How to give money fairly to children

[PetaMatt]

Following my mother's death I have inherited a large sum and I want to use it to help my children onto the property ladder (I am taking advice about varying the will).

I am due to receive about £800k. Where DS1 lives, a decent one bed flat costs about £250k. Where DS2 lives it would be more like £350k. I know they are both keen to buy a flat.

WWYD-

1. give them each the price of a one bed flat (£250k and £350k)
2. give them each the price of a one bed flat as above plus give DS1 an extra £100k
3. give them each the price of a one bed flat as above and reflect the £100k difference in my will
4. give them each £250k and suggest DS2 gets a mortgage for the difference
5. something else?

I don't need the money myself although I will appreciate the security of having whatever is left.

Please, please, please give them the same amount of money whether it’s £50k, £250k, or £350k!

anything else is a birthing ground for resentment and upset.

Give them an equal amount of money. The one buying a more expensive flat can always get a mortgage.
If one gets more than the other, it will create resentment.

I'd personally split the difference, giving them £300,000 each. A mortgage for £50,000 is going to be a dream for anyone!

Option 4. Give them the same. DS2 could move to a cheaper area if he wanted to.

I’d give them the same (say £150k) but I wouldn’t give either of them the full amount for a flat. I think having some sense of realism and responsibility re mortgage payments is healthy. You would then have the option to make further gifts down the line or possibly to consider gifts for future grand children.

Give each £250K- keep £300K for yourself. £250K is an amazing gift

Kind of reassuring to see I’m not the only one in this situation. Everyone I’ve mentioned it to agrees with me but when my parents asked me for my thoughts before they changed their will, I was accused of being grabby - so I’ve dropped it. I do t want to fight but I do feel resentment. More so because I’ve always been the good kid who never caused any trouble. My sister meanwhile got a criminal conviction while at uni, got pregnant 3 months after meeting someone at 22, stole money from me (not a life changing amount - but £300 I’d saved from my Saturday job when I was a student. I’m probably holding on to a lot more resentment that I care to admit to.

Yes this is what my parents have done. But my mum is in her mid fifties, with her own mother still alive in her nineties. £100k in potentially 40 years (when I’m in my seventies) is not the same. It’s worth less, and won’t give me the opportunities it has given my sister now. Also it might have all gone on care home fees.
Obviously it’s their money to do as they want with etc, but it’s annoying that they presented this to me as “we’ve made it fair and equal!” when they just haven’t. I’d rather they acknowledged the unfairness and said “well life’s unfair” rather than ask me to pretend it’s equal.

I think that's a really good idea.

You could also invest a lump sum as a pension for each of them.

Give them both the same. Where I live £250k would get you a three bedroom house in a nice area. They might be willing to relocate when they realise they could be mortgage free or they could buy somewhere bigger by using your money and getting a mortgage.

Ah but you're capable. You don't need it as much 🙄

I do worry about care actually. I kind of wish DM had kept it all so she can fund her care. I suspect she will expect the recipient sibling to step up but I have no doubt it'll be me and DSis driving back and forward trying to support her while other sibling finds it 'too much'

I'd do 4. They may want a flat because that's all they can realistically work towards. This gives them a huge boost so if you give the cash they may choose to take mortgages andbut houses. By keeping it cash they can both make the choice right for them.
I would ensure that they do protect themselves if they are in partnerships tho.

Give 200.
keep 400 for yourself. Incredible gesture to your kids but the money was left to you.
giving away 350 x 2 only leaves you with 100k and your kids have 350 each!

OP, having been the adult child in this position, although lower sums were involved, split the money equally. If you want to give £500k to your children it would be £250k each. As the adult child, I had to bring this up with my parents and sibling and it was incredibly stressful, emotional and still upsets me when I think about it. They were all very understanding and 100% not upset about me bringing it up so it worked out well. This will make it fair, and £250k towards a £350k flat is already an amazing gift. So sorry for your loss, and what an amazing gift your mum has been able to give to your family.

My parents have given both my brother and I the same, he has a big house and I have a little flat as he chose to live in a cheap place. I could go and live in the suberbs in a house but I don't want to.

My OH was given £200k by his parents about 5 years ago which helped us tremendously. His sister was given £250k because she's a single mum in a low paid job - we're no contact with his sister, for other reasons, but they all stem from the fact that she has always been treated with favouritism because, in part, of the life choices she made.

Money can do brilliant things but it can also tear families apart through resentment and bitterness.

My sister and I were given the same amount. I live in the north west and my sister lives in London. The same amount was the fairest way to do it. Neither of us live in our home town so we both made the choice as to where to live.

I would give them each £250k. It’s fair that way. Your son can get a £100k mortgage for remainder of the value.

I would give them the same - £200k each - they can then each buy a property with a smallish mortgage

I would invest some of the balance with a view to perhaps treating them in the future eg money towards a wedding or holiday , a savings pot for grandchildren but whatever I did would do it equally between the 2 of them

I was in the same position recently with £600k. I chose to split it 3 ways. £200k to each daughter and the same for me. One daughter bought a flat outright. The other is buying a house and getting a mortgage. My share is in the bank and the interest it earns makes retirement comfortable. Always, always share equally!

As others have said - give them both exactly the same amount. So option 2.

I'm confused as to why you're even mentioning/considering that there are difference prices for a one bed flat? Ultimately they are getting the same cash and they can do with it as they wish. Don't forget that the one who chooses (or may choose) to buy the £350k flat will ultimately still have that "equity" as opposed to the "one bed flat" so you're not matching "one bed flat each", you're matching money. They also won't choose to stay there forever so the equity will be used again when moving into a bigger property.

It is entirely their choice as to where they live etc and different lifestyles.

Give them up to 350k each but insist it is spent on property.

Oh and I wouldn't force the one in the cheaper area to go for a 1 bed flat. Why not a 2 bed flat or a house.

Flats can be very poor investments property wise depending on the type of flat and area.

What if the one in the more expensive area received more money from you, bought in the expensive area, then they decide to sell, move to cheaper area and end up better off?

Whatever amount you decide on, give them the exact same. What they do with it is their choice.

I’d give them a lump sum each and then they can get a small mortgage for the rest. With a bigger deposit it opens up other options for them, and personally I would go for a house or 2 bed flat if I had that deposit. I’d look at what you’re also giving yourself. If you haven’t already would it allow you to retire etc. work out what you need for yourself first and then your boys. Any amount of money gifted they would be lucky to have, even if it means they aren’t buying outright

Sorry for your loss.

I seem to be in the minority but would advise caution in giving so much. I agree that the amounts should be equal. But a deposit helps someone onto the housing ladder, buying them a whole flat is in a different league. You know your children: will they spend and save wisely if they have no (or v limited) mortgage to pay? Their own sense of working for their position may also be hampered by such a large gift. Both would be able to buy with £100k, which would leave you with more to support future expenses such as with their kids or setting up a business.

I would also caution that you check your own financial position against future possibilities (such as if you need to pay for full-time care). You might want to see a financial advisor before you speak with your children. You can always give more later.