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.

OP I would have offered money to my sister in these circumstances but she would have never thrown fit and demanded it off me in the 1st place.

It all comes down to relationship you have with her.

Also legally you just can’t give that money to a sibling it would need to be done properly with legal advice

OP I don’t know if you’ll even read this far, but I think you need to say that you’re sorry there was no inherits left from your father after all his expenses.

But you CANNOT give her your DHs money or MILs inheritance. That’s not yours to give.

In all honesty I’d prioritise my children in this instance. This was a gift from your Dad to his grandchildren. I don’t think it’s reasonable to expect you to give up their house deposits etc. Lots of people are disappointed when inheritance rolls around as the money is swallowed up by care fees. It’s rubbish but it is what it is.

And do you understand that OP and her husband have benefited in many ways because of that £300K they accepted? They and their kids didn’t need that money.

It could certainly be possible. A number of schools offer discounts which can be up to 10%.

I think if your dad hadn’t given you that money he would have lost it too, loaned it or invested it or spent it on care. It’s not really your fault he made those decisions.

In my family it’s always been said education is not counted towards inheritance or anything like that as my parents believe it’s something we should all try to do. I also suspect that your sister probably got a lot of dig outs over the years that weren’t recorded. I personally see grandchildren as separate from children and entirely at the grandparents discretion.

I would see both perspectives- it was your dads choice to do this, if he hadn’t the money would likely be gone anyway but I also understand that your sister is probably feeling a bit upset he didn’t make provisions for her (an extension of her grief and any unresolved issues she had with, also a way to redirect the pain she is feeling that has no remedy to something she sees as fixable). I actually think since she did nothing for his care she shouldn’t have expected half anyway (was she a bit spoilt, molly coddled as a kid?).

If I had the money and wanted to salvage my relationship with my sister what I would likely do is say we will co purchase an apartment with you - we pay £100k which will remain in our names, you get a mortgage for the rest - you can live in this house but we keep an interest in it and when you pass our share will then go to our kids. It helps her get her feet on the ground, keeps some money aside for your kids and means the money is not just being used for holidays or frivolous things.

It isn’t either/or.

Like I said before, OP should give her sister 50k as a goodwill gesture. I can understand not wanting to hand over all her savings but she has profited enormously from an estate which what intended for them both and now the sister has nothing. Her children have already been ‘prioritised’, after a very expensive education they should be able to earn well for themselves shouldn’t they?

And how has OP personally benefited? Her children have benefited from their education and that was her father’s intention.

If he wanted to fund her kids’ education that is his choice. You have to respect it even if you don’t understand it. It was his money to spend how he chose.

I’m sorry you’ve gone through this OP, it must be really hard. But the way I look at it is that your father bypassed his children to give inheritance to his grandchildren. (That’s what one of my grandparents is planning to do and one auntie is mad because she has fewer children!)
You haven’t received a cash lump, so neither should she. Your father has skipped your generation to give to the next.
Maybe offer to help your sister financially if she is struggling and you want to mend the relationship but this could also be a slippery slope.

You say you couldn’t afford it because of having a third child (due to twins) but could have paid for two. If you could afford to pay for two, why did you allow your dad to pay for all three children instead of just the additional child?

You said you view it as a gift to his grandchildren but your dad obviously didn’t view it that way, he viewed it as giving you a share of inheritance early and he changed his will to reflect that. It was clear he wanted your sister to receive an equal share, with the amount he’d paid for school fees being factored in.

You’ve said your sister it struggling and worried about her pension - is that what your dad would want, or would he want her to have a share of the money? Had he known your sister would end up with no inheritance and struggling, would he have made the same decision to pay for all three school fees and leave your sister nothing?

You’ve said you could afford to pay it so it seems selfish and entitled that you’re refusing when it sounds like your sister can’t afford to forego her share of the inheritance.

In my view it would be reasonable to pay her £150k and be grateful that your dad’s generosity means you only had to pay school fees for 1.5 children when all along you’d planned and could afford to pay for 2 (before knowing you were having twins).

Do you want to be fair or equitable or by the letter of the law.

Legally there is nothing owed to your sister by you, the kids. The estate owes her the right to the first 300k. SO if there is anything at all in the estate it just needs to go to her.

nb as an aside did it fall in the 7 years gift - might be an IHT issue with the gift to grandchildren, but I think reading between the lines there isn't

In terms of morally, that depends on a whole load of things and other peoples opinions. I think unless you give your sister 150k she will not accept anything else and whatever you gave she would still feel "hard done to" and never shut up about it. SO you can choose nothing, some or all but even with all I don't think she will ever have the same relationship with you and may even just go off and never speak to you again for what YOU did to her - ie YOU did nothing but she sees it otherwise for whatever reason.

I would make sure your Dads accounts are spotless, lodge them with a solicitor, hand over any executor responsibilities to solicitor and let him deal with it. They are used to it, and if they can persuade her to see sense, I would speak to the solicitor and say you are not against some sort of settlement but obj 300k then is not worth 300k now either so ... like you say bit of a mess. You owe her nothing but she will never see it that way

I asked my Dad the difficult question before he passed away regarding who owed him what as he was always bailing one or other of my siblings out (6 of us). But they usually had some sort of payback system in place so hence I checked what was outstanding. I also had a witness to the convo so when asked I could categorically say what the situation was.

You need to work out how to make yourselves not the bad guys and I think that is where a decent solicitor could help and appease the situation so that you could at least remain in contact with your sister.

You are totally mistaken. If you have any money then you can gift it to anyone at all that you want. Giving money to another person does not require "legal advice" - at least in the UK.

The only consideration would be for the executors of her estate if she were to die within seven years of making the gift and depending on what her will says.

@Mirabai 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.

Oh please. If I'd been the sister getting my hands on £300k 'inheritance' by way of school fees early, I'd have been equitable enough to say I couldn't possibly accept such a huge amount unless it were halved and the other half given to my sister at the same time, not written in some will for 'theoretical distribution' at a later date.

Exactly. And he may have made the same choice in his will even if he hadn’t paid for their education at the time.

OP had kids, sister didn’t, the money went to the grandchildren, that’s what it boils down to.

I think the young adults in this situation deserve to know the story behind this money. I wonder if they do.

OP I understand why your sister is so upset but I don't agree that you owe her anything. As you say, your money is yours and your DH's life savings including inheritance from his mum. Nothing to do with your dad.

And I find it very funny / odd that PPs have said that as the POA you could have kept your sisters share "safe". There's a real lack of understanding about what a POA can actually do!

But OP didn’t get her hands on it. The money went directly from father to grandchildren’s education. That was his choice. It’s not for you to say how his money should have been spent.

OP can’t force her father to manage his money how she thinks he should.

He chose to spend his money on education. It was not about dividing his money between his 2 children at that point at all.

I don't think there's an easy answer to this. I think I'd probably try to reach some kind of compromise i.e. try and give her something but possibly not as much as £150k.

I'd probably try to take account of:

• What seems fair / what your dad would have wanted
• The fact that as you say, your dad insisted on paying and that money is now spent and gone
• How much your family vs. your sister have, in terms of savings and house equity
• How much your family vs. your sister need going forward, e.g. to live on, to pay off mortgages, to put kids through uni and hopefully something towards house deposit.

I'd also try and slightly put to one side the fact that you are not close to your sister and are annoyed at how she has behaved. She doesn't sound particularly nice but as others have said perhaps she has always felt less valued as a family member and it has made her bitter. She's probably also worrying about her retirement.

Once you've made the decision, I'd make her your offer (if anything) and stick with it. She doesn't get more or less due to being an arse about it. After that you need to forget about any money you give her and not fret that she is ungrateful / she makes bad financial choices etc. You'll know in your hearts that you've done what you thought was right. Good luck with your decision

Inheritance is never guaranteed.
What if your DF had remarried and left all the money to his wife. Would your sister be asking her for a share or he left it to the cats home would she want them to give her money?
Basically your DF spent HIS money on what he wanted while alive ( his GCs education). The fact that he died with a very small estate is not the fault of the beneficiary of his earlier choices

I sincerely hope your dc go on to enjoy fantastic jobs and lifestyles after this heartache, if not it will all have been in vain (I know many privately educated people in normally paid jobs).

I personally would have to give my sister something if I were in your position (my dsis also chose not to have dc but my well-off df treats us the same financially), as it would unease me for the rest of my life.

I'm not saying I would hand over 150k but I would try to reach a solution in which my sister felt valued.
Perhaps pay the deposit on a property for her to live in paying the mortgage (which would in you name) as her rent (with enough deposit that it is at a rate lower than her current rent and has security of tenancy) but that is to revert to the DC after her death so rather then 3 DC getting a 50k deposit DC and Dsis each get say 40k. It the DC will also one day get a third each of the property Dsis lives in.
I would speak to a solicitor to see what can be done (if anything) to get the 'loan' back from the cousins.

I would prioritise keeping communications open with Dsis and doing what I reasonably could to make her feel that she wasn't cut off and abandoned.

Be honest - would you be so uneven-handed with your own children and not wonder if it would be likely to breed resentment? At the point you took the money did you give your relationship with your sister any consideration at all? Did you look to the future and wonder if your parent might need the money for care? Nobody is entitled to money or inheritance but honestly isn’t it just normal to want things to be fair. There’s no way that I would take a substantial amount of money from a parent knowing that my siblings would not receive similar treatment.

😂

Yes, that's exactly what the OP would have done. Sent 2 kids to private, and keep one of the twins in state. Of course. 😂