Parents' money, and favoritism / greed (vent?)

[Anonymous]

I just need to get this off my chest, and if you think I need a swift kick in the rear, feel free. I have never cared what my parents do with their money: not my business. I also have honestly, truly never cared that they give more support to my sister (including buying her a house) because she needs more. Recently my parents badly mishandled a real estate transaction and I am so angry about the whole thing. I'm sorry to say I am greedy for the money they are wasting.

My parents are working class Boomers who believe real estate is the path to wealth and success. They've been able to leverage the huge gains on their primary residence (bought cheap 40 years ago in a booming area) to buy more property. In addition to their primary residence, they own:
1. A vacation home. They don't use it much, and keep talking about renting it out but they never will.
2. A rental unit. They paid too much for it, partly because they fell in love with it and partly because my sister was in a bad living situation and they saw this as a solution that would bring in income later. She lived there rent-free for some years, and they only recently turned it into a positive cash flow.
3. An inexpensive house they bought for my sister to rent from them. This house will need work in the future.

We talk about their estate planning (they bring it up) and what will happen to the properties when they die. I have always told them to do what they want, but that I would not be moving into any of the properties because I live out of state. My sister wants the vacation home but can't afford to maintain it, so it would probably be sold also. I always thought the rental unit would be a nice property to inherit but I didn't say anything: I [used to?] believe they should use their money in the way that makes them happy while they are alive.

They sold house #2, the rental, last week. They should not have sold at all, as it was too soon after purchase and they had renters bringing in income -- they sold for emotional reasons and because they want to buy a second vacation home, which they say they will rent out part of the time (I'll believe that when I see it). In selling, they had poor representation, didn't pay attention, didn't read the contract, etc., and ended up shafted. They are upset and complain to me about it. They still plan to take the reduced proceeds and buy the vacation home, which I predict will be an underused money pit. I'm not sure they realize that their loss was stupid and entirely avoidable: they seem to think it was just bad fortune that they "had to" sell now and didn't understand what they were doing.

My child (their only grandkid) and my spouse and I live in a modest home, which I bought with no help. We'd like a bigger place and I legitimately think this region would be a better investment for my parents, but I understand I shouldn't expect them to finance my bigger house. I floated the investment idea once and did not get a good reaction: they would much prefer I move back closer to them, so it would gall them to buy a place here. I do ask for contributions to my child's college fund; my parents give a little at Christmas but not much.

They are intensely jealous of and insecure about my in-laws, who my parents perceive as wealthy and higher-class. They think we / grandkid will like my in-laws better because my in-laws moved to this area to be near us and help us, and give us gifts and money toward the college fund. My parents complain to me that they can't afford to visit as much, give as much, etc., so they feel inadequate as compared to my in-laws. It has never bothered me until now and I've always reassured them. But right now I am recognizing that they absolutely could afford to see us a lot more, give a lot more toward college, etc. We're just not their priority. Their priority is stupid, mismanaged real estate investments.

I don't think it was wrong to help my sister, but right now I am wishing they'd help me as much. I feel like this is money my family and especially my child could benefit from, and it's being wasted. And I also feel terrible about being greedy, because of course it's their money to waste.

I don't really have a question, but if you have reactions I'm interested in hearing them. Thanks!

[Anonymous]

You are being jealous and greedy and you know it. The fact that you having been keeping track would indicate these are not new emotions.

[Anonymous]

You deserve nothing.

[Anonymous]

Yes, greedy. You and your sister are moochers.

[Anonymous]

Both of you are infants. You are just jealous.

[Anonymous]

I'll be less harsh you, OP. Any estate planner will advise parents to plan for their assets in such a way that avoids exactly what you're describing.

Perhaps your sister "needs" more help, but why is that? Was she raised to be less capable? If so, your parents are paying to alleviate their guilt for failing her. Did she simply make bad decisions and she's being financially rewarded for that? Obviously that's a recipe for resentment.

If I were in a position to advise your parents, I'd advise them that it makes sense to leave their children equal amounts, unless they have serious reason to doubt either of your abilities to manage the resources responsibly, in which case they should set up a trust for lesser responsible person. But the asset division should still be equal and it's up to you all to manage it appropriately.

If I were in a position to advise you and your sister after you inherit the properties, I'd recommend getting an assessment on which properties are worth keeping and which you should sell. Split the proceeds of the sales equally. Split the revenue from the rental income equally. What you each do those funds once their yours is none of the other's business.

But, I'm not in a position to advise you, your sister, and your parents. Unfortunately, you're also limited in how much you can advise your parents. You've made your preferences known and they've ignored that. So accept it for what it is, and try to make the most of your relationship for what it is - not what you hope it will some day be.

[Anonymous]

Anonymous wrote:I'll be less harsh you, OP. Any estate planner will advise parents to plan for their assets in such a way that avoids exactly what you're describing.

Perhaps your sister "needs" more help, but why is that? Was she raised to be less capable? If so, your parents are paying to alleviate their guilt for failing her. Did she simply make bad decisions and she's being financially rewarded for that? Obviously that's a recipe for resentment.

If I were in a position to advise your parents, I'd advise them that it makes sense to leave their children equal amounts, unless they have serious reason to doubt either of your abilities to manage the resources responsibly, in which case they should set up a trust for lesser responsible person. But the asset division should still be equal and it's up to you all to manage it appropriately.

If I were in a position to advise you and your sister after you inherit the properties, I'd recommend getting an assessment on which properties are worth keeping and which you should sell. Split the proceeds of the sales equally. Split the revenue from the rental income equally. What you each do those funds once their yours is none of the other's business.

But, I'm not in a position to advise you, your sister, and your parents. Unfortunately, you're also limited in how much you can advise your parents. You've made your preferences known and they've ignored that. So accept it for what it is, and try to make the most of your relationship for what it is - not what you hope it will some day be.

This is excellent. I also would be less harsh with OP. Sure, it is your parents money but as people age they can often start to make serious errors in judgement and as an adult child it can be difficult to know when to step in, if ever. We are at the point now with my IL's. This example is on a much smaller scale but recently my MIL let someone in the house and bought cremation services for thousands of dollars. We looked at the contract and there are so many conditions that it will never be used. How long though before she makes a more serious mistake? You don't want elderly parents to make so many errors in financial judgement that they can't support themselves in their old age. At some point, their money does become our concern, if only because we need to make sure that it isn't swindled away and is available for their care.

[Anonymous]

Your parents' financial life sounds messy. Do they have assets for retirement outside of these properties? I think you need to "rise above" as much as possible. I get what you are feeling - my dad supported my sister through much of her adult life before he passed. That was a few years ago and she's still living on the inheritance, but it won't last through retirement and she needs a job soon. Your parents have done her no favor by creating this dependency. Count your blessings that you're not a part of it. DCUM will probably judge you harshly here, but I understand what you are feeling. Distance yourself as much as possible.

[Anonymous]

Anonymous wrote:I just need to get this off my chest, and if you think I need a swift kick in the rear, feel free. I have never cared what my parents do with their money: not my business. I also have honestly, truly never cared that they give more support to my sister (including buying her a house) because she needs more. Recently my parents badly mishandled a real estate transaction and I am so angry about the whole thing. I'm sorry to say I am greedy for the money they are wasting.

My parents are working class Boomers who believe real estate is the path to wealth and success. They've been able to leverage the huge gains on their primary residence (bought cheap 40 years ago in a booming area) to buy more property. In addition to their primary residence, they own:
1. A vacation home. They don't use it much, and keep talking about renting it out but they never will.
2. A rental unit. They paid too much for it, partly because they fell in love with it and partly because my sister was in a bad living situation and they saw this as a solution that would bring in income later. She lived there rent-free for some years, and they only recently turned it into a positive cash flow.
3. An inexpensive house they bought for my sister to rent from them. This house will need work in the future.

We talk about their estate planning (they bring it up) and what will happen to the properties when they die. I have always told them to do what they want, but that I would not be moving into any of the properties because I live out of state. My sister wants the vacation home but can't afford to maintain it, so it would probably be sold also. I always thought the rental unit would be a nice property to inherit but I didn't say anything: I [used to?] believe they should use their money in the way that makes them happy while they are alive.

They sold house #2, the rental, last week. They should not have sold at all, as it was too soon after purchase and they had renters bringing in income -- they sold for emotional reasons and because they want to buy a second vacation home, which they say they will rent out part of the time (I'll believe that when I see it). In selling, they had poor representation, didn't pay attention, didn't read the contract, etc., and ended up shafted. They are upset and complain to me about it. They still plan to take the reduced proceeds and buy the vacation home, which I predict will be an underused money pit. I'm not sure they realize that their loss was stupid and entirely avoidable: they seem to think it was just bad fortune that they "had to" sell now and didn't understand what they were doing.

My child (their only grandkid) and my spouse and I live in a modest home, which I bought with no help. We'd like a bigger place and I legitimately think this region would be a better investment for my parents, but I understand I shouldn't expect them to finance my bigger house. I floated the investment idea once and did not get a good reaction: they would much prefer I move back closer to them, so it would gall them to buy a place here. I do ask for contributions to my child's college fund; my parents give a little at Christmas but not much.

They are intensely jealous of and insecure about my in-laws, who my parents perceive as wealthy and higher-class. They think we / grandkid will like my in-laws better because my in-laws moved to this area to be near us and help us, and give us gifts and money toward the college fund. My parents complain to me that they can't afford to visit as much, give as much, etc., so they feel inadequate as compared to my in-laws. It has never bothered me until now and I've always reassured them. But right now I am recognizing that they absolutely could afford to see us a lot more, give a lot more toward college, etc. We're just not their priority. Their priority is stupid, mismanaged real estate investments.

I don't think it was wrong to help my sister, but right now I am wishing they'd help me as much. I feel like this is money my family and especially my child could benefit from, and it's being wasted. And I also feel terrible about being greedy, because of course it's their money to waste.

I don't really have a question, but if you have reactions I'm interested in hearing them. Thanks!

OP's parents bought [assume have no mortgage now] their primary home, a vacation place, plus 2 rental properties. Those 2 rental properties were used as housing for 2 of their 3 children. 1 of the rental properties is still occupied by 1 of the 3 children. The other rental property has been sold and the was vacated by 1 of the 3 children and rented to tenants.

As a parent of young adults I view those 2 rental properties used by 2/3 of the children as places for which I otherwise would have been paying rent. So selling one at a loss might not be as great a loss since there were not rent expenditures. If the vacation house is in a location where it doesn't get much use I'd sell it.

For example if we bought a house in the Outer Banks it would not be used as much as if we bought in Bethany, Rehoboth, or Lewes. ie for Memorial Day weekend people could drive down Thurs - relax for 3 days and drive back very early Sunday am. less than 50% of the drive time to NC. If all of OP's parent's real estate activity is too far to benefit OP then perhaps she needs to speak up about her living situation and the parent's would also help her out.

ie gift cash when OP finds a larger place so parents coud have a BR with private bath for when they visit the only grandchild who I assume is a plane ride away. So I would sell the unused vacation house unless the parents are retiring and perhaps planning to live in it.

[Anonymous]

Your parents finances are their business, OP. I understand the favoritism issue is frustrating--I say this as someone whose siblings live on parental support, but I try always to be thankful that I can support myself without their help.

[Anonymous]

OP-

You yourself say you told them to do what they want. And they did. If you wanted to offer some advice why didn't you??????

Don't tell people you don't care about something when obviously you do!

Lesoon learned move on!

[Anonymous]

The way your Parents manage Real Estate, they may be needing you and your siblings to help finance them in thier old age.

[Anonymous]

Liberals love telling other people how they should spend their money.

[Anonymous]

I feel for you, op. not so much on the sibling fairness thing, but it seems like your parents are screwing this up, and who knows how much money they will waste on mistakes in the future. hopefully they will not run out of money i.ln their lifetimespecially, but it is you who will be picking up the pieces if they do. i have a similar situation and unwinding all of my dad's weird investments is going to be a nightmare and cost a fortune in legal bills. his latest brainstorm is to create an old age trust for my stepmother because she's younger, and the trustees he appointed are all older than he is! he also forgot about the gift tax and had to pay a big bill when he gave his brother some money. I really do think he is starting to slip mentally.

[Anonymous]

I feel for you, OP. Unfortunately, not all parents (even those with some wealth) are saavy or fair when it comes to their investments. My dad had a high paying job and inherited quite a bit from his late mother, but he has made some pretty horrible investment choices. All you can do is grimace. I made peace with the fact that he has issues around money (from his rough childhood) and would never plan to invest any of it any tax efficient/smart way. It's easier to tell myself he'll be stupid and his new wife (mom passed away 15 yrs ago) will figure out away to give everything to her biological adult child.