Unequal inheritance and sibling relationships

[Anonymous]

[url]

Anonymous wrote:Not sure whether to post here or in Money forum, but I think here makes more sense.

DH and I are mid-40s and each stand to inherit 7 figures absent something extremely unusual. We still need to work and think about our finances, but overall we are extremely well-off. Unless something extreme happens, we aren't planning our retirements or college funding around the inheritances.

Each of us has an older sister (I also have a younger brother) who is not as well-off as we are. For various reasons each of our parents are considering transferring some assets now, with more going to our sisters. Since for now it's my parents' and ILs', and I don't need it anyway, I am okay with this. DH actually raised giving extra funds to his sister himself. Is there something I'm missing, however, that could create an issue in the future?

I am lucky to not have gone through managing an estate, but I understand that it can raise uncomfortable feelings and questions. Is there something we should suggest now (maybe in how things are structured) to avoid anything difficult in the future? I don't know what that would be...maybe if DH or I end up with a significant illness or disability?

[Anonymous]

Nothing will come between siblings like unequal inheritance. It's not worth it. I have seen many families permanently estranged due to greed or unequal division of inheritance.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Thanks 21:20 for the quick reply.

I realize my title is unclear, because the funds would be dispersed now...but they would otherwise be in our inheritance. In MIL's case, there is some financial/tax reason that DH is trying to understand. For my parents it's because my dad had an investment (that was money he was saving for all of us) unexpectedly pay out a large amount, and my sister is facing an extreme hardship (she is SAHM and BIL has terminal illness), so he wants her to give her some extra security now.

Given that these funds are being dispersed now (i.e. won't be accounted for in the will), is there somewhere to document what is being done and why? Both sides (MIL and my parents) are clear that this is money that would otherwise have been willed to their kids equally.

There is some history here, in that my dad has always tried to give us money equally through our lives...so even for him this is an unusual move. And I can tell my sister is also worried about what it could mean in the future, even while this money would allow her to just enjoy the time she has left with BIL and take care of him as he needs it with less stress. Since my dad brought it up, her stress levels have decreased substantially.

But I am trying to also look ahead, and since it's coinciding with MIL's decision, it seems like a good time to think through the long-term consequences objectively.

Are you saying that disbursing funds to siblings now would result in a smaller inheritance for you in the future because the estate would be smaller? If so, your premise is again incorrect. Anything dispersed now isn't coming from "your" inheritance -- it's your parents' money and only theirs until the day they die and they can spend it as they see fit.

We have four kids, now all adults. They all had different needs in different amounts at different times. We treated them fairly but not equally in terms of money spent on each one. Private school for this one, larger wedding for that one, bigger down payment for this one, etc. And we haven't kept score and there hasn't been animosity because our kids don't equate any of this with our "playing favorites." They're reasonable people. Sure, when we croak whatever is left will be split equally but until then it's our money and nobody's business what we do with it.

NP- that's exactly the meat of the issue.
We're also in the situation where one sibling needs much more help now. I'd like to think that when the estate is split, someone is counting the beans and remove that from their share before the split. But of course that sounds insane to say out loud, and at the end of the day it is their money to do what they wish. But since this discussion is about what is inherently fair, of course it's fair to track that and account for it. Some families go by many other factors besides pure fairness.

I mean, it sounds insane to say out loud because you're saying "I sure hope someone is counting the beans to make sure it all evens out, because it's totally unfair if Larla got treated any differently when her husband died tragically young, it's not MY fault mine stayed healthy and worked another 25 years."

[Anonymous]

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You aren’t giving us enough details. You guys all share the same mother, but not the same father. Did the father make the vast majority of the money? Did the father bring lots of family money into the family? I’m talking about your stepfather, not your biological father. If he had family money, he might be literally unable to leave money to his stepchildren. I specifically had my dad‘s attorney. Write the trust agreement so that I could leave it to stepchildren, but that’s not necessarily common.

[Anonymous]

I have not read all of the comments, but I think what you’re talking about wanting in the estate paperwork is an equalization provision. There is a way to write it so that lifetime gifts are accounted for and deducted from inheritance. This can make an estate settlement a little bit more complicated and fraught, however, unless there is very good accounting. What you need is a good estate attorney to write an equalization provision into their estate paperwork.

This is assuming that your parents want the distribution of their state to be equal. If they want to give your other sibling, some money in their lifetime and not you, and then have things divided equally their deaths, that’s totally up to them.

I am a lawyer, but not an estate attorney, but I’m the one in our family who manages the extended families estate paperwork. I’ve been trustee, executor, etc. We decided against equalization provision due to the complications involved, but we didn’t really have much unequal gifting in our family.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You were so young when you began livng in the household with mom and stepdad. How old was your sibling? Spepfather deceased?
10m to half siblings and what amount to your mom? She had 4 kids , 2 from each DH, so what happens upon her demise?

As a child etc were you and sibling under a Cinderella Effect? Gifts, tuition?

Both mother and stepfather are still living. If he dies first, mother lives off of trust income until her death and then the money goes to the kids.

Up to 18, stepfather and father split private school tuition and father paid for trips to visit him and I believe provided some child support, covering medical expenses, etc and I am not sure what else. Once 18, father paid for tuition and gave spending money. Stepfather gave smaller amount of spending money through undergrad and grad school. After grad school, no financial support from any parents (I didn't expect or ask for any). My father did pay for family vacations and things like that and gave money for holidays--very normal, IMO, for adult children. Half siblings have received financial support in adulthood from stepfather for more daily/regular expenses (rent, car stuff, etc).

My mom left my dad for my stepdad, i.e., he basically took another man's family away. My father was extremely involved in our lives in every sense, despite living a flight away. Things seemed normal until 18 in the home with mom and stepdad. Stepdad was always a loving and involved parent. Starting at 18, financial disparity grew and was transferred to the grandkids. Much less involvement and very little in the way of financial gifts/support (token gifts for holidays only) for the children of the stepkids.

They recently discussed the estate plan with all 5 children (the 3 of us stepchildren and my two half siblings). They seemed to think it was all normal and fair because our father left us money when he died (we won't get most of it until my stepmom dies). Mom and stepdad act like it's all one big happy family. They seriously have not acknowledged that this might be a slight. Also, they asked me to be executor before disclosing the terms and I agreed. So, I have a job to do -- manage their estate and make sure the real kids get all the money. I am letting the situation die down for now, but will likely hand off this responsibility soon by telling them it makes more sense for one of the others to do it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You aren’t giving us enough details. You guys all share the same mother, but not the same father. Did the father make the vast majority of the money? Did the father bring lots of family money into the family? I’m talking about your stepfather, not your biological father. If he had family money, he might be literally unable to leave money to his stepchildren. I specifically had my dad‘s attorney. Write the trust agreement so that I could leave it to stepchildren, but that’s not necessarily common.

He made all of his money. His parents died when he was young. No family money.

[Anonymous]

Same PP as above. Forgot to mention that my father split his estate 4 ways equally among my 2 siblings and I and our STEPSISTER (the daughter of my stepmother--no blood relation).

[Anonymous]

It's their money. They can do whatever they want with it. Goodness. All y'all spending your parent's money for them. Heavens.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You were so young when you began livng in the household with mom and stepdad. How old was your sibling? Spepfather deceased?
10m to half siblings and what amount to your mom? She had 4 kids , 2 from each DH, so what happens upon her demise?

As a child etc were you and sibling under a Cinderella Effect? Gifts, tuition?

Both mother and stepfather are still living. If he dies first, mother lives off of trust income until her death and then the money goes to the kids.

Up to 18, stepfather and father split private school tuition and father paid for trips to visit him and I believe provided some child support, covering medical expenses, etc and I am not sure what else. Once 18, father paid for tuition and gave spending money. Stepfather gave smaller amount of spending money through undergrad and grad school. After grad school, no financial support from any parents (I didn't expect or ask for any). My father did pay for family vacations and things like that and gave money for holidays--very normal, IMO, for adult children. Half siblings have received financial support in adulthood from stepfather for more daily/regular expenses (rent, car stuff, etc).

My mom left my dad for my stepdad, i.e., he basically took another man's family away. My father was extremely involved in our lives in every sense, despite living a flight away. Things seemed normal until 18 in the home with mom and stepdad. Stepdad was always a loving and involved parent. Starting at 18, financial disparity grew and was transferred to the grandkids. Much less involvement and very little in the way of financial gifts/support (token gifts for holidays only) for the children of the stepkids.

They recently discussed the estate plan with all 5 children (the 3 of us stepchildren and my two half siblings). They seemed to think it was all normal and fair because our father left us money when he died (we won't get most of it until my stepmom dies). Mom and stepdad act like it's all one big happy family. They seriously have not acknowledged that this might be a slight. Also, they asked me to be executor before disclosing the terms and I agreed. So, I have a job to do -- manage their estate and make sure the real kids get all the money. I am letting the situation die down for now, but will likely hand off this responsibility soon by telling them it makes more sense for one of the others to do it.

It sounds like your stepfather was very generous to you throughout your childhood and early adulthood. In addition, you’re inheriting money from your father. Your siblings aren’t going to get that money from your father. This arrangement seems fair to me. You seem pretty entitled. I do agree that if you don’t want to be the executor, you should tell them to name someone else

[Anonymous]

Anonymous wrote:Same PP as above. Forgot to mention that my father split his estate 4 ways equally among my 2 siblings and I and our STEPSISTER (the daughter of my stepmother--no blood relation).

But that was up to him. Do you have an issue with that? Because it sounds like that’s what you want your stepfather to do so why do you have an issue with your father doing that?

Are you planning on giving your half siblings the money you inherit from your father? I’m guessing no. So to me, it makes sense that your stepfather and mother are equalizing things. Your half siblings aren’t going to receive an inheritance from another father or mother. You seem to want to inherit equally as your half siblings do while also keeping the inheritance you get from your father that you’re half siblings don’t get. And then you also seem to have an issue with your step sibling on your father side sharing in the estate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You aren’t giving us enough details. You guys all share the same mother, but not the same father. Did the father make the vast majority of the money? Did the father bring lots of family money into the family? I’m talking about your stepfather, not your biological father. If he had family money, he might be literally unable to leave money to his stepchildren. I specifically had my dad‘s attorney. Write the trust agreement so that I could leave it to stepchildren, but that’s not necessarily common.

This!
DH and I set up a trust so that only OUR children can inherit in the case that one of us dies or we divorce. So if one remarries and has additional kids a new trust needs to be created with the new parent for those children. The amounts in the trusts might be vastly different depending on the wealth of the new spouse.

OP, I can see how this might be hurtful that your stepfather (and/or his family) set this up for his biological kids, but this is quite common. In our case, we did it to protect our children so that a second spouse cannot access the money easily.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You were so young when you began livng in the household with mom and stepdad. How old was your sibling? Spepfather deceased?
10m to half siblings and what amount to your mom? She had 4 kids , 2 from each DH, so what happens upon her demise?

As a child etc were you and sibling under a Cinderella Effect? Gifts, tuition?

Both mother and stepfather are still living. If he dies first, mother lives off of trust income until her death and then the money goes to the kids.

Up to 18, stepfather and father split private school tuition and father paid for trips to visit him and I believe provided some child support, covering medical expenses, etc and I am not sure what else. Once 18, father paid for tuition and gave spending money. Stepfather gave smaller amount of spending money through undergrad and grad school. After grad school, no financial support from any parents (I didn't expect or ask for any). My father did pay for family vacations and things like that and gave money for holidays--very normal, IMO, for adult children. Half siblings have received financial support in adulthood from stepfather for more daily/regular expenses (rent, car stuff, etc).

My mom left my dad for my stepdad, i.e., he basically took another man's family away. My father was extremely involved in our lives in every sense, despite living a flight away. Things seemed normal until 18 in the home with mom and stepdad. Stepdad was always a loving and involved parent. Starting at 18, financial disparity grew and was transferred to the grandkids. Much less involvement and very little in the way of financial gifts/support (token gifts for holidays only) for the children of the stepkids.

They recently discussed the estate plan with all 5 children (the 3 of us stepchildren and my two half siblings). They seemed to think it was all normal and fair because our father left us money when he died (we won't get most of it until my stepmom dies). Mom and stepdad act like it's all one big happy family. They seriously have not acknowledged that this might be a slight. Also, they asked me to be executor before disclosing the terms and I agreed. So, I have a job to do -- manage their estate and make sure the real kids get all the money. I am letting the situation die down for now, but will likely hand off this responsibility soon by telling them it makes more sense for one of the others to do it.

It sounds like your stepfather was very generous to you throughout your childhood and early adulthood. In addition, you’re inheriting money from your father. Your siblings aren’t going to get that money from your father. This arrangement seems fair to me. You seem pretty entitled. I do agree that if you don’t want to be the executor, you should tell them to name someone else

Fair enough. Just really puts everything in black and white to have the person you thought of as your second father leave you 1% of his estate. It's more about defining the relationship after 45 years in those stark terms than anything. I think if it were that the 3 stepchildren each got 10% and the others 35% each or something like that, it would feel fair and not like a rejection. It's not like we will be getting millions from our dad and are just looking for extra funds so we can get gold toilets. It's the principle, but yes, I see your perspective. They also asked me to be the health decisions power of attorney person, so they have decided I am the most reliable "child," but that 1% is what they want to go with.

[Anonymous]

Anonymous wrote:Not sure whether to post here or in Money forum, but I think here makes more sense.

DH and I are mid-40s and each stand to inherit 7 figures absent something extremely unusual. We still need to work and think about our finances, but overall we are extremely well-off. Unless something extreme happens, we aren't planning our retirements or college funding around the inheritances.

Each of us has an older sister (I also have a younger brother) who is not as well-off as we are. For various reasons each of our parents are considering transferring some assets now, with more going to our sisters. Since for now it's my parents' and ILs', and I don't need it anyway, I am okay with this. DH actually raised giving extra funds to his sister himself. Is there something I'm missing, however, that could create an issue in the future?

I am lucky to not have gone through managing an estate, but I understand that it can raise uncomfortable feelings and questions. Is there something we should suggest now (maybe in how things are structured) to avoid anything difficult in the future? I don't know what that would be...maybe if DH or I end up with a significant illness or disability?

My parents are insistent on giving equal gifts, but we have one sibling who isn't as well off as the rest. We suggested that sibling become my parents' animals' caretaker once they are no longer able to do it, and get an extra allowance to cover the costs. The extra allowance is pretty significant (as are the animals). You can get creative like this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My siblings and I were recently informed that we will each get $100K and our two half siblings (same mom) will split the rest of the estate (about $10M). My mother and stepfather married when I was five and had two children together. We all lived in the same house together (not in the same state ans my father but we visited him regularly). Our father passed away suddenly and tragically a couple of years ago and we will receive an inheritance from him, but nothing mindblowing.

No sibling issues because no one was consulted but WTAF?

You aren’t giving us enough details. You guys all share the same mother, but not the same father. Did the father make the vast majority of the money? Did the father bring lots of family money into the family? I’m talking about your stepfather, not your biological father. If he had family money, he might be literally unable to leave money to his stepchildren. I specifically had my dad‘s attorney. Write the trust agreement so that I could leave it to stepchildren, but that’s not necessarily common.

This!
DH and I set up a trust so that only OUR children can inherit in the case that one of us dies or we divorce. So if one remarries and has additional kids a new trust needs to be created with the new parent for those children. The amounts in the trusts might be vastly different depending on the wealth of the new spouse.

OP, I can see how this might be hurtful that your stepfather (and/or his family) set this up for his biological kids, but this is quite common. In our case, we did it to protect our children so that a second spouse cannot access the money easily.

He is an orphan from the silent generation and he made all of the money himself. The stepkids existed BEFORE the half siblings. He helped raise the stepkids. Not the same facts. There will be no new spouses and we are not from a subsequent marriage. My mom is his same age.