Inheritance one

[Lifeisbusyy]

Would love some unbiased opinions.

DH has 3 kids - DSD 17, and then our 2 DDs who are 7 and 5.

DH & I set up a business. After a couple of years, I left as it was too much mixing work and family. He continues to run the business (which he can only do the extent he does as my job is super flexible and so I pick up basically all of the household and children’s stuff).

The capital he has used to keep it going, is capital we raised together.

It looks like things might be taking off, making the business worth a lot more.

Not uber rich level, but very comfortable. For context - what we raised together was about the same, and he’s basically burnt through all of it. When I left I didn’t give up my shares either. Just a salary etc as working elsewhere.

We agreed inheritance wise, our 2 receive my 50% of what we own, whereas his DD and our 2 receive his 50%.

There are a few separate assets so it’s not exact but it’d be of overall assets approx
DSD 17%
DD7 17% + 25%
DD5 17% + 25%
(rounded for ease)

He has slightly more assets than I do at present, and will likely inherit a few hundred K when his parents pass (I won’t inherit a thing), so the ‘17%’ will be worth more as it’s from his share if you see what I mean.

This weekend, he basically implied that it wasn’t fair anymore as if the business does what’s projected, he’s made more money and so essentially the kids should get equal splits. Essentially saying I’ve contributed / earned nothing, which just isn’t true. I was integral to the original raise that even allowed the business to run for this long. DSD also has her own mum and family to inherit from.

WWYD?

I would say it depends on the situation with the SD’s mother.

There is no rationale for SD to double-dip and get two lots of maternal inheritance unless the SD’s mother is deceased. That is what would be unfair imho.

You are married so surely you have 50%, including 50% of what he inherits.

But of course the shareholding might change this? Do you each have one share or is the share distribution unequal? Shares equal ownership of the business.

@ThePowerInYourMind no her mum is alive and well thankfully 😊

All of our assets are 50/50 except the business which is 1/3 mine 2/3 his, but currently worth less than the capital raised (50% by me) if that makes sense. It’s hypothetical really as anything could change and the business could not do the projection in which case he’s just burnt through a hell of a lot of money in the last 18 months!

I earn well, and we are largely financially separate (operationally - I understand legally with marriage we are joined).

He has slightly more assets than I do at present, and will likely inherit a few hundred K when his parents pass (I won’t inherit a thing), so the ‘17%’ will be worth more as it’s from his share if you see what I mean.

No, I’m afraid I don’t see what you mean by this bit. If his three daughters will all be getting 17% of his assets, what difference does it make how much the 17% is worth? It seems to be the principle that’s the issue.

I can see the problem from both points of view. He is worried about being, or seeming to be, unfair to DSD who might assume she would inherit 33% of the business, and you are rightly outraged at your contribution not being considered equal.

What does he suggest would be an equitable split? Would he really be happy for his two younger DDs to feel he was favouring the eldest? How does he counter the point that the eldest will presumably be inheriting from her maternal family, just as you previously agreed the younger two would?

Of course, the business might not prosper as he hopes. Or one/both of you might use up all the money on care homes in your old age.

Edited to add: having just read your update, I think it might reasonably change things if only 1/3 of the business is owned by you.

What might or might not happen regarding inheritance from your step daughter's mother or other family is immaterial regarding your own and her father's choices for her. You have no power over that and who knows what that would eventually entail. You can only make sure that you and your DH do what's right and fair yourselves. Personally I would give a third to all three children then there is no need to sit working out who has done the most or least to see that the business thrives. There is no easier way to ensure your husband's first daughter feels 'less than' than to ensure that your joint daughters get approx 42% each while she gets 17%. You say that this 17% is
, in monetary terms 'worth more' but yours and husband's 2 daughters also get this same17% so this 'worth more bit doesn't close the financial gap.

@Tedwardy because the difference between the 3 daughters might not be as high as it seems based on % alone when his half is worth more.

I think even 1/3 is material.

Not exact numbers but representative

£3mil business that I own in 1/3 (provided projection is met)
£600k house that I own in 1/2

Split equally: 1.2m per child

Split based on parentage:
DHs share worth £2.3m split 3 ways = £766k
My share worth £1.3m split 2 ways = £650k
DSD: £760k
Joint DDs: 1.4m each

I don’t think that’s immaterial. DSD will likely inherit a few 100k from her mum/mums side too.

@shiningstar2 but children with different parents will have different outcomes. Her mum has only ever worked part time for example to give her more time at home with DSD. I sacrificed that to try and build something for the children - which was a really hard decision tbh.

I have to say, I’d be considering all 3 of them the same and splitting all 3 ways.

Ah, I understand now, thanks.

How much is this capital that you put in?

As that is doing a lot of heavy lifting on the ‘my daughters should get more overall’.

How would you feel if your DH gave different %s of his share to your three daughters to make it equal overall?

If I were him I’d be tempted to do so - as otherwise one of his children basically gets half as much as the others.

@MidnightPatrol we jointly raised over £4million. Worked on the business together for 2 years, I left 18 months ago. Re capital put in, he put in £20k me nothing hence the unequal share split.

If DSD inherited £5mil from her mum would he be expected to leave her nothing to even it out for our younger two? Of course he wouldn’t.

I think you are right and he has no right to decide your share of the business is any different to what was agreed. Hope you have contracts.

You raised £4m? Who from? What are the terms of that?

How is the business then valued at £3m? Is there expected growth from here?

I think if DSD was going to inherit millions from her mother, it wouldn’t be crazy for him to
give her just a nominal amount to recognise her, in the spirit of creating some kind of long term equality between his kids. But - currently you have no idea what that looks like, so difficult to include in any calculation.

A mix, small amount from investors the bulk from an initial ‘boom’ - the £3m figure was an example not an exact valuation. It’s a niche and growing industry.

The £4m raised is for growth; with a view that it would start being profitable. (Which is what he’s finally on the cusp of based on projections). £4m raised doesn’t mean profit unfortunately, it means runway.

In any case it’ll be worth £0 if it doesn’t do projections in the next 6-12months.

It's true that children with different parents often have different outcomes both materially and in other ways. You said up thread that dsd could also inherit from her DM but having added that she chose to work part time it doesn't seem likely that dsd will inherit much from her. Adult relationship choices impact kids in more ways than materially. Your dsd may have benefitted by having her mother at home more than you chose to be. She also lost out in not having her dad around all the time and getting to live with both parents. These things have a way of balancing themselves out with advantages and disadvantages on both sides. I, personally, think that the only fair way inheritance wise is equal splits. Your dsd will then know she is equally valued in the family. It is almost impossible to quantify who benefitted most by the working/ not working out of home mothers but yours and your husband's dds have the. Great advantage of two parents together.

@shiningstar2 i understand your point. DSD will inherit from her mums side, as her mums parents own property, so although her mum doesn’t currently have much, she will do.

I’m in this situation and though I initially put in more capital , it is dh who has made this possible and he wanted an even split , and in the end it was fair - even though I was biased towards my own children, it is the right thing to do.

I’ve wrestled with this a lot. Especially since DH and his siblings just inherited equally with his step sibling when his DSM died.
I think where I’m at now is that while my children are dependent, DSD will not be inheriting equally from me. I have no moral or legal obligation to her, but I do have a duty to provide for my dependent children. Once my youngest is safely offloaded into the adult world, it will give me great satisfaction to change my will to include DSD equally.
As things stand, my DSD is 14 and my youngest is 3. If I pop my clogs tomorrow there’s no way it would be reasonable or fair to take from what I can provide my now motherless children to give to a child who is A) not mine B) still had two parents to provide for her and C) is many years closer to adulthood than my own children.
We have spilt everything down the middle for now - his half to his children and my half to my children.
Wills are meant to be revisited as things change and I think people often forget that.

That's so silly.

Getting 1/3 each of his share is absolutely fair to all of his daughters!

Why should OP give 1/3 of her own share to someone else's child who has their own mother?

It doesn't make any sense.

It’s all a bit irrelevant whilst both of you are still alive - on the first death are you expecting the deceased assets to be handed over to the children? Or that on the second death you want the split to be 1/3 or 1/2?
First of all, don’t forget there will likely be IHT to pay, his parents may bypass their children and give directly to the grandchildren, your DSds mother might blow all her money on illicit drugs or care home fees and regardless of what you and DHs wills state now, they can be changed at any time.

I think your husband sounds like a really good Dad to be looking out for all of his children and I do see where he is coming from. I would say is it worth the uproar to go against his wishes? You will both be dead and no one will be poor. Sometimes I think keeping the peace in a family dynamic is much more important than who has the most money in their bank.

@CornflowerDusk The first line of op's thread says she would 'Love some unbiased opinions. The last line asks 'WWYD'.
I have given my unbiased opinion and have answered the question 'WWYD' to the best of my ability. The op has twice replied courteously, understanding the reason for my point of view whilst not necessarily agreeing with it. The point of a question like WWYD is to hear both endorsement of your own opinion and to consider others. This the op is doing. It is possible to disagree with someone's personal perspective, which has been asked for and given in good faith without calling it 'silly'. It will be silly to some and have validity to others. If there was only one way to see this situation the op wouldn't be asking WWYD. Just give your own unbiased opinion on the question the op asked without getting personal about others.

No inheritance is ever guaranteed though.

Have you actually written wills as per the original intent? If so, id leave it until you see if the business actually takes off.
I would absolutely start now though, demonstrating to dh how you are both integral to family success and both have equal value.
Tbh, if he is that bothered he can just leave more of "his" assets to dsd to even things up.

So, I have 4 DCs (3 previous and 1 “ours” and my DH has 3 DCs (2 previous and 1 ours) so 6 between us. They have different parents and we cannot control what they do re inheritance, only what we do. So what me and my DH have agreed is that his assets get divided between his 3 and mine between my 4 so effectively the “ours” DV will inherit from both of us (but all the other kids will hopefully inherit something from their other parents too) That’s what we felt fairest from our pov and kids too

@DaisyDoodler yes I agree that seems fair to me.

It is difficult, and can see why so many people might see it differently.

@helpagirl he is a good dad - which is why he’s also conflicted himself as when asked (hypothetically - hopefully!) if I died and my death in service say payed out £500k - who should get that? He always agrees it should only go to my two. It’s so nuanced isn’t it.