Trying to get my head around parents giving sibling a large sum of money.

[SmashingTurnips]

Will try to be brief but not drip feed. My sister through divorce found herself unable to keep up mortgage payments. Sensibly she looked for another mortgage to see if she could get a better deal but she was still going to be really short. Parents agreed to make up the shortfall of not far off 100k. This is supposedly a loan but sibling has no way of paying it back.

I think it is kind of our parents to help but I can't seem to throw off a feeling of resentment. My sibling totally had the option of downsizing to something affordable that still would have been big enough (she has a DC), close to the school and perfectly nice but didn't want to. I get that a move on top of a divorce would have been horrible but surely that is life?

I'm fairly certain that my parents way of thinking is that my sister is getting her inheritance early or something. I had no idea they had so much money and of course it is theirs to do what they want with it. Just feels a bit weird that a sibling is in a house of easily double the value of mine and DHs because of parental help. I think part of the resentment comes from the fact that money given towards a house is also going towards equity so this money is actually also an investment that my sibling will benefit from. The same sum of money would more than pay off my mortgage thus saving me thousands in interest but I would never accept it. I'm amazed that my sibling has cheerfully accepted this help frankly. There is nothing I can or want to do about it other than try to make peace with it so that I don't have an underlying feeling of resentment towards my family.

Thanks for reading and any advice.

Do mention it to them, I don't see how you can make peace with it until you do. They may just be going by who 'needs' what, in their eyes, and will be genuinely perplexed at your hurt until it's explained.

I'm surprised some posters think it's perfectly reasonable that the sister continues to live in what sounds like a semi-mansion, when a downgrade would be a three bed semi, still in London. Her downgrade would still be beyond reach for so many people!

This is very unfair. Parents need to understand that favouring one child over another like this is very divisive and will breed resentment and bad feeling between their children. I had a similar situation to this in my family in the last few years, and like you OP, I felt very hurt and left out over it. It's the favouritism as much as the money really, although obviously the money would be nice! In my case it all came right because when I moved, my parents evened things up, which I really appreciated, but I'd thought a lot about it in the interim and had privately felt very hurt over it for years. I wish they'd told me what they were planning to do, and then I could have saved myself the upset.

The sensible thing to do is to talk to your parents, I'm afraid, although I appreciate how difficult that is. Just say that DSis mentioned that they've given her £100k towards her house, and that makes you feel very hurt and left out, I suppose, just as you told us. See what they say. If they've got any sense, they'll have made similar provision for you by setting money aside for you to have at a later stage, or changing their Wills. I hope they have.

AIUI, if it's a proper loan, there should be something in writing, so that the debt can be called in by executors if the circumstances arise (had this when DF lent us 25K bridging loan for 6 months, when we moved house).

Otherwise it's a Potentially Exempt Transfer and will be counted back into the estate for Inheritance Tax calculation if death of donor occurs within 7 years.

(I am just a lay person, but have looked into this kind of stuff for family reasons.)

I haven't read the whole thread but just wanted you to know I'd be mightily pissed off if it were me.

Thanks for all the different perspectives. I'm pretty sure that there is nothing in writing and no legal people involved. The money was simply transferred. I guess I do just need to talk to them, not too sure what to say though! There is no way I would question them about wills or anything. I didn't actually think that they had anything like that sort of sum available - they live in a normal fairly modest home, there is no big inheritance coming to anyone. I strongly suspect that we will end up in the situation where care fees as my parents get older will use up the rest of their funds - which is as it should be. They should be comfortable and looked after in their old age.

Which I think is why I need to say something, just to clear the air. I don't think for example if I were to get divorced or lose my job they would have funds to help me to the tune that they have helped my sister.

I think what I want to say is that I'm hurt that they haven't really thought this through and that it is most likely that they have decided to bail out one child knowing full well that they couldn't bail out the other nor make things fairer later on. Feel hurt for my DC too. I think I'm putting off talking about it to them because I suspect that there is no provision made to make things end up fair and that they just simply didn't think. The worst bit is that I feel annoyed with everybody for not thinking for a second that this would end up driving a bit of a wedge between us all - they are depending on me to not mind and not feel hurt. Which is not impossible but they could have talked to me at least.

Which is why I said upthread that I wouldn't accept a big sum of money like that - I mean in the situation where I wanted it rather than needed it. Because I would hate to have my sister feel hurt and left out and I would feel entitled and spoilt.

I'm surprised some posters think it's perfectly reasonable that the sister continues to live in what sounds like a semi-mansion, when a downgrade would be a three bed semi, still in London. Her downgrade would still be beyond reach for so many people!

It's not a semi mansion nor London, but yes, the downgrade would be beyond the reach of many people.

Why did your siblings tell you about this and how do they know about it? I do agree that you should talk to them, even if it is just to get them to talk financially about looking after themselves in the future. (Maybe they will move into your sisters house?

Sorry, I see your one sibling is your sister. Wonder why she told you though and not your mum and dad?

Or you could always say to them "am really worried how sibling is going to manage to buy house?"

Thinking about it, they may well have remortgaged their house, ask them to seek financial advice, good luck x

She told me because she was trying very hard to figure out ways of staying in her home and was upset at being short and I was being supportive of her situation. She actually asked me if I thought she should ask our parents for help. I thought she was talking of a shortfall of a few thousand, had no idea it was such a big sum - I said that I imagined they wouldn't mind being asked to help with a few thousand. It was much later that she told me what the amount turned out to be.

At first I felt cross that my sister is being helped to have a property that will gain in value - that 100k will have grown to be a lot more in 10 or 20 years. I've got over that now but it did sting in the beginning to realise that.

I kind of wish that I just didn't know so that I could feel the same about everybody as I did before.

Are there not tax implications of giving a sum of that amount. I thought you could only gift around £3K per year?? A generous gesture can become a nightmare if its not properly thought through.

£100k!! That's a HUGE amount, esp to stay in an unnecessarily plush house.

And without discussing it with you. I would be hugely hurt and totally pissed.

All this 'it's their money to do with what they choose' is baloney if it comes down to favouritism.

Do talk to them op. I know it's awkward but, really, bite the bullet and find a way.

I do hope they have all along planned things to be divided equally.

My parents have done something similar - I discovered in the summer that they had given my "golden child" brother £200k towards a house. I found this unbelievably hurtful, it's not because of the money, it is because of what it represents, i.e. an expression of love and support. I found it particularly hard to stomach because my parents have made a big point of never giving me or my other siblings a single penny since we left uni.
No advice but huge sympathy. It's a horrible thing to realise that you are less loved than a sibling. xxx

And yes there are tax implications - but only if they die within 7 years of the gift when it will be taken into account for inheritance tax purposes.

My parents bailed out one of my brothers twice (redundancy issue) but adjusted their will accordingly. However since then, as Frostycake said upthread, my DDad died & Mother has soaked up all the remaining money in carers/holidays/extravagance. We are now at the stage when her last asset, her house, is to be sold to maintain her. I am assuming there will be little or nothing left. So I am not jealous, as it was not what my Dad had envisaged, (but in reality brother will have had 100K & my other brother & I nothing !)

SO:
I would try gently to tell your sister, that she must ask your parents to set it square in the will ? & if & when they run out of money, & need to go into retirement home/carer, she will have to pay the first 100K ! even if she has to sell the mansion
It really is important. It may be difficult, but so will carrying that feeling of hurt be.
I empathise, I understand.

I hear you, OP. My best friend had an old car and her parents offered to loan her some money to take advantage of the scrappage scheme a couple of years ago to get a brand new car. She's been paying it back bit by bit regularly.

Yet her parents paid for one round of her brother and sister-in-laws IVF and, after the baby was born, bought them a new car. No loans at all.

My friend is single, rents a small flat. Her brother and sister-in-law own their place (with mortgage) and have two incomes.

I think it stinks and it upsets my friend quite a bit but she never says anything. Her parents are getting on a bit now but have a dog. If they go away, it's my friend who has to go and look after the dog, take it for walks. Her dad was unwell and it was her who had to go and take him to the doctor. Brother seems to do sod all. I get angry on her behalf sometimes. She keeps toying with saying something to them but won't.

I think you need to have this out with your parents. Tell them how you feel whilst stressing its nothing to do with them perhaps needing care in their later years and there not being enough savings et left for a very nice care home to be chosen for them.

There's also the fact that if the house had to be sold to pay for care your sister is going to waltz off with 100k whilst you are left with nothing.

And for what its worth it sounds like your sister just didn't want to have to downsize after lose face or status after her divorce.

We help our children out a lot. Its the way of life where I live. But my husband has a running account in his office and can tell at a glance just how much each one has had so that come the day of divvying it all up - no one goes short. So for instance youngest daughter has just had a new car and been supported financially through her masters, she had her fees and all expenses paid, as well as a small salary for her pocket that she gets for doing a bit of office work for her dad. Her siblings know about it all but no-ones bothered because its all done really fairly and they all know no-ones a favourite.

It is really unfair - you should speak to them and let them know how upset you are that they have helped your sister but never offered you any support.
But be prepared for them to angry you have pointed this out. They are obviously hoping that no-one will say anything.

Thank you to everyone for your comments and perspectives. I think I have decided to say something. Not sure yet if it will be a letter or a conversation.

I don't really know what you would gain from bringing it up. It is unfair but it's done.

Please do let us know how things go. I am in a similar position to you and I am also unsure what to do.

Given your circumstances, I wouldn't be happy either. Your parents should have had assured you that there was some parity to be found in all this.

I think you have every right to feel dodgy about this, and you should probably try and speak to your parents and ask what the situation is all about, from their POV.

We had a bit of a similar situation in our family; some money was left by a relative, we all spoke openly about what we thought it should be used for.

At that point my sister was working and married and I was renting a damp flat with too many children and no hope of a decent job.

We decided as a family that we should invest the money in a house, and that me and my children should live in it and that my parents would own it, not me.

It felt like winning the lottery to be able to stop renting, and frankly I still feel guilty that I get to live here, but my sister was and is absolutely fine about it - she has had enough money for a deposit on a house, too, though likes working and likes the idea of being a bit more of a free agent and travelling about with her other half.

When my parents do pass away we will have their property, and this property between us and at that point will have to decide how to divide it up.

I'm not sure, but I think this makes sense for all concerned (the way house prices have gone we'd have been unable to afford a property if we had waited even another year, in this area) and it means the value of the investment goes up with the house. But it isn't my house as such; it belongs to our family as a whole.

I hope you are able to talk to them. I am sure they will have thought it through and hopefully can explain their decision to you. But at least you will have it out in the open.

Btw the option was also there to split the money equally but it was all talked about for some weeks, and we all agreed on this plan.

That's the thing - I think you should have been consulted, really, or at least kept in the loop or it will engender resentment.