situation is slightly different as We are both about to inherit a large ish sum, but this will make her mortgage free with plenty left over. It will significantly reduce our mortgage but not clear it.

My hubby and I work bloody hard for everything we have and it's not been easy along the way. (Our house is not extravagant btw, just big enough for us)
Sibling works part time as does her hubby (who is an absolute waste of space & in £1000s debt and doesn't contribute to household at all).

I think it would annoy me if a parent was giving my sibling a huge amount just because they can't afford a house due to their own life choices.

It wouldn't however annoy me if my sibling worked just as hard but just didn't earn as much or had some bad luck etc.

drspouse · 04/02/2020 09:33

You can't guarantee having anything left to leave to DC 1 though, as you may spend it elsewhere, on care etc.
Bear in mind (I may have missed this) that DC1 will also potentially be paying tax on the inheritance.

FLOrenze · 04/02/2020 09:43

I would do it but make sure you get legal protection for your child ? In my case they separate. I have had my fingers burnt twice, 20 years ago I gave 85K to one son only for his wife to leave him within 2 years. The. The new man enjoyed the benefit of the house I helped pay for.

Now by youngest has separated and his partner wants to give my son a lump sum which is much less then the wedding gift I gave them.

namechange8765456 · 04/02/2020 09:52

@poshme How massively unfair for you. :( I'm an only child so this doesn't apply to me (and my parents won't leave a lot behind so it's moot on that score too) but I have 3 DCs and I wouldn't dream of being so old fashionedly cruel as to bring one of them up with more than the other two and to punish the other two for their natural feelings about that.

TheReef · 04/02/2020 09:55

Myself and my db have had the same opportunities, I chose to leave school at 16 and go into an apprenticeship, I've always worked and now I own my own house, had kids later in life and have a good job that pays well enough for me to have luxuries etc.

My db chose to go to uni, he travelled a lot and has worked in low paid jobs since, he chose to have children earlier than me, and he lives in a v expensive place in the uk, and as such, on paper isn't as well off as me. Although both of us are lucky in that we are happy and healthy, as are our kids.

My mum used to try and 'help' my brother a lot financially, she'd arrange weekends away and expect me to help pay for my db and his kids, she'd want to give him money too, but thankfully my dad and my db would never agree to it, as it wasn't fair.

I suppose what I'm trying to say is that both me and my db had the same opportunities in life, we chose different paths, neither of which was the right one, but just because one party appears to have themselves sorted financially doesn't make it right or fair to favour the other when it comes to financial handouts.

A lot can change in a few years, parents can go into care eating away at all savings and equity in houses, financially stable children can experience ill health or redundancy. What's to say your financially stable child needs a 100k pay out in a few years time so they don't lose the their house, can you afford to do that in a few years time.

My Dad, as do I with my kids now, will never favour one above the other. If I can't afford two ice creams them no one gets one

LillianGish · 04/02/2020 09:55

There so much that is unknown in this scenario - what is the relationship like between the two DCs for a start? Lots of people are answering on here based on their own sibling relationships - the siblings in your example may not have such a relationship. I'm of the opinion that you should always be scrupulously fair to your children - this was my parent's principle and it is one that I have followed with my own DC. But being fair doesn't mean you can always keep them the same once they have left home. It is much more difficult once they leave home and get jobs, meet partners and start making their own financial decisions. You can't expect to keep them the same, but you can continue to treat them fairly and equally. You have to accept that one may make wise and prudent financial decisions while the other may not. Of course if disaster or tragedy strikes that is a different kettle of fish entirely, but I don't think that's the case in your example.

Betty52 · 04/02/2020 09:56

Thanks everyone for the comments. Just a few answers to Qs.

The flat is valued at a bit under £100K and the houses in the better area (with much better schools) are around £300K. The flat hasn't really gained any value in the 10+ years DC2 has had it so the equity is just mortgage repayments plus a bit from the partner's savings. That means that although they are taking out a fairly big mortgage they can only do it with the full gift. Giving half to both wouldn't be enough and they want to do it so the DGC start in these schools rather than waiting a few years then moving again.

DC2 is not married and they're quite against it plus DC2's partner has had a nasty divorce in past, so I don' think they will. They want to be joint tenants of the house.

OP posts:
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