Discussion on inheritance - is it sometimes ok to give children different amounts.

[Whattheactual20201]

Was talking to parents the other day and then DB
We are a family of 3 siblings, I am the youngest at 28 then the eldest is 36.
I have 2 children soon to be 3, my own house with a very small mortgage and not much left to pay. We survive and have luxuries. I do have savings
DB who is a few years older has 1 child but they are trying for number 2 and has a house with an affordable mortgage and a great income.
Eldest is DS who has one child and one on the way. She has always worked as hard as us but does earn a lot less and rents has no savings and lives a bit more day to day than we do.

My parents have always told us the grandkids will have their own “ pot “ which will be equal.

However us as their children will get different amounts due to circumstances.
They would want to leave the house to sister
With w smaller cash inheritance
Then a bigger cash inheritance to me and DB ( it wouldn’t be as much as what the house is worth by any stretch )

I am ok with this and see their point in a way however DB feels a bit hurt they would leave the house to only one of us ?

I can see why they would want to do this. They'll rest easier knowing that all their children have a roof over their heads.

I think the thing to do is not look at the inheritance but look at the situation if your sibling. My dad rang me once quite stressed. My sister has the chance to buy a good house near them, bit of a stretch but perfect for her. He wanted to help her with a gift but couldn't give me the same. I didn't even let him finish what he was saying. I earn twice what she does and dh earns more. We are half way through a mortgage term, we have good pensions. I care a lot more about my sister's security than any faffing with 'equality'.

My brother got more than me to help him buy a house. We had already bought one so fair I guess. The only thing was that he couldn't afford to buy a house as he had 3 children. We only had one child because we knew we couldn't afford to buy and pay for nursery, uni etc with more. A bit of me thought it was unfair as I've always been the cautious one with money so had more money saved and took better financial decisions if that makes sense. It wasn't the end of the world though and I haven't let it bother me.

I think maybe I don’t see it the same way because I am happy with my life and don’t really feel like I’m in need of it.
I have a modest 3 bed terraced house in a nice area of London/Surrey.
I have a modest car and we have a life where the kids can do their clubs Etc

@PeggyPorschen Where did I say I wouldn't have helped the OP? I just would have made sure I helped the others equally, or had enough to do so. You missed the point, if they couldn't help the others, had no possibility of helping the others should they have helped the OP? I read your post as you would only do it if you could do the same for the others so wouldn't do it if you couldn't guarantee that.

I agree that more should be left to the person who needed the most; specially if that person has also worked hard, has been a good child and doesn’t own a house because it has been less fortunate than the other 2.

Hot Your sentiments are entirely understandable. I think I’d feel the same (I am an only child do will never be in this position). But it’s an eye opener isn’t it, when you realise how you’re viewed.

I am presuming your parent's estate is below the IHT level? I think only one PP has referred to IHT - on page 6! I am repeating - if the estate is subject to IHT and DS gets house as an asset - the IHT will have to come out of the remaining estate - presumably cash and investments - which will leave you and DB with even less than you may have thought you would have received.

It needs careful thinking.

1. If relationships during life weren’t equal (ie if one siblings was ‘golden child’, or one sibling didn’t have good relationship with one or other parent then this real (or perceived) inequalities during the life of the parent/s will likely cause problems on death if splits are unequal. Ie - any sibling who gets less is likely to confuse that/see that as lesser love. Even where the inequality makes logical sense.
2. Depends on family dynamic. My parents as they got older were most concerned that we were all as ok as we could be. That meant different things when looking at each sibling’s financial situation (Even when building in Eg possibility of relationship breakdown etc). So if the children know their parents to be pragmatic/utilitarian in approach to money then it will make sense. If not unequal shares will come as a huge shock.

After my own mum died (unequal) I spoke to one of my siblings and outlined my own likely will and she told me hers. I did this on the basis i didn’t want there to be surprise or upset and so did she. We were both glad we had opened up a bit about likely shares etc. It’s tricky. One way the one who gets most (if unequal) can slightly Make it fair is to shoulder more of the inheritance aspect of the estate. Ie so that any sibling with less doesn’t in effect pay iht on more than their share. Post distribution adjustments. Even that can be tricky to broach though.

Please do take IHT advice. I agree with a PP that your current plan is very tax inefficient - if your DF leaves his legacy to his DC (in any proportions) rather than your DM it is likely his estate will end up paying 40% IHT so you will all only get 60% of what he intended to leave you.

There is a concession for leaving the family home to a child or grandchild, but that is reduced in value for a substantial estate, which it sounds as if this would be.

It will almost certainly be more tax efficient for him to leave everything to your DM and for her to make gifts to all of you of an equivalent amount. Provided she lives 7 years there will be no IHT.

I'd sell the big house now so the estate has cash and your DM can buy her smaller house.

FWIW on the shares - I'd say equal too (less your £50k in your case). In trying to do financial justice to your DSis your parents may damage her relationship with her DB and DB's view of his family for life. Not worth it

@tara66 I am not really fussed at all on how much I am left. I see it as both my parents worked hard. It is his money and his money to do as he pleases with.

My DM left us all very different amounts - one sibling got her house, etc, and the rest of us a very small amount of money from her modest savings. DM had rung us all up when she was making the will, and said "I'm leaving the house to X, you OK with that?" And we all said yes, because three of us were capable of making our own way in life, and the favoured sibling would always struggle.

DM died more than a decade ago, and there hasn't been any family fallout.

@TooManyDogsandChildren

My guess is the reason this is being bought up now is for that exact reason on the best way to do but the unequal shares still stand if that make sense.

As in whether we come up with a. Agreement before hand and work it out that we can do exactly as you say.

No, it should be split equally.

Maybe OPs sister has also worked her arse off but in a lower paid job, working in childcare springs to mind as an example. She may also have met her partner abit later in life, and he or she may also earn less, there's lots of reasons a sibling might not have gotten on the ladder and it doesn't mean she is sitting around waiting for a hand out

I think it's not unreasonable to want to give extra support to one child if the others don't need it. But also money can tear families apart so the brother would need to come round to the idea

@ancientgran I knew someone would quote selectively and twist what I said, when I meant precisely the opposite. It is about sentiment. When you die you are not there any more to give a hug or sound advice or to be a shoulder to cry on. When you divide you assets among those you care about and leave more to one than another, unless there are very good reasons that are understood then it does cause hurt. This is why I said wills should not be a secret. They are best shared openly and, if there is a deviation from the normal even split then the opportunity for an honest and open discussion before anything is finalised. Otherwise you risk causing a rift between your children.

There are exceptions - severely mentally and/or physically children who need additional support, family businesses like farms that cannot be split, offspring who spiral into addiction and would piss any inheritance up the wall... But the OP is not in such an exceptional situation. Today the family home is usually the repository of most of a person's wealth (if it isn't sold to pay for care). As such it is likely that giving that to one child is the equivalent of giving them much more than half of their wealth. Furthermore, any inheritance tax would be paid from the more liquid unnamed assets before the estate was distributed, further exacerbating the problem. An even split in percentage terms takes all of those problems away. The sibling without a house gets a substantial deposit towards one and there is no risk of a family rift.

My parents are great people and I know in their heads they are just trying to figure out how to work it out for all of us. I am sure they will take my DB opinions in to account
They really are wonderful
I will offer the 50k off mine but tbh I don’t think anyone in the family would accept that.
I was very lucky to get them as a family ( adopted ) but we have all been treated equally fair in life.

I own a house, my sister is going to inherit my mums flat. It's maybe worth 150K. Whilst the money would be nice I'd rather know that she has a home. Whilst equality is ideal I think you do have to take into account individual circumstances. 75K to me would be a nice holiday and redoing the conservatory and the rest in savings. Nice but not necessary.

That said care costs could mean there isn't an inheritance for anyone...

Is this your childhood home? I can see that might feel different too. Even in the south east though I imagine that the sale of the house plus if you take 50k less it should be enough for a substantial deposit on a house for your sister. I would start at that. Your father may feel reassured if he can see that she is going to be stable. Will she be able to afford to maintain and pay bills on a larger house?

Of course it’s reasonable

Equal treatment and being fair are two completely different things and I think the people who complain, tend to be the usual cheeky fuckers in life.

DM left the majority of her estate to our younger brother as he had a lifelong disability and an old house needing repairs. The remaining 4 of us were perfectly happy with this arrangement and as I was the one who suggested it initially, I went with DM to the solicitors to get it properly drawn up.

@Varjakpaw

When DM died, she left the house equally to all three of us. DSis and I then sold our shares to DB, and he was able to use his share as his effective deposit. It worked well for all of us, though if that was doable for your DSis would probably depend on house prices in your parents area.

Seems like a good approach.

It's tricky. I think hurt feelings can result when there's an uneven split. It's very difficult to decide if A has less than B because A didn't work as hard, was less motivated, was born with less "bankable" skills and talents, made poor decisions, or had bad luck. I don't think it's possible to bring every child to the same level. Life isn't that tidy. Once you decide not to split things into equal portions, subjectivity comes into play. What seems fair to me won't seem fair to someone else.

I'd try not to take it personally, but it might sting if I felt that one of my siblings was given a larger inheritance because s/he hadn't done as well as I had, despite having had an equal opportunity. Of course, the help parents offer while still alive isn't likely to be completely equal, either.

Having seen the fallout of wills favouring one sibling over another I would say you are potentially going to end up with less or no contact with siblings if this isn’t discussed and sorted out. My own family have given my sibling their inheritance upfront, effectively buying them a bigger detached home on the basis I have a nice home and they won’t have. I chose to save, they made different choices. I am wrestling with fact that I am cast in bad guy role as the same amount won’t be there, care homes/ end of life care will eat that up in months. Do I insist on the letter of wishes being upheld? Even their solicitor questioned their wisdom in handing over such a sum. They are effectively putting themselves in a vulnerable situation in order to be ‘fair’ to one child.

"I had a friend who got really upset as her husband gave alot of money to his daughter to support her through uni, her daughter didn't go and she said it was so unfair. I said to her that one day her daughter might need some help for whatever reason. A few years passed, her daughter decided to do her A levels and go to uni and she then got her share. All that angst about nothing."

One of my DB resented that my parents put me through uni (just living costs, fees were free). He ended up being the last of us by many years to leave home, living rent free all that time so he benefited more than anyone else in the end. He doesn't say anything now.