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.

Give them the same

they choose where to live

Same amount each or nothing at all.

Give them exactly the same amount now.

Legal advice definitely essential. We gave our DS 30K towards a mortgage deposit about ten years ago. His mortgage provider required fully documented proof of the provenance of the money, and we had to sign legally certified documentation, with full ID confirmations, before we could go ahead. And then we had to survive for seven years to extinguish any tax liability for such a large gift. So beware - regardless of how you choose to apportion your gift, you can't just write a cheque or make a bank transfer with impunity. HMRC will have an interest in what you do.

Give them the same amount. The cheaper area one can upgrade themselves from a one bed to a slightly bigger or better property , the other will have a smaller property but in a more expensive area. Both outcomes are satisfactory.

I think its a case of a gift should have ribbons not strings. I think you should give them whatever you decide, same amount each and no strings on what it should be used for.

Give them the same and it has to be a gift. You don't get to say what they spend it on. Their choice if they spend it on cars and women!

Give them the same amount on the condition that it’s used for property, but not necessarily a one bed flat. If my parent had given me that kind of money I’d have used it to buy a bigger home and got a mortgage for the rest. A proper house is usually a much better investment than a flat.

I would give them £300k each and keep £200k for myself.

I have helped five children by a house so have certainly dealt with this. Everyone has had exactly the same amount of money./ I cannot it being fair otherwise. So in the case here I would give them the same - the higher sum and the one where a flat costs less than that give them the higher sum and require them to buy a 2 bed or house ie property of the same value.

My gifts were only for a property and I transferred the money to the conveyancing solicitor directly (so the children could not of course then spend it on something else but remain free to sell the place and gamble it if they want of course or give it to a spouse no divorce (two are married with children and I know the divorce risk but it was just simpler to make an outright gift and they married someone with similar earnings and capital - wise children).

Give them both exactly the same, it's the only fair way

Give them the same set amount.

Could you give them both £350k ?

I think you need to give them both the same amount. They are choosing which area to live in, and you can't give one more than the other.

You could give one more and reflect it in your will, but what happens if all the money goes and that doesn't happen.

It will cause huge resentment if you give one more than the other.

I feel like this is a non-issue, they both get exactly the same amount. You decide what you are comfortable giving them, and they decide what to do with any additional funds.

Give them the same amount, but think very carefully about how much of the money you may need for yourself - consider the financial implications of future ill health, divorce, care home fees etc. Don't risk a situation where you regret giving away the bulk of the money and silently resent them for not giving some back or for 'frittering it away'. If they are already thinking of buying a flat then they can afford at least part of a mortgage. Being given too much too young is not always helpful and you would still reserve the right to give them more later.

Option 2 sounds fair, and they can choose what to buy with that.

In my family our parents gave us 10% deposits. I was lucky that I only needed about 3k (it was the early 90s and I chose a cheaper area!) and my siblings needed about 10-20k about 5-10 years later.
I have never felt it was unfair as we all achieved the same outcome, a spot on the property ladder.
I suppose the only other thing is that this was a pretty small amount of money compared to yours!

I’d give them both the same amount and the second son could mortgage the left over - it will be cheaper than his rent and still a huge help.

Split the difference give them £300k each.
it’s not their fault one lives in a more expensive area than the other.
its fairer.
sort your will to show equality too (speaking from experience)

@MontyDonsBlueScarf nope disagree.

Giving different amounts of money due to location would cause way more resentment.

Yes some people 'have' to be in a certain location, yet for most it's a choice. Particularly if you are young and have less ties - this tends to be a stage in your life when you're most mobile.

@Pipsquiggle agree. It isn’t a parent’s job to give to their children according to need. The children are adults who make their own life choices and are responsible for their own lives. A gift should always be given freely and independently for simply being your child.

Tell them both you have earmarked £250k each for them when they are ready to buy a home.
The rest will sort itself out.

Definitely the same.

However (I might be going against the grain here) I wouldn't give them the total amount for an average 1 bed flat (so £250k) I would give them less so they both have to get a mortgage for the remaining amount, otherwise you do run the risk that whilst it's fair to give both the same amount, the one who has to get a mortgage to go towards their purchase may resent you for the other not having to.

Personally, I'd be looking at £150,000 towards buying a property, and then you could give them an additional amount further down the line, perhaps when their purchase has gone through to help with furnishing the property etc.

They both then have the same starting point - money towards a flat / house, not a flat bought outright.

I'd give them equal amounts. They have a choice over where to live and work. If someone chooses to live in an expensive area then they will need to bear the extra cost.