Treating Siblings Equitably: Financial Dilemmas

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Treating Siblings Equitably: Financial Dilemmas

By JLP | November 17, 2007

Common Dilemmas:

One child has a very expensive, long-term hobby/talent which requires expensive training, travel, equipment.
One child has a disability or other problem that requires expensive therapy, schooling.
One child gets into legal trouble or develops substance abuse problems that require expensive attorney fees, rehab, and other financial obligations.
One child moves home after college and/or requires years of financial subsidies from the parents in order to make ends meet.
One child gets no scholarships or grants for college.
The parents need assistance later in life, and one sibling cannot (or will not) afford to contribute financially.

In each situation we can assume there is at least one other child who is financially independent or who does not share the additional financial obligations that his/her sibling presents. What’s a parent to do to make sure all siblings ultimately receive equitable amounts of financial resources, in addition to time and attention?

Ideally each child would be born with a trust fund that can be used for any special needs/wants growing up (including education). Whatever funds the child does not take out can grow and compound and pass on to the child at age 30. That way the children with special needs get the assistance they deserve, while the more independent and/or less needy ones are rewarded as well.

Of course that’s not possible for most families. Many parents don’t develop a significant net worth until their children are much older (if ever). One option for them is to leave more of their estate to the child(ren) who required less financial assistance, especially if one financially-able sibling cares for the parents in their old age.

How does your family deal with the inevitable inequalities that arise where money is concerned? Most PF blog readers are probably the responsible, capable ones who secretly might resent your under-acheiving, financially-subsidized siblings. Does that cause unrest? Do your parents attempt to address it (while alive or upon their deaths), or do they simply ignore any such instances?

More from Meg at The World of Wealth

Topics: Financial Planning, Kids and Money |

Comments to “Treating Siblings Equitably: Financial Dilemmas”

Mrs. Micah Says:
November 17th, 2007 at 11:06 pm

Well, my hobby (ballet) cost more than my sister’s (soccer) but they both took up the same amount of time, or so, which made it feel equitable as kids. Neither of us has needed major financial assistance so far, though my parents paid for the wedding and I doubt she’ll be getting married. But she knows that’s an option if she chooses to…and I wouldn’t be surprised if they’d be willing to give her a couple thousand at some point as a–”you’re own your own wedding-wise, but since that’s probably not going to happen, here’s something to invest or use for a house or whatever.”

Since we both got equal amounts of time and attention, and neither of us has needed much money, I guess it’s not really been an issue in our family.

The one suggestion I’d make, then, is spending equal time with the kids, or something close to it.

paidtwice Says:
November 17th, 2007 at 11:40 pm

Here’s a funny thing.

I come from the situation you describe. My two brothers are financial dunces, and my middle brother frequently borrows from the “Bank of Dad” as we call it. My parents aren’t wealthy by ANY means but they bail out my brother on a regular basis from catastrophe after catastrophe, and my youngest brother, at the ripe old age of 30, still lives with them.

I was the one who left for college and has never asked for a dime since.

And honestly… I don’t care. i’d rather be where I am. I feel sorry for my parents not envious of my brothers. It might be different if it was a hobby growing up that took a lot of money or something, but as adults I just wish my brothers would grow up.

k Says:
November 18th, 2007 at 3:03 am

My parents have stuck firmly to the idea that they want to be “equal” in their devotion to giving each of us the best they can to help us succeed in life in whatever ways fit us as individuals.

We’re different people, though, and different ages - and it’s played out differently over time. For example, when I was approaching junior high, the school I was supposed to attend was found to have the highest pregnancy rate in the state (yes, this is for 6th-8th graders, here). My parents scrimped and saved and got me into a private school for a couple of years; then we moved to a better district, and both my brother and I went to public school from then on.

Did my parents worry about the fact they paid for 3 years of private school for me, but not for my brother? Yes, some - but it was clear to them that the best option for my brother was not what had been the best option for me, and they went on with their lives.

As it happened, when we got to college, things reversed themselves - I, the OCD one, got a full ride, while my brother, the “oh, I’m sorry, I guess I just forgot to turn that physics homework in all last month… what do you mean that means I get a D? But, look at this great thing I figurd out in the meantime!” one, had his way paid by my parents.

But I don’t think it had to be that way - if it had been the same one of us needing more money at each point, so be it. For both of my parents, it was clear to them (and to us, once we were old enough) that they were giving us far more than they themselves had received in the way of resources and stability. For one of them in particular, they had grown up with a sibling who was in a lot of trouble, and over many decades, received far, far larger financial contributions from parents - and they have made it very clear that they felt this was entirely appropriate (the sibling needed they help, they didn’t).

plonkee Says:
November 18th, 2007 at 4:51 am

My parents were (and are) into being very fair and equitable with all of us kids. They probably spent more on my hobbies (music) than on the others, but the others had the same opportunities.

Some of my siblings moved back home after University and so have been partially subsidised by my parents. This doesn’t bother me in the slightest because I could have done the same thing if I’d wanted to.

I guess I’m saying that equal opportunity is more important than equal cash.

Leslie T Says:
November 18th, 2007 at 8:12 am

My parents seem committed to providing for me and my brother both equally since we have left home. This may stem from a problem my father had, where his brother got more support from their father while he lived, but then in his will, my grandfather skipped over my uncle and left money directly to his children, saying that he had “provided amply” for my uncle during his lifetime. This did leave some resentment and unhappiness and I’m sure my father wants to avoid this with me and my brother.

So even though my brother has married and had three children to provide for, and I have none, my parents continued to support us both equally. I remember being surprised when they sent me some money out of the blue. It apparently was because they had sent an equivalent amount to my brother to help him with some major expense he’d run into.

dawn Says:
November 18th, 2007 at 9:19 pm

I have two twenty-something age sons that required different needs at different times.
Sometimes one might have required more financial attention than the other.
But, then at another time the other one needed more. Basically I believe it evened out over the long haul.
But, I think it’s o.k. for kids to learn that life isn’t always going to be exactly fair at all times.
That’s life!
But they both also knew that we loved them more than anything. And we spent time with them individually as well as together.

The Simple Dollar » The Simple Dollar Morning Roundup: Talking to a Friend Edition Says:
November 19th, 2007 at 8:31 am

[...] Treating Siblings Equitably: Financial Dilemmas If my children are all in adulthood and one of them comes asking for a loan, I won’t give it to him without offering those same terms to all of my children. If we decide to give some cash to one of the children, we’ll give the same to all of the children. My wife and I have discussed this, and we feel it’s the only fair way to do things. (@ all financial matters) [...]

J Judd Says:
November 19th, 2007 at 9:15 am

This is the case with my husband and my inlaws. My husband is the successful one, the one that left the house at 18 and has always provided for himself. He bought his first car with his after school jobs. He had two and three jobs at a time while growing up to support his needs. While his sister got her first car given to her and her college paid for, because she was not as independent, and more needy than my husband. Not to mention that “the girl” always gets treated kinder because is perceived as a weakness.

Personally, I see as rewarding the lazy and punishing the hard worker one. There was an article a few years ago about this topic on Money magazine. It talked about how to distribute your will if you have a two children where one is a successful doctor and the other one is a teacher. Should you leave more to the teacher because of the low salary since the doctor makes plenty of money and may not even needed? or should you still split it equally?

I also see the difference in the grandchildren, the kids of the daughter get more than the kids of the son. A lot of it has to do with women are closer to their parents then men are, but why punish the grandchildren?

Dr. D. Says:
November 19th, 2007 at 9:42 am

Not to stir the pot, but don’t you think parents have a favored child? My parents did, and it wasn’t me.

My brother got the better end of all the toys and hobbies, while I had the bulk of medical expenses. Perhaps in my parents’ minds that was “even”, but it didn’t feel so to a child.

Then into young adulthood, he had their support while I struggled for years because I didn’t follow their game plan. Yes, it was my choice and I happily live with the consequences. I’m the financially wise one while he wallows in debt.

“Doing without” and taking care of myself is my standard, while for him it’s still all about the toys.

As for inheritance, we’ve been told it will be equitable, but I have no such expectations. I anticipate that once again he will get the lion’s share because I’ve been a saver. In my parents’ minds, this will likely be equitable.

It’s tough for parents to admit they favor one child and will do quite a few mental twists to justify their actions. The result, sadly, leaves a wall between siblings.

Peter Says:
November 19th, 2007 at 1:18 pm

My siblings probably feel I’m the spoiled one, and got more growing up than they did. However, finacially, I’ve only once asked for funds from my parents and intended on paying them back (they gave me more than I asked for and forgave the loan up front), and what they have given me has been significantly less over the years than my siblings who have “needed” it to get by, to the point of beginning to count on it. They have gotten bailed out multiple times.

I have thus told my parents, that if there is anything specific (e.g. jewelry, antiques, heirlooms, etc.) that they wish us or our kids to receive, feel free to give it to us while they’re alive, because I’m not expecting anything once their gone. My ultimate feeling is that on the one occasion when I needed them, they came through for me and that was great. Everything else is theirs to do with as they will. It’s not my money, and even though I can feel resentful, they can spend or donate their money any way they want be it church, charity, travel, food, or other siblings. Anything they can give us in the end is just a bonus.

With respect to my kids, no matter what you do it’s always unfair. Why does he get to take guitar lessons and I can’t take piano lessons (conviently forgetting the horseback riding lessons which are an arm and a leg that she was taking a his age)? It’s an on-going thing and we try to keep the playing field somewhat fair, with the understanding that it isn’t always perfectly fair.

With respect to my money, I’ve told my kids for a long time that I’m using it up 15 to 20 years after I retire and they better be ready for me to move in with them, I’m giving them plenty of warning :-). I’ve also said that if they come home from college and live in the house that aside from paying me rent one of their chores will be to clean my toliet (if that ain’t a motivator, I don’t know what else could be). While there is an aspect of joking in all of it, it paints a picture that I do expect them to strive to be independent and able to stand on their own. Hopefully it’ll sink in, I don’t have a kid right now in serious trouble, struggling finacially, or fighting a drug addition. So a lot of this is easier said than done.

JLP Says:
November 19th, 2007 at 2:13 pm

This is a great topic.

I don’t think there’s any way for parents to be totally “fair” when it comes to raising their kids.

My wife and I were “poor” when we had our boys. We were much better off when we had our daughter 7 years after our youngest son was born. So, we can afford to do more for her than we could for our boys when they were her age. I wouldn’t say we spoil our daughter but she definitely has a different life than they had. Of course the other side of that is that we have a ton of family stories that happened before our daughter was born.

Now both my boys will tell you that we spoil our daughter but that’s probably more because she’s still little and needs lots more attention.

Anitra Says:
November 19th, 2007 at 2:29 pm

I’m an only child, but I’ve experienced this second-hand with my husband’s family. He is the oldest, so he was spoiled a bit as a young child, but now that he is grown and working, we’re expected to help support his younger brother and sister - who aren’t as motivated as he was to get out of the house and support themselves.

It can make him bitter at times, since he has significant student loans (his parents were not able to put any money towards his private university education - the “parental contribution” came in the form of additional loans). But we both love his family and want to help them, so we do what we can.

klf Says:
November 19th, 2007 at 3:41 pm

I have one brother. I don’t feel that either one of us has ever been “favored” over the other.

We are now both in our 40’s (egad!). Due to several extremely poor choices in my brother’s life, he became disabled due to a driving accident. He now lives with my parents and I’m fully aware that they heavily subsidize him financially.

This does not bother me, as it is my parents’ money and they can do whatever they wish with it. I do not expect anything when they are gone, and I most certainly do not expect anything while they are alive. I keep telling them that if they do it right, there should be nothing left at the end.

It is my opinion that as adults, one should get over the “fairness” of it all, and understand that it is not your money. Being resentful of what your sibling gets, or what your parent is doing with their money (which they earned, not you), achieves nothing but a headache and stomach ache for you.

Meg Says:
November 19th, 2007 at 4:42 pm

Wow, these are all great comments and insights. As several have mentioned, there’s no way for it to ever be totally “fair,” especially when kids are born years apart and with unique needs and desires (and problems).

I think the most important thing is for the kids to realize that the INTENT of the parents is to treat each child equitably (not necessarily equally), and to do their best to give each child the resources he/she needs and deserves.

My parents always worked hard to make things “equal” with the 4 of us kids. They even went so far as to buy each of us the exact same model car (different colors) at the exact same time (a one year old used sedan on each of our 18th birthdays). Now when we all go home for Thanksgiving there are FOUR Volvos in front of the house. It’s quite a sight. I guess it’s easy to make things even since we’re all girls and we are close in age.

The amount of money spent on us doesn’t matter to me–I’m sure the cost of each of our educations, hobbies, and needs varied over the years. But I know we each got what we needed and more or less what we wanted, too. And if any one of us ever needs extra financial assistance, I’ve no doubt my parents would jump in to help with no objection from any of us other siblings. And for that matter, so would I.

ETS Says:
November 20th, 2007 at 8:13 am

I think that there is no way to be entirely fair. I am the oldest. I went to a very expensive private college. My parents paid what they could but when I got a good job out of college they gave me the loans as I could handle them. My next brother when to an out of state public school but did the 5 year plan and got borderline grades. Then he moved back home and got a crappy min wage job even though he had an engineering degree. He lived at home for 5 years or so. My youngest brother went to a public college and has been on his own ever since and doing very well for himself. I got married and my parents gave us $10k for the wedding. They also bought us appliances for our new home. My middle brother will never get married (probably) but my youngest will. Both boys own homes and I’m not sure my parents helped out as they didn’t with my first home. Part of my parents push to give to us I think was the inlaws who give excessively. My parents are now divorced so I don’t see them being able to give what we got. We also got a substantial gift from my grandfather for our wedding which my brothers won’t ever get because my grandfather has passed. I’ve never really thought about it but it looks like I am the one who got the most. I don’t know if it’s ever crossed anyone’s mind but I’m certainly going to talk to my dad about this. I know my parents have given loans to all of us with the understanding that it will be paid back. I know when my parents die, I don’t expect anything.

My dad is trying to figure out a why to make things even but right now I am married and have 2 kids while my brothers are single. If dad were to pass today, my family would probably get the most because dad wants to give to the grandkids. Also, dad’s new wife has 2 children who my dad is planning leaving part of his estate to. The one daughter is currently going through a divorce and the other isn’t married yet. Some people feel that my dad should not leave his dad’s money to his new wife’s kids. He got married to her when her kids were in their 30’s so he never raised them. It doesn’t really bother me because it’s his money to do what he wants with and this is now his family. I also expect nothing so if I do get anything, it will be a windfall.

Kelly Says:
November 20th, 2007 at 1:12 pm

Great topic and I can identify with many of the comments!
My (half) brother is 12 years older and did not have the grades or desire to go to college, whereas my parents fully paid for my tuition at a private college with the help of my many scholarships. However, they helped him during his multiple divorces and I believe with down payments on his different home purchases.
My parents paid for my wedding (despite my offer to elope)and gave us help with our first house down payment. But my husband and I have never asked for a penny, which seems to make my parents want to give it all the more. They have always said that they want to give us money when we need it and while they can enjoy seeing the benefits, rather than when they die and when we’ll be financially secure. So I guess you could say that they helped both my brother and me but in different ways and at different times because of the age difference/stages of life we were in.
Fortunately for us, we have only one daughter (currently only grandchild for either side of the family) and have no plans for expanding the family so it’ll be an easy choice for us.
My in-laws seem to lean towards giving the needier son (my brother-in-law) slightly more help, but help on a smaller scale. They let him move back home for 4 years while he paid down student loans (his choice to attend a private school when they offered to pay for state school–which my husband took them up on). We got a honeymoon cruise and washer and dryer from them. They’ve openly stated that they believe in “Dying broke” and even had us listen to their copy of the book on tape.
We won’t “expect” anything from either set of parents, rather we just hope not to be financially burdened someday while supporting them in their old age. We’d rather they save their money for retirement than move in with us some day!

Dawn Says:
November 20th, 2007 at 3:29 pm

As an adult child with a sibling, I can say I have never been jealous of my brother even though I imagine my parents give him financial assistance (as they have me on ocassion) because my parents don’t talk about that. It is their money. What they do with it is their choice, and when they have assisted me, they have always said, this is between you and us, and no one else. I don’t share that info with my brother and he doesn’t share it with me.

Barbara Says:
November 20th, 2007 at 7:08 pm

I am the oldest of 5 and can relate completely. We are all 40+ adults now but my mother continues to support 2 of her 3 sons whenever they have financial difficulty….and since they don´t save, plan or have any sense of frugality, this is a constant situation. My sister, youngest brother and I are financially successful without a dime from her, but she has no respect for this and refuses to even admit that we might know how to handle money. Meanwhile she is 75 years old, continues to work out of necessity with no personal savings or retirement nest egg left because she gave it all to her “hard-up” sons and their get rich quick schemes who still have nothing to show for it (and it was a substantial amount she has given them over the years, not chump change).

It makes me angry to see her in such financial straits. Do I feel obligated to help her? Yes and I can easily afford to, but I know any money I give her will end up in my brothers’ pockets. Have tried to find ways to just pay for things (like having her utility bills sent directly to me) but she is too proud to accept help or advice and is in extreme denial that there is even a problem, she also lives 600 miles away so it is difficult to intervene.

But you can’t help someone who won’t be helped and it is more than frustrating. My brothers have ruined her financially but she has let them because of her beliefs that if they have trouble its her fault for raising them wrong and therefore she is responsible to bail them out. No one has been able to convince her that they as 40-something grown men are responsible to support themselves.

So unfortunately my sister, youngest brother and I have only limited success in assisting her. Its very sad really, but there is nothing we can do.

Michelle Says:
November 26th, 2007 at 6:01 pm

I have one brother, we are now both in our mid 20s and I never even thought about whether things were evenly given to us. My parents did pay for all my college and expenses, they offered this same deal to my brother but he chose to go into the military instead. So I guess I got more, but I dont think my brother would resent that because he knows he had the same option open to him.

He is not as good at managing his money a I am so they may end up helping him more at some point, although if my brother was in such a bad situation with money that my parents felt he needed more, than I would want him to have it. I would never want my brother or his future family to suffer if I was doing fine just for the sake of being fair. I would feel no resent at this, but hope for him to continue the same lifestyle we always had growing up.

Why I Won’t Spend the Same Amount on the Kids | My Dollar Plan Says:
December 21st, 2007 at 8:36 am

[...] All Financial Matters brought up some additional reasons discussing the financial dilemmas of treating siblings equitably. [...]

Katy Says:
January 29th, 2008 at 5:29 pm

I am 35 and my sister is 33. My sister got pregnant at age 16 and ran away from home. My parents have been supporting her ever since.

I went to university, got a teaching job, and have received nothing. I bought my own house and my mother gave me $2000 for the downpayment and has been reminding me of that ever since. That amount is a drop in the bucket compared to the hundreds of thousands of dollars they have given to my sister. They refuse to see it, however. They pretend it isn’t happening. My mother, in particular, lies to me about it.

My parents are not wealthy, however, over the past sixteen years, they have given my sister at least $200,000 (that I know of - it’s probably much more). They have put a second mortgage on their home, maxed out their credit cards, dwindled their retirement savings, etc., to give my sister money. Now, her son is about to go to college. My mother is now saying that she is going to put him through school, since my sister is unable.

If I do get an inheritance, it will be very small.

If my sister asks me for money after my parents pass away, I am going to say NO.

Mel Says:
May 12th, 2008 at 4:37 am

My sister and I have different fathers which caused no end of problems when we were younger. My dad was always involved and my sister’s dad wasn’t. My dad even paid extra maintenance to my mother as my sister’s dad didnt pay anything. My whole childhood was spent bending over backwards to make my sister feel better, and often when my mother couldnt afford to send us both to things (ballet, gym classes etc) I would tell her to send my sister rather than me (I remember saying this at 8 years old).

Then when my sister was 18 she got sick and went bankrupt. The family tried to get her out of the hole she had gotten herself into but it wasn’s possible. She was unable to work because of her illness and of course the family helped her out (including me) and noone begrudged her of that. THEN she got pregnant at 18 to her new boyfriend and decided to keep the baby. After that, the family helped out with money, etc etc to help them stay afloat… and no-one begrudged them that either.

Her boyfriend then decided to quit his well-paying job to go back to uni for three years despite having a young family and no money. Of course, we all helped them out over that period too. THEN they decided to have another baby - so of course, more money from all of us. Her boyfriend now has a job that has nothing to do with the degree he did - the thing that was supposedly his life’s passion.

They have now decided to get married and guess what - we are all paying for the wedding and they are paying for nothing (despite my sister getting a payout due to her illness of about $200k last year). I was given the impression they were saving up on their own and were really struggling, so offered quite a large contribution and have now just found out that everyone else has offered the same. I’m a chump.

The worst thing is that I could have asked my dad to pay for my wedding but I didnt, as I wanted to prove that I could stand on my own two feet. If anyone should have taken the same stance it should have been my sister and her boyfriend - especially after all of the help and the handouts they have been given over the years.

The most upsetting thing is that my mum contributed $300 to my wedding cake for my wedding and I have just found out that my sister is getting $2500!! (This is despite my dad giving her $5000 towards the wedding, which is the same amount of money he spent on a car for us last year - which we didnt ask for).

I feel as if I have spent my life bending over backwards to try and make my sister not feel bad about her circumstances, but hey - looking at her circumstances now they dont look so bad! Meanwhile when I was struggling financially a few years ago I took a second job…and my husband and I are a couple of years away from having kids as we dont feel we can afford them right now.

I dont know what to say to my mother but I cant look at her or my sister right now. When it was for the kids I didnt say anything - when mum won lotto and gave it all to my sister i didnt say anything - but when we paid for our entire wedding and they are paying for nothing i dont understand why mum thinks it is appropriate to give them so much more money than us!! So much for working hard and paying for yourself.

Ethiopia, Equality, and the Principle of Fairness | My Family's Money Says:
July 30th, 2008 at 11:36 am

[...] I read posts on My Dollar Plan and AllFinancialMatters that got me thinking about the whole issue of fairness and being equitable with one’s [...]

Erin Vilano Says:
February 7th, 2009 at 4:52 pm

If it is favoritism I do think it is wrong. However, I grew up with one older sister and a younger brother - - both of whom required much more financial help from my parents (and now me) than I ever did. However, both have been significantly affected by health problems and bad luck. They are by no means lazy or not trying, so I don’t mind at all. I will much rather be in my position and able to help than having to rely on others for funds.

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Treating Siblings Equitably: Financial Dilemmas