Who's unreasonable? House renting, children - complicated!

[Houseone818]

I own another house to the one myself and DH live in and own together. It was my grandparents house and was left in trust for me. I inherited this before me and H married and it is very much my house and all protected etc etc.

Currently this house is rented out and my plan has always been that eventually when my DC has grown up, I will sell it and give the proceeds (or the majority at least) to them to give them a step up, the house is currently in a trust for DC in case anything happens to me but it still gives me full control / ability to sell etc.. DH knows this.

Me and DH also own a house together that we bought during our relationship and is the family home. Here there is me, DH, our child and my stepchildren, DHs older sons. The children are all too young currently for this to even be an issue right now but a hypothetical conversation stirred up a bit of a tiff between me and H last night.

Basically we were talking generally about young ones these days and how hard it can be and we got onto the conversation of wondering how long kids in general will end up living at home for nowadays (SC currently here about 30% of the week). DH then said well we could always let SC rent the other house when they want to move out and how nice it is to have a house there that means we can offer a home to the children at a lower cost and so on... for context SS's are 15 and 17 and our child is only 5 so it's obviously more likely to be SC living independently quite some time before our child.

Essentially I said well no? That house was already rented and it is there for benefit of DC, not to he used at a cheaper rate for SC, didn't say it quite so bluntly but that was the gist that basically it was DCs house, not a "family" house and that until DC needed it to either live in or sell for the proceeds it would be rented as normal.

This got a bit heated, but there are a few reasons I wouldn't be open to this suggestion and the main one is I think it's a slippery slope. So say we offered it to SC, bearing in mind still this is all entirely hypothetical, but say we did, and they or one of them lives there for many years paying minimal rent, I don't believe that it wouldn't begin to feel like a "shared" house, like we either had to continue to let whoever it were live there and not give it to DC as planned or we'd have to share the proceeds. I just think it opens it up to getting messy and I'd rather keep it simple and separate. It's DCs future, not a family house that can just be used by whoever.

I've suggested in the past that DH start thinking about putting together some sort of savings or whatever for SDC, he could as the money isn't the problem, but he never has.

I get it. But it's another one of those threads that will likely divide people, some saying absolutely for your DC, others saying why treat your DC different when getting into a relationship with someone who already has kids. Your DH doesn't see that as your property with a conversation like that. If it was me and my DH and he had kids already, I'd probably be thinking how can we help all of the kids, not just our shared child. But I know most wont have that view.

I'm with your DH sorry. You're all family. He's not saying rent free but I would want to help all the kids out.

That’s for their own parents to sort out. I wouldn’t get involved, the house is nothing to do with your step children

The fact that it is bricks and mortar is a red herring. If you had sold it years ago and out the cash in the bank leaving it for when you were ready to pass it onto your child would make it much clearer. You wouldn’t be expected to pass on a chunk to his kids then.
It is an asset not a home. His kids have him and their mum to provide for them, it’s not up to you to do this as well. What happens when his kids move in there “just for a couple of years” and then you want to sell it? He’s a cheeky fucker- he’s known this has been coming for a while- it’s his job to provide for his kids.

If the house is in trust for DC then I'm assuming DC gets rental income invested for them. This should not stop. As you say your DH could easily start savings account for his older 2 x DC. So could their Mum. Your responsibility is primarily to your DC. His is to all 3 of his DC. I'd also suggest protecting your share of joint house by having tenants in common with your DC inheriting your share of house but DH having lifetime enjoyment to live there unless he wants to sell.

I’d also be making sure whatever he does for his eldest children he does for the OPs to make sure he provides equally for all his kids, rather than using the fact that the OP is financially savvy to remove that from his plate and effectively have her subsidising the others.

The trust wouldn’t let you rent it out to family at a lower rate anyway if they’re doing their job properly and prioritising your children’s interests. Try not to argue and just blame the terms of the trust.

How did you not talk all this out before marriage?! I see both sides but would be irritated if my own dh was so ‘no, mine’ about something so big!

It's a complex issue but essentially your step children have two parents who should be making provisions for them. If it was his ex who had a property or asset, would he expect her to share that with your child?

God these men are cheeky bastards, finding financially sorted women and then seeing what they can claw back for their own kids. Seems to be a frighteningly common theme on mumsnet

In this case I don't think it is family money. The house was left in trust to OP by her GM before she married. And it's now held in trust for OPs child. So the legal responsibility of the trustees is to ensure teh maximum return on the house. They can't rent it out at a reduced rent.
Also I can understand why OP thinks it could complicate things.

100% this. You sound financially savvy op. The Trust won't allow comments are wise words too.

Forewarned is forearmed.
This could be thin edge of slippery slope.
I would be running worst case senario (divorce) in my head and locking down as much as possible with solicitor to go where I intended it to go to.
Be savy. Don't discuss first just get your ducks in order.

Also I can understand why OP thinks it could complicate things

I definitely think it would. What happens when one of them has lived there years potentially and then they've got to be chucked out to make way for our child who's house it was always supposed to be.

We did. He's known about it since before we married.

YANBU. This house is nothing to do with your SC. It's none of their concern.

There is no way I would do this. That house is your DC's inheritance from your side of the family.

Your DSC have two parents to provide for them. If he hasn't saved for them as he supposedly was going to do it's not up to you to sort that out now. Is their DM going to sort anything out for your DC? Of course not and as she shouldn't.

It may not seem fair but that's the way it is. Of course you want your DC to be the only one to benefit, it was left to you!

You're either one family or two families in the sharing the same space. Clearly you and he had different ideas about what your marriage meant.

I think it’s fair to say SC can’t rent it as it’s currently a good commercial asset. What if one pleads poverty and doesn’t pay the rent? What if they cause damage? What if you want to sell and they don’t want to move out? So keep business and family separate.

As regards how you use that asset longer term, it depends on how you view his children and what you and DH have agreed re wills and inheritance for all three DC. My mum and step dad split all their joint assets equally between all DC and everyone was happy with this. My dad and step mum gifted their actual DC a house and gave all her DC - my half brother, SS and SB - significantly more than his DC - my DB and I. Lots of resentment and two sides of family NC with each other.

In short if you treat your DC differently they could end up effectively an only child after you are dead.

Once I untangled all the DC, SC, SS, SDC - not sure I got the last one - I think I agree with you but it's a tangle because you are married and have a child in common plus his children so you form a family and it's perhaps natural for him to think of it in terms of family assets and potentialities. From another point of view you might say you take on some sort of joint responsibility when you marry, and / or that you pool resources.

These children are 15 and 17 - I think you said they are too young - so it could be imminent that one or both might want to move out of the family home. What happens if they want to go to university or some form of education or training - who pays for that, which might involve accommodation? Does he pay for them generally or do you contribute to their upbringing financially from the proceeds of the rental or otherwise?

It is astute on your part to foresee how it might turn out if it is assumed his children could use the house - in reality a temporary unofficial arrangement could become an 'entitlement' and permanent occupation, difficult if not impossible to change, with consequent strife or destruction of marital and family. It may seem harsh to him though. Perhaps you could soften it in other ways, e.g. set up a joint fund for his children into which you both put something in whatever proportion seems sensible according to affordability and other relevant considerations. He should be saving on his own already for his children but you may have to drag him into it. Might be worth it for harmony and to get him off the idea of the other property.

The rent goes into an account for DC currently although I do have access (but never use it).

Exactly this. Look after your own kids, and he can worry about his.

That is DD's money coming in from the rent and her potential deposit for a house in later life. The SDC have 2 parents who can also put their own money and any inherited monies toward their children.

I only have 3 years between my two children and Ds2 already knows it will be harder for him to get on the property ladder coming in 3 years behind his brother, there is a 10 year gap between the youngest DSC and your DD.

The best way forward would be to consider the DSC living with parents as long as possible whilst working to save up without paying any rent or any bills if both sets of parents are able to support this.

This 👆

If the trust was set up properly, then renting to step children is fine, but it would have to be at market rate, or very close to it.

As another PP said, the rent received should go into the trust for the OPs children (again, assuming it was correctly set up), so step children are just like anyone else who wants to be a tenant there.

Let me get this right. You were gifted a house in trust from your grandparents. Presumably once you reached the age deemed in the trust, ownership fully became yours. The house is rented out now. Have you transferred the property into a trust for your DS? If so, who are the trustees and at what age will your DS become the legal owner (its usually 18)?
Your DH assumed that his DC, who are half siblings to your DS, would be able to live in this house at a reduced rental but you don’t want to do this.
There are lots of things to consider, not least the tax implications of the transfer to your DS. In addition, as he doesn’t live in the house, he may very well have a huge CGT bill when he comes to sell.

This is really tricky. On the one hand, I completely appreciate that it's an asset you have earmarked for your child. He was aware of that prior to marrying you so he has no right to now say it can be divided three ways (which is ultimately what he's suggesting, he's wanting all three of his children to benefit from it)

Thing is, his two children don't have a luxury your child will get and to him that's really unfair, and it kind of is. Yea he should/could have saved for their futures but he didn't and that's f he started now where would that leave family finances? Would you be making up the shortfall him saving could cause?

He has three children and wants the best for them all. To him, you're married and assets are shared and I'd usually agree with that sentiment tbh. Marriage is a financial contract as well as everything else. To you, you have one child and want the best for them.

You either agree that in this instance, it won't be 'fair' - your joint child will inherit a house (where is the rent going currently?) whereas his two children won't be getting that leg up which sucks for them. They might inherit from their mothers side, she might have savings for them, lots of possibilities but the definite is that they will be treated differently by their dad in their eyes as they might not understand why their younger sibling gets a house and they get a pat on the back