School fees and inheritance. I have my hard hat

[barenakedhazy]

I have 3 children, currently all at Uni. My sister is child free by choice.

11 years ago my husband and I sat down and did the maths about school fees for secondary school. We had planned to send our children privately but the youngest two were
twins and while affording 2 would have been possible, 3 wasn't. We were disappointed as we'd planned for this school, but instead started looking into moving house.

When we told my dad this he made us an offer. He'd recently sold his house to downsize to a small flat in an over 50s block and he was cash rich. He offered to pay for the kids to go to school. He felt really strongly about them going and this mattered to him- more than it mattered to us frankly. To ensure their education wouldn't be disrupted he paid the school for 7 years up front for each child. This was just over £100k each.

He then changed his will stipulating that my sister would get the first £300k of any inheritance, with the remainder split between us. (Look - before people start pulling this apart it was a lot more complicated and involved- this is just a simplified summary). He felt confident this wouldn't be a problem as he owned a property he'd paid £250k for and had another £200k left after paying the school fees, as well as a good pension for day to day living.

Over the next 10 years things weren't brilliant. In summary- flat was a terrible investment which cost £50k in 5 years for leasehold repairs and eventually sold for less than he bought it. There were some mistaken investments. He helped out his sister with a loan and she then died and our cousins were dreadful and said without a legal loan agreement they wouldn't repay from her estate. Finally there was a fall that hospitalised him and left him wheelchair bound and needing full time care.

My dad died 7 months ago and after over 5 years in a care home there was almost nothing left for an inheritance.

My sister and I are joint executors and she is furious. She says I got over £300k and she got nothing. She wants £150k off my husband and I to make it "fair".

I understand she's upset and do see how it seems wrong. However we weren't going to go the private school route as we couldn't afford it- this was something that mattered to my Dad and which he did for his grandchildren. I said I see it as a gift to his grandchildren- she says she's being punished for being child free.

I was sympathetic but she's been so bloody horrible that I'm at the stage of just telling her to get lost and never speaking to her again. She's made Dad's death all about money and seems more upset that there's no inheritance than the fact that he's died. She visited rarely and had nothing to do with setting up the care home or managing the fees- I had POA and did all of that. Now she wants his accounts audited and I'm so angry at the implication that I mismanaged things.

Anyway. AIBU to tell her that she's not getting £150k off us? We do have the money as we are both in well paid jobs and she's always struggled to find her niche which I think makes things harder. She lives alone and doesn't have a lot saved for retirement which has been worrying her, so I think some of this is because she was relying on dad's money. However if she'd have bothered to get involved in his care she'd have seen the situation in real time.

Don’t give your sister £150k, if your dad hadn’t spent the money on private school fees what’s to say he wouldn’t have poorly invested in that too and there’d still be no inheritance left? At least he has helped his grandchildren. Their future was important to him, you will hugely regret giving your sister all of your savings and then not being able to help your children and who knows what the future will hold for them.

If you can afford it then maybe it would be reasonable to give your sister a smaller sum that could support her to get a mortgage on a flat or small house, maybe somewhere between £20-50k. If your Dad was that rubbish with money it seems likely if he hadn’t spent the money on private school fees then that would have been more like the inheritance you would have both been set to receive anyway as no doubt the £300k he spent on school fees would have been used up in care fees and poorly invested just like the rest of his money.

Not the point of the thread but if you've got £150k sat about, why do you still have a mortgage? It would be a far cheaper debt over all if you used some of it to pay off your mortgage. I am with others who do feel sorry for your sister though, I don't think you should give her the whole lot, but I'd certainly over some.

She's actually said that when they got to the point of the first one, with the increases in fees they probably wouldn't have. It was a plan pre children based on the situation then, and it changed post children because of the situation then. Plans change.

I would give her what you can afford (and explain it's what you can afford). Particularly because she's not set up well for life. If she can't get a mortgage by herself could you buy a house jointly with her and she can pay the mortgage off?

We are in a slightly similar position to your sister (much smaller sums of money) and a) even though we are "child free" actually a big factor in the decision was my disability making kids almost impossible for us (but no one knows this because why would they- your DS sounds like she's had a hard life and you aren't that close, she might not be as adamantly child free as you think), b) even though I understand intellectually why the grandkids / in laws get more, there's still a small amount of emotion about it not being
"equal" that makes it hard.

@IvyIvyIvy - she’d have done that via salary for jobs she and her dh don’t have now.

i do think the PP is right that if the dad specified at the time he wanted the OP to make sure that if there wasn’t £300k left in his estate he’d expect the OP to pay back the difference to her sister, she would have made different choices. Probably either turning down the school offer, or not giving up the high paying job.

She should be entitled to whatever is left below the £300k so £150k is it then yes she should get it. You have already benefited from your father’s generosity and made your children’s private education the priority, fine. But you profited from being given money that was not at risk from being used for care when your sister wasn’t able to due to timing. So yes, you should give her £150K.

Yes. If the OP has 150,000 in savings SHE only actually has 75,000 really.

I do think a smaller amount to help her sister is a kind thing to do.

I think I agree with this, tough one OP!

Your dad made this decision over a decade ago, with money he had at the time.

Given his investment decisions and care costs, if that 300k hadn't been given to his grandchildren, realistically would it still exist? No.

you don't owe this to your sister, morally or legally - and legally it's a can of worms to gift that much to her anyway - you can only gift up to 3k tax free, and over 100k, that'd be her losing her tax free allowance so she'd be lucky to retain half of it.

your father made this gift to his grandchildren.

you have no obligation to second guess a choice made by your dad 11 years ago, just because circumstances have changed now, just as she has no right to an inheritance.

The father insisted on private education not the OP. For various reasons it’s what HE wanted so in essence he skipped a generation and gave 300 to his grandchildren.

Absolutely.

Many posters are as grabby and unreasonable as the sister and they’d want to get their hands on the 150k too. That’s what’s behind the charade of theoretical altruism.

People in GB have the right to leave their assets however they wish - whatever the implications - so it is not for others to interfere as to what is 'fair', 'moral', 'right' etc. Let sister take OP to court.

Crikey families and money and parental care...always a nightmare. You do have my sympathy and I completely understand why you'd feel aggrieved at effectively being called to account by her all these years later BUT you also say she is in need of the money, scared of retirement funds running out and that you are both well paid and can afford to help so I think you answer your own question -there is no doubt you need to help her financially as you benefitted from your Dad's kindness all those years ago. Her anger and fear haven't helped her and you risk losing your sister over this -is the money really worth that? You only have one family and you might need her friendship and support as a sister in the future.
Obviously I'm simplifying things as I don't know much but my advice, such as it is, is make fresh contact, try to keep things calm, acknowledge her genuine fear for the future and help her. Best of luck whatever you decide xx

You say that your father gave this as a 300k gift to your children and not you. Why then, did he want to gift the first 300k of his inheritance to your sister? He did it because he wanted his wealth to be divided equally between his 2 daughters, and he saw his grandchildren as part of your unit.

Given your dad wanted to give this money to his grandchildren, would he really want you to deprive them of the benefits of your savings now?

just because you think it is THE right thing doesn’t mean it is. And the rehab isn’t irrelevant there is every chance that money could be spent and completely disappeared rather than going on something concrete. And it certainly isn’t the right thing to take the money for an inheritance from one person who feelings were clear to give it to someone she hadn’t met just because a man made bad choices.

there is no reason to think he would have died with that in tact at all and that if it hadn’t gone on the fees it would be left at all. Given at the time he had from what I can work out 500k that disappeared on bad investments and care fees this would also have existed in all likelihood had he not done this the money would have gone - plus the sister knew and oked the plan at the time

for me the right thing would be to honour my MIL wishes for her inheritance, accept that my Dad made the choice he wanted to make with his money and protect my children’s future and recognise that when it comes to how I divide my money it would be equal shared

What a crap situation

You sound pretty judgemental of your sisters life choices which is strongly suggesting you are making excuses to alleviate you from guilt.

The fact is you got 300k from your dad and she didn’t. All the other stuff doesn’t matter. She has a right to be angry about that because it is unfair.

Exactly - the money went to the grandchildren. And it didn’t even go to them directly. That’s his choice and you have to respect it. That was more important to him than leaving his DDs large sums.

HRTFT so apologies if this has been mentioned before.

Surely there's a middle ground - if you gifted her £75k you'd be 'equal'. It would give her some closure (possibly not enough but that's not your problem) and would still leave you with a comfortable level of savings.

It is not as the kids would have been educated in state system if not for the granddad.

You should do what you can to make this fairer. Your children benefited hugely. You and your DH have been able to step back from your careers, perhaps pay down your mortgage quicker? Your sister having nothing isn’t morally right.

This is what posters are not getting: at no point did OP ever receive 300k from her dad. If she had she could give her DS half. OP was never personally given any money therefore she does not owe her sister money.

Her sister is asking for financial compensation from OP of her father’s choices - which is completely unreasonable and somewhat delusional.

I would give her £50k

Your father gave you £100k. So split it

Money feels like it is about worth. It sounds like while he was alive your father did not think your sister had the same worth as you and this is the wound that she is feeling now. My parents try to do this with my sister and I by giving my family two thirds and her one third, eg at Christmas. I always return what I see as her half to her. That’s about my relationship with her, not about my parents’ wishes. I think your Dad has stitched you both up and controlled you both with this ‘gift’. I don’t know if your sister is hurting too much to understand that and come to a compromise.

They told the (cash rich) dad about their financial predicament. I doubt it was unintentional.