Giving house to step-daughter?

[IsMadl]

Hi all, I have one step-daughter, no biological children (could never have any). My step-daughter is 27, she got married last summer, and is expecting her first baby. Her dad and I got together when she was 10 (her mum passed away when she was 7), we married when she was 16 and have been together happily since.

Before her dad and I married I had a 3 bed semi, we live in the North but it recently got valued at £300,000. We have been renting it out since I moved in here 12 years ago. The money has funded mostly my pension and odds and ends here. I'm a primary teacher though so have a good pension as it is.

SD and her husband have been saving really hard for a house, they earn well, she in the civil service and he in finance, but they work in London and obviously it is expensive. She had about £150,000 from her mum (-uni costs, wedding costs etc.) and they are saving.
Currently the house I had is to be split between my niece and nephew when I die, the house I live in now will go to step-daughter when both dad and I pass.

To me my step-daughter is my own, I was never able to have children of my own and I think she is incredible, so smart, beautiful, funny and caring. I hate seeing her struggle to build the deposit for a nice house, in a nice area with a garden which is all she really wants. I've been thinking maybe it is time I sell the house and give her the profit, obviously it would up there deposit massively. I wouldn't do it if I didn't think she and her DH had earned it but they are lovely, kind, hardworking people.

I told my husband and he said that it would be a lovely thing to do but no pressure as it is mine. My mum and dad think it would be a horrendous idea.

AIBU to consider this?

My DH worked in finance and at that age wouldn't have had the lump sum required to contribute half to a wedding. When we got married it cost 10k (cheap) and that was all his money not mine as he took it out his bonus payment that year. Not all couples feel the need to split everything 50 50.

Why not downsize your house to release equity for them? £600k must be quite a house in the North. That way you and your DH are both contributing to her need for a deposit on a nice family home. You would be paying capital gains on the sale of your rental property so it might be valued at £300k but some of that will go to the taxman and you may incur a further tax when you gift the remainder to your SD which is a waste. The £150k does not compensate for losing her mum at such a young age but there's many in the same boat who've not had access to that kind of money to help them along at the start of their adult life and she's still only 27.

I think it’s lovely you want to leave it to DSD. But I think I would hold on to it for a few more years, you never know what the future may bring. You may want a holiday home etc. You could leave it to DSD in your will or put it in trust for any future grandchildren she has.

If she had £150k (minus wedding and uni costs), she should still have enough for a deposit (with other savings her and her husband have).

“To me my step-daughter is my own”
She’s your daughter. And your parents are irrelevant in this consideration - don’t discuss it with them. Is it theirs? Think from the other perspective - if she’s your daughter and to her you are her mother, who is most important in your life? My opinion is that it’s your siblings role to look after their children, not yours.

£10k is not cheap for a wedding; registry office fees are under £500, so everything else is clothes and a party. It may be on the low side of average spend, and it's great to have a bigger party where finances allow, but if neither he nor his family have any money, then you could certainly have cut back.

Would it not be better to gift her the house deeds in her name only, so she could get the passive income from the rent? Which would enable the borrowing for her own house to increase.

And then she can decide later in life to sell?

This would help with her own future pension then and attract less tax over the lifetime of ownership.

I will also give her leverage for life if his forbid she ever needed financial security, rather than all in one pot I.e house deposit.

When it comes to blood relatives you are lucky if you've got good ones. Since my Mum died, I was her sole carer for 15 years, I have been in hospital for 3 months (there were actually 3 different Prime Ministers during my stay and the Queen's death and funeral) and in a care home for the last 18 months and my sister and oldest cousin have had the house emptied including all my belongings and it has been sold. The owner of the local health food shop has done far more for me whilst I have bed bound than my own blood family so don't succumb to any of that old bollocks. You have been a mother to that girl, blood or not.

Its your money to do what you want with, but you do need to future proof yourself. Make sure you don't end up in a situation where you need complex medical assistance and can't afford it. I was the very last person anyone expected to end up where I am. If anything terrible happens you may need to adapt your home, install a lift etc and if you needed 24 hour care it is better to have it in your own home with carers than in a care home. I do not recommend care homes to anyone. Neither care homes nor private carers come cheap.

If you don't need the revenue from the rental of your house you could maybe give that to your step daughter but keep hold of the property. It would then be a constant income stream without losing the house.

If you do decide to alter your will don't tell anyone the contents. Personally I wouldn't even tell your husband unless your are doing it together.

I would split it 3 ways with each receiving the same amount of £300k each. My reasoning is that your sd has already received £150k which was wasted on funding a wedding. Your niece and nephew should benefit from an equally generous sum.

Yes It paid for her education but could have been invested to provide another passive income. If they had bought a small flat/house when she was younger, she wouldn't be in this situation. As she would have had her own property to sell or let to generate her income with.

Equally, if she divorced then her husband would be entitled to half your house profits which you invested in their marital home. Speak to a solicitor about the legal and tax implications of gifting her the sum.

An alternative, would be to let the property but use the rental amount to top up her house deposit regularly. This way you safeguard your property in case you need it in the future because you can't predict life.

We could have if we'd had a registry office wedding and reception at a community hall and invited hardly any guests but we could afford it and I don't see that there was anything wrong with it either. We had a brilliant day and we still managed to buy a house.

I just don't see why people are wanging on about the finances, if OP wants to give her stepdaughter money and is doing that of her own free will why shouldn't she? Her question wasn't "is my stepdaughter an irresponsible spender". When my granddad died he left all his grandchildren 8k each and explicitly told us to spend at least some of it on something "fun".

Lots of us are out there who lost their mothers {through death} far younger than 7 and received nothing.
This woman sounds in a very good position financially without OP's input, but it's up to her.
@IsMadl Wouldn't there be capital gains tax if you gifted that amount?

Why not give her the rental income rather than burning your bridges by selling the house.
The fact that you love your SD and see her purely as your own, is a lovely thing to read, particularly on MN, where SCs are spawns of the devil and to be excluded from everything. However, always make sure you have enough 'exit money' and that you future-proof your own life before doing it for others. I'd apply this to all situations, not just one such as yours.
Yes, it is hard to get on propert ladder; giving them the rent would help without spoiling or putting yourself in a potential financial hole

I don’t think I would give away the house yet, but I also don’t see why niece and nephew necessarily deserve the same inheritance as DSD?

OP says DSD ‘is my own’. Niece and nephew are not her own, and they have two parents, they should look to inherit from their own parents.

OP could give niece and nephew a smaller cash gift, like £10-50k each.

She is your daughter. Yes of course you would give it to get. Your parents are unreasonable

Because obviously they would want the inheritance for their own.
They aren’t ignorant, they are just wanting what is best for their grandchildren.
That doesn’t mean they get it though.

My Stepdad's parents saw us entirely as their grandchildren even though we were not related by blood, and they had many other blood related grandchildren.

I think it would be quite a foolish thing to do. SD and her DH don’t exactly sound like they’re struggling - she’s already had a large lump sum to set herself up in life, albeit in sad circumstances. If they can’t afford to buy a house in London then they’ll just have to buy outside and commute in. There are loads of options available to them.

while this would make you appear generous and prove to your SD that you love her - that doesn’t seem a good reason to deprive yourself of a valuable asset that you will probably need in the future.

Think I'd be more worried about what the future holds for yourself, care costs etc. we are not on a particularly good trajectory at the moment!

I think a £50k gift would be extremely generous if you decide to sell and then you still have some to gift your niece and nephew when you choose to (or not if you need the money yourself).

If she is basically your daughter then treat her like she is, it doesn’t matter what anyone else thinks. I do get where the grandparents are coming from, they are just thinking about their grandkids so don’t take it to heart.

Having said that I would hang on to it for a while longer, you don’t know if you and your DH may need that for care costs etc. You can leave the whole thing to her in your will anyway. She sounds like she’s actually doing very well and tbh it’s normal to have a little struggle in your youth. It’s a lovely idea though.

Op I don't think you should be giving away your security and assets just yet.
Too many things could go wrong, divorce, illness, injury, widowed etc

If having a rental is becoming more hassle than it's worth I'd sell up and invest in lifetime ISA which you can do for pensions.

I do agree you should change your Will. Your DSD is probably closer to you than neice / nephew.

I think other poster has got it right your parents have blabbed about what is in your will. Would they think differently if you had adopted DD or another child?

You sound lovely. Your plan sounds lovely. But....if things come too easy do we really value them? Most people can't buy a house in London at 27. You start with a flat to get on the market and then build your pot.

150k is a lot of money to have spent already. 50k on 3 years at uni? 30k on a wedding? 80k left for a deposit? How much more do they need? What has he bought to the table? What happens if they divorce - has all her money then got to be split?

Someone up thread said give her the house so she can have the income. That's a nice idea but as you know owning 2 properties has some implications. Not least the mortgage company if they still do good deals for first time buyers she won't be eligible. You gifting her the income sounds like a good solution. She can save it for a deposit.

It's definitely a lovely thing to do

But I think you're being a bit naive. A lot could happen to mean you need the money to take care of yourself. Does it have to be right now?

“To me my step-daughter is my own”

When it comes to her this is all that matters. To you she’s your child. You wouldn’t be leaving your house to your niece and nephew if she was biologically yours (except iIn difficult circumstances) so don’t be pressurised by your parents just because they don’t get it.

If you’re sure of your retirement funds and future then treat your daughter however you want to.

DS1 is technically my DSS and I’ll be damned if anyone ever got to tell me I shouldn’t treat him like my own (very similar circumstances).

I agree they want it for their grandchildren but they are ignorant in the fact they clearly don’t understand the dynamics of OP’s relationship with her stepdaughter.

I would sell and split the funds 3 ways - give her a third for deposit and put rest in some sort of trust for neice and nephew

Why not sell the house and split it three ways between dsd, niece and nephew now. ?

Or give it to your dad and leave a portion of your hour house to niece and nephew.

I'd be dubious about telling your parents anymore as they could tell your sister and cause a feud.