FIREside Chats

Retireinten

greenbee said:

QueenJess said:

Karmacat said:

For those with more than one child, I want to put in a plea to be really, really careful about being fair, and talking through the fairness if possible.  When I was working as a therapist, about past traumas, I also worked with present day issues of course, and the number of times it came up in wills being changed, or children going to uni being treated differently from the previous one, its a real live situation.  None of my personal experience, as I don't have any kids, and maybe it's stopped affecting so *many* families now because the uni rules seem fairly static (don't know, actually!) but it was definitely important at one stage.

Wow, that's sad. It never occurred to me to treat my children differently. I am intending to give them the same amount of money and if one spends on uni and the other decides not to go and spend it on a house deposit instead, then that's fine with me.

KC is absolutely right. Some people adjust their wills because they think one child is doing better than the other financially, but if all have the same opportunities then it may well be down to lifestyle choices and could well change. Or just be perception - we all know far too well how easy it is for people to fund their lifestyle with debt. Obviously its different if you have a child with long-term care needs that have to be funded, or if one has given up work to care for a parent and missed out on career/income as a result, but whatever your perception is, or relationship with your kids, arguments over money when you're gone will only make things worse. TBH, best thing to do is spend it anyway - think of it as saving them the hassle of the IHT and probate paperwork   (Having done my dad's, I've told my mum to make sure she spends everything as I really don't want to have to do it again...)

I completely agree with this.  If one needs help going to uni or decides to blow a good chunk on an expensive wedding then that child will have less money towards a house deposit. Our aim is to gift them the same and they can decide what they spend it on.  


The other caviat for me is that they need to be working, studying and saving themselves to get access to any cash. I am very conscious that much of my financial sense and drive to save is due to watching my parents struggle financially,  whereas my children's childhood has been very different to mine. They can have their fun obviously but they need to be doing their bit too.  We're looking at gifting in the region of £90k altogether, which is a lot of money to us, so I need some assurance it won't be wasted. 

hugheskevi

I think inheritance is probably an easier topic in principle than it is in practice.

My wife has one sibling, and her parents separated late in life so it was all a bit complicated when her father died last year. My wife's circumstances were very different to her brother - whilst she will be retiring at age 44 to head off traveling the world, her brother is still living with his mother despite now being 40, having never really worked at anything, just done a lot of studying for multiple degrees.

Obviously her brother has had far more support from parents when you factor in the cost of 20ish years of free food, bills and accommodation. The parents are not especially well-off, just owning basic properties and little else. The combined total inheritance will probably end up at about £200,000.

My wife's father died last year, and left half his estate to my wife's mother (despite being separated) and half to my wife, with nothing going to my wife's brother. This was sort of on the understanding that all of the mother's estate will go to my wife's brother and that the money he left to my wife's mother would be used to settle the outstanding mortgage.

That all actually makes sense in a strange sort of way and is probably about the best outcome possible. My wife would prefer money earlier in life, as inheriting money once retired would be of little value. Meanwhile, it means her brother should always have the security of a house and ensures his mother has additional cash to provide for him (admittedly, it can also be viewed as continuing to enable inactivity). Leaving everything 50/50 would have resulted in a more difficult situation to be resolved. So it is better my wife gets less but earlier, whilst her brother gets more but later.

Some things I wish parents would do though:

• Sort things out properly when alive - although her father thought he left his house 50/50 it turned out that he had never changed his property from joint ownership so his will was largely irrelevant aside from signalling his intention.
  
• Think about the situation the intentions will create - I can foresee that when my mother dies an awkward situation will be created with one of my brothers who has not spoken to family for decades. I suspect my mother will leave everything split 3 ways equally between her children (she won't discuss it), when it would probably be a lot better to do something like leave a fixed cash sum to the brother we haven't seen in years to make sorting out the estate more amicable and straightforward.
  
• Linked to the above, when amounts involved are (relatively) trivial, keep things simple and proportionate. We didn't plan for an inheritance and are reasonably well-off, so receiving what amounted to around £60K was not very significant - it just meant we will retire about 9 months earlier than we might otherwise have done. I think some parents don't realise the financial position their offspring are actually in (eg my wife's father seemed to view inheritance as a very big deal, which it probably was to him, but not to us).
  
• Discuss wills with children - be clear who will get what, why, where wills are, etc.
• Document financial (and another other relevant details) affairs so they can easily be sorted out, and keep it up-to-date and discussed with children.
  
• Sort out powers of attorney in good time (health and financial)
  

kaycastle

@ElmoR
I'm probably younger than many of the posters but no, too hard to predict what will happen for the kids, there will be pensions of some sort and I don't know whether it will be any harder than it is now or in previous generations, I might go search for some statistics on retirement age but even friends twice my age have no interest like I do and no savings, low pensions etc.. I'll be doing the best thing for them by having a mortgage free property to inherit and they can live at home as long as they want, I'll do that rent free as well so they can save for deposits etc. don't know if that sounds harsh but it's better than what I had

slowlyfading

ElmoR said:

Was wondering about the impact of inter-generational inequalities and the next generation's chances of achieving FIRE? As a group, we have all stepped carefully around the 'if the state pension is still around' type thoughts. Those of you with children, are any of you thinking of ways to help them? Starting a pension for them? LISA is an obvious boost at 18 but is a pension a good idea? Even a tiny amount trickling in?

We have cash ISAs for both of our children and we add a small amount each month - over the next 15 years it should add up. Then, they can use it as they wish - towards university fees, house deposit or whatever else. The plan is to teach them financial awareness so that they don't just spend it on nothing as soon as they can access it!

ElmoR

Thanks for all your replies - I definitely agree with the financial education approach! It has been hard going - have you tried to sit a teenager down to do the MSE course, while being in a lockdown, and their lives seem to be topsey turvey!   I have

I only have the one, probably partly as a result of the sorts of acrimony caused by childhood unfairness that Karmacat has highlighted. It's extraordinary how experiences in early adulthood shape a person.

This thread has really helped though - a checklist of sorts, for various financial education topics, is taking shape...the next step will be spotting those rare windows of opportunity when your teenager is receptive...

Thanks all

ElmoR

remote_control

I often think about what is best to do for the children and I do think financial education is the key. I too worry that my savyness is due to a less affluent childhood. 

I agree with a previous poster regarding people saving for children while they are in debt - I see that on the DFW boards. I want to get our house in order as it were before saving for them. 

I don't think we'll put money aside for them in their own accounts but instead save into our own accounts and gift them some money towards deposit/travel/car etc when needed. I would want to be as generous as I can but agree with a previous poster who would want to see their children working hard/saving etc. 

Everyone is different though and it will be different for every family. I don't think there is a 'right' or 'wrong' answer to this question.

Suffolk_lass

We saved for our son in a way that the money became his without us gifting in a big lump. There are tax implications for cash gifting to your children. Property gifting is a different matter...

ElmoR

Is anyone else feeling glum just now as the markets tumble, the funds drop, and the dream seems to edge further away?!

becky_rtw

Yeah my S&S ISA is looking pretty depressing at the moment.
Hopnig for a win on the premium bonds this month to cheer me up 😂😂

hugheskevi

ElmoR said:

Is anyone else feeling glum just now as the markets tumble, the funds drop, and the dream seems to edge further away?!

Tumble? The FTSE is 2.65% off its 52 week high, the Dow is 2.94% off. That is just normal volatility, nothing to be concerned about.

My most defensive holding, my ISA for funds that will be needed over the next 12 years, is down 1.9% from 52 week high. Taking into account recent dividends there is almost no impact.

There will be far bigger drops ahead at some point in the future, nothing at all to be glum about at the moment.