A friend recently told me that he was reconsidering the division of his assets between his three adult children (he and his wife divorced many years ago). Although he knows that he can divide his wealth however he wants, he loves his children and wants to do right by them, particularly since there is a fairly substantial sum involved. He asked me for advice, but I haven’t had much experience with this sort of thing, and having known these kids ever since they were born, I feel that I’m not impartial enough. With my friend’s permission I’m posting the situation here with some unimportant details changed to see what everyone thinks.
Eldest child (W)
The eldest child has a steady job and a wife. He is a spendthrift and financially is more of a grasshopper than an ant (bought a McMansion he couldn’t really afford, a luxury sedan he couldn’t really afford, holidays every couple of years, you know the type). He and his wife are planning to start a family in a few years so his financial habits have improved.
My friend knows that W needs the money the most. He has often bailed W out financially and although there is some resentment that W is yet to stand on his own two feet, he has been impressed at W’s recent responsibility, and he wants his grandchildren to have a financially comfortable life.
Youngest Child (N)
The youngest child is the one my friend is the most worried about. It’s hard to explain without going into too much detail - he is well-meaning but self-absorbed and socially awkward. N is in his late twenties and shows no sign of leaving home.
My friend feels that due to N’s mental health issues, he doesn’t have the earning potential of B or W. My friend has said that he may be trying to compensate for the fact that he and N do not get along, but I also think that some of it may be “consolation” money since N will likely live out his life alone. He is also worried about what will happen to N when he is gone - N has never bothered to learn household chores, has problems interacting with people, and basically has no idea how to live in the real world.
Middle Child (B)
The middle child earns a very good salary and is close to owning his home outright. He is married, and he and his wife do not want children. He has always been the most easy-going of the three, and I suspect that he is my friend’s favourite.
Intellectually my friend knows that B needs the money the least. But as a good old-fashioned capitalist, he can’t help thinking it’s unfair to punish B for being the most successful. Unlike W, B has never been a financial burden, and unlike N, B has never been an emotional burden. But then again unlike W, B won’t have the expense of children to worry about, and unlike N, B has a a happy marriage and a good life.
Has anybody come across a situation like this? Would you divide your assets equally between W, B and N or would you reduce B’s share and divide it between W and N? Would you give more to someone based on whether they’ll have children? Any responses would be a great help to my friend, as the situation is causing him a great deal of anxiety.