To think about evening things out between the kids

[MyKindHiker]

I have a bit of a dilemma. I have two sons, 7 and 9. The elder one last year was in a nasty accident (not his fault) and has received a substantial insurance payout as a result. He's all recovered now thank heavens. By law this goes into a trust fund until he's 18, by which point it will be a pretty big chunk of money.

I was thinking about what this means for my younger son, and whether I should try to make provisions for him to match a similar amount for when he's 18, as it feels unfair one child having a head start over the other in terms of being able to put down a deposit on a house, or pay for university without taking out loans etc.

I do put money into trust funds for both of them already, but if I wanted to 'top up' the younger son, I'd have to funnel all money into younger one's fund. If I got to the point where it was equalised I'd of course then continue to put anything extra equally for both.

I'm not sure what is the right approach. Should I try and make sure their start in adult life is 'fair' or evened out, or would by elder son feel it was unfair his brother getting a handout from mum where he didn't, even if the amounts were the same. Genuinely on the fence about it.

Would I be unreasonable to make extra provisions for the youngest?

I'm sure it was because you pursued the payout that he now has it. You advocated for your child to have the best result so I see no harm in advocating for your second child to have his best result.
My parents always made us share everything and it has led to me and my siblings being generous people as adults who don't compare. When we got birthday or communion money we went out as a family and spent it equally amongst us. It was great as it meant we got stuff way more often and learned to enjoy being the one who was treating everyone.
If you raise your kids with these values, your son won't bat an eyelid at you trying to make things fair for his sibling.

Calm down! I'm not thinking about taking anything from eldest. I'm thinking about whether the other child should go into adulthood with an equal pot and once pots were equalised would then give equally to them, equal in will etc etc.

Does your eldest know about this money and how much ?

does your youngest ?

we put money into an isa for eldest child but had no money to do same for number 2

we haven’t told either and may share the pot at 18 or may give all to eldest as she has SEN and will have reduced earning capacity and may need it much more

id make it even myself

I’m perfectly calm, thank you. And I’m not suggesting you’re planning on taking anything from your eldest. But you are talking about giving him less because he got the compensation. And I think it’s pretty rotten to tell a child that he can no longer have the money you would have saved for him because an insurance company covered that for you.

We very very much want to embrace these values. As an adult I have an amazing relationship with my siblings and there is zero jealousy between us. BUT. My parents always gave to us based on need. So for example sister wanted some extra qualifications to get on the job ladder, parents paid it. I didn't need as went down a different path, they didn't give me an equal amount of money or anything but I know if I'd needed a hand at one point or another they'd have helped.

My husband and his sister always had 50/50 so when his parents helped him out with some money at one point when he was unemployed, they gave his sister the same amount just as a gesture even though she wasn't unemployed. They have a very bad relationship with a lot of jealousy though I have no idea if the money attitude is part of it or just a red herring.

No. For all you know the one who wasn't injured might get a.higher paying job and end up with more money anyway. Treating them.equally doesn't mean they have the same money, it means having their needs met. He got money for an accident. If the sibling got money because the other had an accident, thay isn't equal anyway.

I think the amount of money makes a bit of a difference here - how unequal would it be?

If you’re talking a few thousand that would reasonably pay for physio or something that crops up in the future it’s a bit different to one having enough money to buy a house cash and the other not having a deposit. If it was a massive amount of money, I think I’d try and save up extra for the other child.

I don't think giving differently is the same as taking something away. But I'm not trying to defend one perspective or another - I've started this thread because I'm genuinely interested to hear others' views when I decide what to do.

I can see both sides of the argument and I'm not sure which one I'm on, but I agree with PPs who suggest deciding later. My DCs have JISAs because their grandparents like to give them money sometimes, but I don't save into them myself because I prefer other tax-efficient savings that I don't have to hand over control of to 18-year-olds. I've been a bit influenced by my own parents here: my DPs didn't save for us or really have a plan, I think, but they did support our transition into adulthood. E.g. when the first of us wanted to buy a house, they made what seemed like a sensible contribution to the deposit - then later equalised that for other siblings as needed. When the other siblings bought much later and needed bigger deposits, they evened up the first one. It's always felt fair and transparent to all of the siblings. They didn't discuss it with us as children, though, and we didn't grow up with any expectations of who would get what.

Why do you have to decide now? Can’t you put the money away anyway and decide down the line?

That's a whole other conundrum. Eldest has no idea about the money. It will be in an account in his name so it belongs to him, we can't access it to 'give' to him or not. But when I was 18 I 100% would have blown the lot, so there's a whole load of thought which would go into how and when to tell him and how much control to exert on how he would spend it which I guess we'll manage at the time.

yeah a few others have suggested that and I think that's the best suggestion

I’d stop putting money in their trust funds and save it in a separate savings account in your own name.

Then you can decide when they’re adults.

This happened to my sister. She got in a very minor car bump (car only got scratched) and her and my mum got a payout of around 2k each as they were determined to have whiplash.

i wasn’t in the car as I refused to go to school back then due to bullying

I didn’t get any of the money and nor should I have. My mum didn’t give me an equal amount. I was very jealous but nothing I could do. I was 16 though, at your son’s ages they maybe don’t realise the significance of the money.

Don’t top up your son’s trust fund. For all you know your other son could come into money later or have a better job. That’s life.

I wouldn’t even it up in this case. Your elder DC has suffered, and may well do in the future. I would see this money as a separate thing. He might need to draw on it for therapy.

In a different scenario I would- and indeed have - considered evening it up. A relative took out a savings account for my DS1 but not for my DS2. I’m not sure why not, but I have an 8 year gap between mine and she might well have forgotten. When DS1 was 18 she gave him the money.

On the other hand, DS1 was too old to have a child trust fund; DS2 got one. We transferred it into an ISA a few years ago. By my calculations it will be worth slightly more than the money my DS1 received from my relative. Allowing for inflation, they’re equivalent sums now. If DS2 had not had the CTF I would have given him the inflation adjusted equivalent of what DS1 got from my relative. It’s a few hundred pounds not thousands.

I would try to even it up if eg grandparents willed them different amounts as there is no reason why they should do that. Fortunately we’ve been told that all the DGC will receive the same percentage share of the estate.

That’s so sad. I would told relative to stick her money if they planned to be so unfair.

Your eldest received compensation as he suffered a terrible accident. Thank goodness he appears to have pulled through and be fine at the moment. Compensation isn’t given lightly and you should consider if you try and even things out in the future you might actually disadvantage your eldest. While he is ok now if for example his accident was the result of being hit by a car. What might happen when he gets to 17 ? He might suffer PTSD and severe anxiety and be unable to drive. Result is he needs to spend more on transport taxis etc. for the rest of his life unlike his younger sibling who passes his test. His compensation would have helped subsidise this and possibly pay for therapy. Inadvertently by levelling up you disadvantage your eldest which would result in you and DH feeling guilty. You can’t predict the future and if PTSD / anxiety / depression do manifest as your eldest gets older this might adversely impact his ability to gain qualifications / get a well paid job and therefore he struggles financially and if you have levelled up he has been disadvantaged. I can see your dilemma but you can’t predict the future and personally I would discount the compensation and continue your existing plans for equal savings for both DC. If in the future everything works out fine and both are doing well you can then consider whether you chose to help youngest with something.

Provided you are not anticipating any more health problems in the future for your eldest, then I think it's fine to even things up for the younger one.

Can I just say I think it's great that you are trying so hard to be fair, and thinking about it so scrupulously. Many parents don't.

Even it up - no question. The source of the money is irrelevant - the fairness is what matters.

This it what I was thinking too. The boys could be involved in the decision at that stage.

...but if great Aunt Mabel left £10k to one dc and £0 to the other as a child then YES I would 'even it out'. Hopefully through the executor but if not then I'd save the equivalent for the other dc

Sorry for the derail but your preferred option (if great Aunt Mabel left an inheritance to one child but not the other) would be illegal. No executor can simply decide to change the will like that. While beneficiaries can opt to make a variation to a will the beneficiaries have to agree and give consent. A child beneficiary legally cannot give that consent. To split a child's inheritance with others become an act of theft. But adult beneficiaries could agree to split their own bequests to people who have been left out. They cannot split an inheritance given to other beneficiaries be they children or adults who don't agree.

Similarly the compensation awarded here belongs to the injured party. While the OP here has no intention of 'splitting' it another poster suggested this might be an option. An adult who has been awarded compensation may decide to share it if they wish. As a child is too young to give consent then no-one has the right to take any of their compensation for another person. If they decide on reaching adulthood to share the money then that is up to them.

I think there's an inbetween available here. You could split what you were going to put away for each boy into 2/3 and 1/3 instead of half and half. This way you're still saving for both but you are giving a bit extra to your youngest so he doesn't end up feeling too hard done by without sending the message to your other son that he's essentially being punished for receiving compensation. Without knowin the figures involved it's hard to say how far this would even things out but I think it's reasonably fair.

I'd even it up for sure.

Myself and my siblings all have different potentials and needs. My parents have looked after us accordingly when it comes to financial things. They run "what is fair" by us and we all always agree. My sister and I have done well for ourselves and we recognise that so we are very happy for my parents to help my brother out more.
My father came from a family of 7. All of them bar one went to college and pursued careers. The one who didn't, was left everything from his parents because he was the one who needed it. Not one of the siblings had an issue with that. They all felt it was fair because that was how they were raised to feel.
I've been raised similarly and am glad about that. Money can tear families apart, sadly, but it shouldn't.

I had a similar situation. I discussed it with both kids and ultimately we agreed to keep things even.
Maybe your kids might agree a 50:50 split or 60:40 but best to agree it with them imo.