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?

You're parents sound like a pair of idiots. You don’t have to give birth to love a child unconditionally. 😳

I’m a step mum and my two fabulous boys are adults now with children of their own. I also have my own teenage child with my DH, their dad. As far as I’m concerned my adult step sons are just as much my sons. Their mum also died when they were young and had a life insurance payout that went to them.

My parents were both dead before I met DH but my mum was like me and she would definitely have loved all my boys equally, because that’s what love is about.

Presumably, your niece and nephew will inherit from their own parents and your parents too?

I'd say let your step daughter have it, it doesn't matter if she's a "step" sounds like you both have that mother / daughter bond regardless.

If I was in your shoes I'd give it to her rather than a nephew or niece.

To all the posters saying "ringfence" the money. You can't do this.

The OP said that the intention was to provide a larger deposit for a family home for her SD and husband.

In this situation the money becomes "intermingled" and becomes a matrimonial asset.

Even if they owned the property as tenants in common with different percentages, in the event of a divorce the court will look at the present and future needs of both parties and that may overrule anything else.

It's your house, you can do what you want with it, but it might not be wise to divest yourself of a major asset during your life. Do you have an alternative source of funding for your pension?

If you decide to go ahead with this I'd talk to a lawyer about ring fencing it in case DD gets divorced in the future. I don't know if a long marriage would erode this protection but it is possible to protect it to some extent.

Ur nephew and niece are not entitled to get anything off you just bc your don't have children. Your parents are mad bc they knew their grandchildren were going to benefit and now instead it will be a non blood relative it goes to.

The niece nephew were only going to benefit in the event of your death, but selling will mean your SD benefits now and you get to see her live comfortably.

You are a lovely person op, and by the sounds of it, your step daughter is an incredible person to you also. It's heart warming to see you care for her as your own. We don't have to be bound by blood to love.

I would suggest after giving SD, keep some back for yourself for the future in case your pension isn't enough, the way things are going, the cost of living will only increase.

As someone whose parents’ house value all went in care home fees, I’d say do this now rather than wait. My parents would be horrified to realise they weren’t able to leave me anything of their hard earned money because they didn’t plan ahead.

We’ve gifted our DC money when they needed it in their 30s rather than them waiting until their 50s or eventually getting nothing.

I’d sell the house and keep 50% in a high interest account or ISA. Then I’d gift the SD 50% of the remainder and split the rest between DN and DN - I expect they could do with a leg up too? I’m sure they’d all be delighted. Live for 7 years and there’s no tax implications- another reason to do it now rather than later. And live a bit in retirement.

We're in your position but reversed - my biological daughter and my husband is her step-dad. He brought her up from the age of four, gave her away at her wedding. Like you, he considers her his daughter and so far we have gifted her a house deposit when she got married, and at his instigation we have just given her another £50k to finance another house move as they're short of space since having their children. (We all live in a cheaper area than your daughter). Like you, we have plenty of assets to go round - and love is infinite. It gives him great joy to see our daughter benefit and make their life a little bit more secure and easier - her and her husband both work hard in good jobs and have both achieved good progression in their careers. They'll get it all anyway if we stay out of a care home - so why not have the pleasure of seeing them benefit now?

How sad that your parents are so judgemental and blinkered - it would definitely affect my relationship with them if I was in your situation. Totally their loss too about not attending your step-daughters wedding - what pathetic message was that intended to convey? They also need to mind their own business - they lost the moral high ground anyway by their actions.

I would definitely do what you are considering in a heartbeat - presumably your niece and nephew will be financially looked after by their own parents. You are lovely, open-minded and have all the right values - your reward?- a beloved and loving daughter. Go for it OP!!!!

Do take into account that if it’s not your main residence and you sell it, you will need to pay capital gains tax . Make sure you include that in your thinking.

It's a lovely thing to do. My entire estate will be left to the children of a close friend living overseas. It makes no difference to me that they're not blood relatives.

Do it.
It sounds like you have a better relationship than many mother/daughters.
A parents death at a young age, particularly your mum, is a massive thing to live with. How fortunate that she’s had you OP, a lovely thing to do. Life is so hard financially for youngsters now.

And…just don’t discuss with your parents. Presumably you’re a functioning adult, so none of their business!

Very good idea

Thank you everyone, I do understand where people are coming from in terms of giving an asset away, however

1. I'm not an overly cautious person, I don't believe it is good for the mind and I can't sit back and watch someone I love struggle while I hoard for fictional future expenses
2. We live in a 600k house, if need be we can sell, buy a 2 bed bungalow and 400k left over
3. I'm not worried about pensions, I've thought long and hard about it. We are both quite lucky as in my opinion DHs NHS Pension and my teaching Pension are pretty good deals. We don't live a dramatic life and have both been paying into private pensions for many years on top.
4. Both our parents are still alive and own property etc, while I'm not willing to plan on the basis of inheriting (wouldn't be surprised if my parent disinherit me and DHs leave everything they have to a charity), the likely hood is we will inherit something in years to come
5. While I understand 150k is no small amount, this is my grandbaby we are talking about!! I'd buy her a palace if I could. I know my SD doesn't want her baby to grow up in a flat, she grew up with a lovely big garden and at the very least she wants that. They both WH 2 days a week so an office is more or less a need and we already plan that I will go down in school holidays they can't cover between them to help with childcare so a spare room would be nice - in London that's big asking for 800/900k. I know they aren't on the breadline or in dire need of help, however I do feel they deserve it. After CGT we are looking at around £260,000 which to me could be the difference of my grandbaby growing up on a nice street with space for a trampoline and not having it! I know it isn't the stuff of sob stories but it matters to us.

I would expect your parents to disinherit you. You should not have told them what you plan to do. It is none of their business.

I'm curious about the relationship with your parents. Do you live nearby? Did you visit each other very often when DSD was young - I'm thinking family celebrations, Christmas, birthdays etc. I can't get my head around why they weren't that interested in a 10 year old who had lost her mum at 7 🙁

I think it's a lovely idea. You are giving it to the person who is essentially your daughter, which is a totally normal thing to do.

I dislike people who place blood 'family' above all else, ignoring who we are genuinely close to. So I'd discount their self-interested bleating; it sounds as if they've been horrible to DSD and your chosen family over the years.

Do though seek professional advice on whether it makes sense for you financially, and how best to bequeath such a large asset/sum of money.

OP, it's your money, you can give it to whoever you want. And your SD as your daughter has more 'right' to the money IMO.

However, she's incredibly privileged and sorry sounds very entitled. Living in London, with a high earning partner. Wanting a big house with a garden. And you want them to live on a 'nice street'. With a trampoline (that's not a necessity..its London...plenty of better things to do and quite frankly annoying to the neighbours). All at the age of 27. That's what 5 years out of university?
I don't want to be the bringer of bad news but unless they're happy to have a very long commute , the sort of house they want will probably cost upwards of a million.

YANBU to do what you want definitely , you don't need anybody's permission but just pointing out how it looks.

Your parents will probably disinherit you and rightly so. As much as you have the right to do what you want so do they, and you have plenty anyway.

I expect your parengs will perhaps leave their money to their GC, especially now tjey see any given to you may end up.with SD family.

Im not sure what relatives here will do as one side is likely to be just a SD, though in our situation they are planning another dc.

Why would you hand a large chunk of CGT to the government when you could leave it all to her with good IHT planning? It’s financially naive and clueless frankly.

You must speak to a financial advisor and IHT planning specialist asap.

in London that's big asking for 800/900k

It doesn’t really exist. She’d need 1-2 million+ for that.

@IsMadl I think is a perfectly normal thing to do, shes effectively your daughter, she has no other mother now and you have no children.

What I would say is you need to seek legal advice or at least have it heavily documented that whatever you provide is for SD. That the cash is adding to SD'd deposit for the house.

As sometimes marriages/partnerships fail and you want to ensure that her partner can't claim that the funds were a gift to both Sd and him for the deposit.

You are adding to her part of the deposit, so should it fail that is taken into account in the split of things

It's none of your parents business and why should your niece and nephew benefit and the girl you have spent important (parent-like) time with for the last 17 years should not benefit?

Did your parents help you buy the house in the first place, ooi?

I'm wondering if they gave you a deposit that explains both why you want to give your stepchild one AND why they are horrified and feel as if you are giving away/spending something you were just holding in trust for blood family use (yourself, but reverting to other blood family if you don't need it).

I think you should do whatever you think is best but ensure that any money you give her is legally protected so it remains hers if they were ever to get divorced.

Is it £100,000 you're allowed to give to someone tax-free in a year? I'd give her an amount up to that for the deposit, and hang on to the rest for the time being as emergency money, eg medical emergency or care when you're older.