Blended family - what's fair for DC?

[Justforthispineapple]

DP and I have a blended family with three dependent DC. Two DC have had a parent die and 1 DC is the biological child of both of us. We both parent all the DC together and have parental responsibility for all three DC.

As a result of their parent dying, two DC get a pension until they are 18 which we save for them in their own bank accounts. They don't know about the money yet (as they are primary school age). They will get quite different amounts of money from each other (due to being different ages when their parent died) but the amount will eventually be around £20000-£25000.

Should we save money for the other DC to even things up monetarily? Obviously, there is no "fair". It's not fair that 2 DC lost their parent. I'm just interested in outside opinions to check if one option seems better than the others:

We could leave things as they are, or if we add any money to savings make sure we always split it equally in thirds.

We could save some extra money for biological DC, maybe aiming for about £10000 by the time they are 18. We could do this in their own savings account, or just plan to give it to them as an adult, if they seem unlikely to blow it all on heroin/gambling/Pokemon cards. (I'm a bit nervous about the money 2 DC will have free access to at 18. Obviously it will be very useful if they are sensible with it but you're still maturing at 18.)

We could aim for making things as even as possible so DC all get a similar amount, adding about £25000 extra for 1 DC, and £5000 extra for the DC who was older when their parent died.

We could do something different that we haven't thought of yet.

I'm leaning towards option 2 and saving something significant extra but not trying to match what the others will have. Is that reasonable? Most important to me is not causing resentment between siblings but I appreciate that all these options could appear unfair from someone's perspective.

I’m not sure why you need to do anything to even things up. DC 1 & 2 get the money because they lost a parent.
Outside of that money I would save equally for all 3 kids

It's a very difficult one, in your own wills how is money spilt? Is it completely even, or is it divided in two, and one parents share goes to all 3 of their children and the other parents just goes to their bio dc?

Treating the children fairly doesn't mean you have to treat them the same.

Our finances are fully shared and in our wills money will be split equally between all 3 DC. The 2 DC who lost a parent may get an additional inheritance from GP. As always, none of the inheritances are guaranteed.

That money is meant to support them though - it’s not a requirement for the OP and partner to save it for them. Instead, they are being supported to the same degree by a parent and a step parent that DC3 is by their biological parents. OP, IMO you should be saving so that they all have the same amount of money. Alternatively, use the money as it is intended - to support the kids of a bereaved parent until adulthood - and establish seperate savings funds for all 3 children.

This.

As you said there is nothing fair about this so I wouldn’t focus on trying to even things up. In your position I would save for your other dc so they have something when they are older but I wouldn’t give it to them when they are 18 given your concerns about this. And I would try to forget about making sure the amounts are even. Circumstances have made this outside of your control to a large extent and I genuinely don’t think this is something your kids will quibble about in decades to come. Especially if they feel loved and provided for.

I am usually the outlier on matters such as this as I would look to put it all into one pot & then give all 3 equal shares when they individually turn 18/21/need it.

Yes 2 lost a parent but due to their ages they dont know what money means & from what you've said don't even know it exists. I'm assuming the surviving spouse is getting 50% of the pension so what are they doing with that money ? They are not spending it on themselves are they ? They are pooling it (or most of it I would assume) to spend on the blended family. Same goes for the 2 children.

And no, it's not stealing, its creating a harmonious family & not building resentment years down the line.

I would even it out if you can through additional contributions from yourselves.

Tbh, with DCs wanting university/driving lessons etc you'll never regret saving this cash. I wish I did.

I appreciate all your responses. As a PP said, it's also true that we could be spending the money on the DC now, like we do with the spousal pension, and not saving it at all. It's reassuring to see that people have the range of responses I'd considered, although one clear 'right' answer would be nice too!

@Justforthispineapple just remember that dc 1 and dc 2 lost their dad. dc 3 has the added bonus of having both his mum and his dad in their life. it will always be different. even though 1 and 2 will inherit from paternal grandparent, they most likely will not inherit form your current partners parents. dc 3 will inherit from them. that is when it all levels out!

This is wildly unfair.

Those two children are hugely disadvantaged by having lost a parent at such a young age- emotionally and financially. They’ll never be able to rely on that parent for help with learning to drive, uni costs, a house deposit or a spare room if they ever needed it.

That ~£20,000 is all they’ll ever have from them and you’d recommend splitting it so it’s fairer on another child, unrelated to the dead parent, who is growing up living with both their own parents?

Yes, this.

I wouldn’t save anything extra for the third DC. They have two living parents and haven’t gone through their parents’ marriage ending, the period in between, and adjusting to a stepparent.

Look at it this way OP, if anything were to happen to you, presumably you would want any money that resulted from that tragedy (inheritance, insurance etc) go to your own children. Not any future children your partner went on to have with someone else.

….so what I am saying is, what would the deceased parent have wanted?!

That’s a really good point.

In this case @Justforthispineapple hasn't said which of them is the widow(er). Would the 2 children have been better off living in a one parent family & struggling for years on 1 income. Or has life been better for them being brought up with 2 parents and (presumably) 2 incomes. So......now living with another parent who is helping bringing them up you think it's unfair that money intended to bring them up is kept for them solely. Sounds like what's mine is mine & what's yours is mine also.

I understand your dilemma OP and don't think it's quite as clear cut as some see it.
If the bereaved parent had not married again, that money might have been needed to fund living expenses over the years.
It may be that it's only because of the subsequent marriage and step parent's financial support that it's been possible to save it for them and not have spent it.

I think I would be making savings for the shared child to be similar if not identical to the pension savings of the other 2.

I also wondered if adoption was a possibility? That might make future financial expenditure and planning more straightforward?

You could turn that round and say the OPs child has access to fewer resources as one of their parents is providing some of the support to their partners children that could otherwise be spent on them.

I don't think it is as straightforward as your post makes out.

Would you expect that money to be spent towards their expenses growing up or would you expect the new stepparent to subsidise that so the money could be saved.

I think a straightforward inheritance would be different.

I can see your dilemma and on the core question I’d probably go with the in-between 2nd option, but a side point to consider is if you’re worried about what they might do with it at 18, why are you saving it in their own account?

Like you, I’m wary of what an 18 year old would do with a large lump sum, so we’re saving for the children in our own name. You could officially use this money now for living expenses, and then save a similar sum for them in a different account that you keep control of. That account could be in the name of the bio parent only if that is a concern (although if you’re married the other parent could potentially still get half in a divorce).

Would you expect that money to be spent towards their expenses growing up or would you expect the new stepparent to subsidise that so the money could be saved

I agree that if the new stepparent is paying for their step DC to such an extent that it enables the money to be saved then yes that might change things. But assuming the birth parent of DC 1&2 earns enough and covers their day to day expenses, I think the money should be for DC1&2

I also do think that the step-parent of DC 1&2 has agreed voluntarily to take them on. Whereas the deceased parent never agreed to provide for DC3

Its not straightforward though I agree

It's their money, because they have lost a parent. You should ensure it goes to them and you save equally for all 3 of them. They have a huge disadvantage in life, although it may not seem to you, as someone who has lost a parent and was the beneficiary of something like this I think it's pretty appalling that your minimising their loss trying to even things up. Things will never be even no matter how much you try to make it so financially or otherwise.

It’s not the OP’s money and what you are suggesting is theft. The person who died made their intentions clear about who the money goes to and that can’t be changed. Someone else can top up the others to be the same but cannot deprive the person who gets the most.