Family Money – Fairness vs. Favoritism in Gifting, Wills and More

by Darwin on October 25, 2009

Family Money is a sensitive topic to cover, but I think it’s critically important from both an estate planning standpoint and from the standpoint of personal relationships with family members.  Primarily, when it comes to things like wills, gifting, and financial assistance to family members (usually children) there are a complex array of considerations that many parents either don’t take into account – or ignore.  Primarily, the topic comes down to Fairness vs. Favoritism.  Let me delve into a couple hypothetical, yet real life examples.

Estate Planning – The Will

The Doctor – A couple in their 60s is looking to update their will now that their children are grown and starting to have children of their own.  They have two children.  Their First son is a relatively affluent doctor whose wife has a decent income as well.  Not only do they pull in a six-figure income, but they have also made wise money moves throughout their marriage.  The doctor and his wife have built a sizable net worth through real estate investments and relatively frugal living given their income.  They’re viewed as “well-off”.

The Drifter – Enter the second son.  He didn’t go to college and never had much in the way of professional ambition.  He has drifted around from various music gigs and bartender jobs to seasonal employment while collecting unemployment in the off-season.  He pretty much spends what he makes, or more each year.  He has no assets in any retirement accounts and often portrays himself as “the victim” to family and friends.  He is generally viewed as “poor” and some in the family feel sorry for him, especially when comparing his prospects to his brother’s family.

The Will – The parents have a sizable estate when considering their life savings and real estate.  Assuming medical bills later in life don’t eat into their nest egg, they’ll be leaving somewhere in the range of $1.5 Million to their heirs.  When considering their sons’ financial situations, they figure that the doctor is in no need of financial assistance and will be just fine no matter what happens.  When considering the drifter, they have constant guilt over whether they could have done more to get him on the right track – whether they could have been more involved in his schooling, taken a more active role in his music career, or just loved him enough to give him the self-esteem to be more successful in life.

They decide that the right thing to do is to leave a token $100,000 to the doctor in their will and the remainder – well over $1 Million to the drifter.  They feel confident in their decision that they’re doing the right thing by both their sons.  They don’t discuss their financial affairs as they’re still in good health and money matters of this nature were never discussed as a routine topic in the family.  They don’t consider what this eventuality may do to the relationship between the brothers; they’re pretty much thinking about what they think is “fair”.

Question – Is this fairness?  Or is it favoritism?


Another fairly affluent couple has two daughters.  Each of the daughters had a similar upbringing and pursued similar career paths – they’re both school teachers.  Given the current tax laws in their state and the size of their estate, the affluent couple has been gifting to their daughters for several years now.  They don’t discuss the gifts openly and usually send a check and card in the mail for each New Year and the unwritten rule is to not publicize or discuss the situation with the others.  The sisters don’t talk much now anyway and it would be awkward to do so, so the topic never comes up between the two of them.

Daughter #1 – She married into a relatively healthy financial relationship; her husband’s an attorney and together, they pull in decent money.  Their children are into school now, so they’re both working.  They live a reasonable lifestyle and have made sound financial decisions, including investing the majority of the gifting money they receive each year.  They’ve each been getting  $2,500 check every year now for 10 years.

Daughter #2 – She started off as a teacher, but now she’s home with her 4 children, 2 of which are in school.  She’s had some tough luck with relationships and is recently divorced – for the second time.  Neither of the husbands had adequate income to provide meaningful child support (and alimony is out of the question).  She’s now primarily living off meager child support payments when they do come, unemployment and gifting from her parents.  The parents are keenly aware of her difficulties and they’ve been gifting her and each of her children $12,000 per year, and in prior years, the maximum amount allowed under tax law.  She uses the gifts to the children to help pay for living expenses.  In addition, the grandparents pretty much pay for all the clothing and entertainment for the kids and give a lot of cash gifts at holidays outside the purview of the IRS.

Over the years, Daughter #2 and her children have been gifted in excess of $200,000.  Daughter #1 and her husband have been gifted approximately $50,000.

Question – Is this fairness?  Or is it favoritism?

Tragic Health Expenses

Finally, consider the couple that has two children.  The older son is in normal health and in his thirties and they have never gifted him, paid for college or provided any sort of financial assistance outside the expected child-rearing expenses.  The younger son is in his twenties now.  He has been afflicted with various autoimmune disorders since childhood and has needed virtual constant hospitalizations and treatment.  He can’t really take care of himself and between his medical treatments and help with constant caretaking, the parents have pretty much exhausted their retirement savings and expend the majority of their current cashflow on maintaining a dignified life for him since what is provided by government assistance isn’t adequate.  The older brother is well aware of the situation, and has lived his entire life watching his brother suffer.  He wouldn’t trade his health for anything – including his parents’ money.

I’m not going to ask the question.  It’s no longer a question of “Fairness” when it’s life and death and the recipient had no role in their predicament.

As you can see, it’s not always simple.  It’s easy to judge the motives and actions of others depending on your vantage point.  However, in the first two situations, there will clearly be some animosity when the other sibling finds out just how lopsided their parents’ treatment was.  Parents reading this have to ask themselves “Is that the legacy I want to leave?  Children jealous and fighting?”.

I’m not writing this post because I have a personal gripe about fairness or favoritism, as my family’s routine affairs and estate planning (including ours to our children) have always been set up with a keen focus on fairness – an even split no matter what.  However, I see it routinely with friends and acquaintances and it’s evident that while many families are confronted with difficult circumstances, decisions are often not applied consistently or in a transparent manner.

What Are Your Thoughts and Similar Examples You’ve Experienced or Heard Of?

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1 Jim October 27, 2009 at 5:18 pm

I think it depends on exact situation and the attitude of the children. You’re always going to have heirs with unequal financial situations. Whether one person or another should get more than someone else is really very dependent on the situation.

Personally I don’t think anyone should live with any expectation of getting any inheritance. So if you get any money at all then it should be treated as a unexpected windfall.


2 Alexandra October 28, 2009 at 11:41 am

Great scenarios.

I think that in the first case, each son should get the exact same amount. Parents should not use their will as a tool to reward children for “good behaviour” on the one hand, or make up for deficits in children’s behaviour on the other hand. Equal division is the only fair way. Any other division send a message to the children that can be wrongly interpreted in too many ways.

Gift when the parents are alive are different. My parents are free to spend their money as they choose. I know for a fact they have helped out one of my sisters in the past. I am doing fine and don’t need their help. That’s what parents are for.


3 Darwin October 30, 2009 at 8:07 pm

Good points – agree that nobody should go through life “expecting” any sort of inheritance. It’s a ridiculous way to live and if you’ve lived responsibly, by the time you inherit something if your parents make it into their 70s or 80s, you shouldn’t even notice the money anyway due to a lifetime of responsible saving/investing.

Aside from that though, when the heirs are left looking at each other and seeing that they were treated very differently (deliberately) in the will, wouldn’t you think that might foster some sort of resentment? In some cases, I presume one heir would be indifferent and wouldn’t care. In other cases, I think they’d wonder whether it was fair – whether they needed the money or not.


4 Len Penzo October 31, 2009 at 2:50 pm

I believe in fairness always (for the first two scenarios).

The biggest risk in the first scenario is that the Drifter, having already proven himself to be personally irresponsible, would most likely quickly squander away the bulk of his inheritance anyway.

Great article, Darwin!

Len Penzo dot Com


5 Four Pillars November 2, 2009 at 12:14 am

Some interesting scenarios. I agree with Len – in the first scenario I would probably just split it equally. Although Len is right – the ‘drifter’ might just piss it away.


6 Laurie December 30, 2009 at 9:28 pm

These are good scenarios that present a common moral predicament often
faced by parents whose adult children don’t fare equally well in life. I have rarely seen any articles on the topic of favoritism where the gifting is switched and the lion’s share is given to the most successful child, while the one that struggles is neglected. I wonder how common that is and what the answer to that should be.


7 Natalie Kelley August 6, 2010 at 11:01 pm

I am 42, married with 2 kids. When my husband and I got married, we literally had nothing more than a Coleman lantern, two sleeping bags and our educations. We have struggled and sacrificed for 15 years to build our own business. We have accomplished this completely on our own (NO parental help!) and have saved for our own retirement, not expecting any inheritance.

I have a younger brother (39), married with 3 kids, who has spent just about every penny he has ever made. My parents have bailed him out of credit card problems and have subsidized his whole life — they even liquidated $150K in cds to buy him a house with cash. I suppose it’s important to say he is also employed by my dad and receives a decent salary, though is clearly not as “well off” as my husband and I.

When my parents bought him the house, I honestly didn’t know how to feel. In my mind the question loomed, “Why was it okay for my parents to watch me live in a rat-infested hovel and struggle to make ends meet, but NOT okay for my brother?” I still can’t wrap my brain around it!

The kicker came this weekend when my parents called to say they wanted us to go on a cruise with them and that they were paying for my brother’s family to go, but that we would have to pay for our part of the cruise ourselves. When I asked why they were paying for my brother’s trip they said that he can’t afford it, but we can.

I told my parents this hurts me and they responded, “You’ve had it in for your brother since you were three years old! You are jealous!” (That would be when he was born.) The truth is: I really love my brother, but I hate the divide that their favoritism puts between us.


junebug Reply:

@Natalie Kelley, I think your brother is coddled and spoiled, and that your parents are being very unfair. He is an under achiever, probably because your parents put a pillow under his ass everytime he falls. So he relies on them. Why should he work hard when they are supporting him. Maybe they didn’t help you because you didn’t ask?? I don’t know. I shudder to think what the inheritance will be like. Good luck.


8 Blacksheep Daughter November 15, 2010 at 11:06 am

My elderly father suffers chronic failing health. He lives in his own home. He has two daughters. I am the ELDEST daughter. His YOUNGEST daughter, lives next door to him in a house that he owns. She pays miniscule rent if any at all, has been rescued from one financial tragedy to the next, had $200K+ worth of handouts over two decades whilst living off the single parent pension. She raised two children with different fathers, receiving alimony from both. She attained a BA and MA. My father supplemented her pension, doled out money hand over fist for two decades for both children’s school fees, uniforms, clothing, shoes and made it possible for her to educate herself. She worked casually throughout the years. Her now 21yr old son & his 16yr old pregnant wife live with my father, waiting for him to die, so that they can inherit the family home. Well so the story goes in the local community. My sister’s second child, an 18yr old lives at home with her, but enjoys cash handouts from my father as required.

As the eldest daughter, I saved hard in my first job, & at 21yrs old, set off on a worldwide adventure of travel/work. I made numerous trips back home to visit my father, sister, nephew & niece (as mentioned above) at times living hand to mouth to do so. I spent hard-earned cash to send gifts home to the family and phoned and wrote to keep in touch. I found a sensible husband and we have settled in a neighbouring country. We are not poor, but we do have a biggish mortgage, and all the normal day-to-day living expenses. We have an autistic/ADHD/moderate intellectual disabled child, whom has enormous medical/therapy costs. My father once gifted airfares to me and his autistic grandson, but ceased doing this 3 years ago. He says he cannot afford it any longer. I can’t afford to travel to see my family. I have not ever had any emotional/financial support from my father, nor has my special needs child. My child still plays with the only present given to him from my father, and it is broken.

The psychological scarring from this disproportionate situation has taken its toll. Any dealings with my family are ambivalent and evasive. However, my father enjoys keeping me up to date on the imbalanced ledger. I have been under pyschiatric care for major depression for 12 years, and constantly question my “judgement” and “self”. I struggle continuously to reason with the unfairness. I can’t move on. The financial inequality is one thing, but the way my father’s cruel behaviour makes me feel, and the divide it has caused between my sister and I, makes me so sad. I would appreciate any comments. (Identity withheld please)


Loren Reply:

@Blacksheep Daughter, Hi, I am responding to a post you made in 2010 about sibling inequality by a parent. I am your mirror, my widowed mother has subsided my sister and family. I am not jealous of the finances but of the attention and concern and the lack of to me and wife. When I was in college I worked part time and on the GI bill, not a text book was purchased or a semester paid. Mom paid for my sister and her two kids and sorority/fraternity. She bought them cars, an expensive wedding. At Christmas we received coats, they got flat screen TV’s. Ten years ago I seriously broke a leg skiing, 2 surgeries, metal plates and screws, physical rehabilitation and a two years without work. Not $50 was sent, now my sister and she have spent my fathers insurance largely so she is beginning to worry about her future and her favorite 50year old child. I have always lived beneath my means and have saved much for retirement, own two homes. She is asking if needed I should assist her and provide a trust for her and sister. My moms family is long lived and my father short, I will most likely follow my father and my wife is similar, we have no kids. I am contemplating setting up a trust that would augment her pension, but just enough to get by. She is my mother, but that’s the most I will provide, the balance to a no kill animal shelter.


9 jj January 21, 2011 at 5:39 pm

First, I must say that no one should expect an inheritance but if there is money given, I really hope that parents strive to be fair. I’m about to break off relations with my younger sister (baby of the family) due to years of favoritism. I’m not going into the story here. The reason I think parents should be fair in their will is that you don’t know what will happen once you’re gone. If my parents had passed away just 2 years ago and left more to my sister, it would have seemed fair since she has always earned less and does not plan well. However, this year I gave birth to a son with a handicap and suddenly my husband and I find ourselves in medical debt. While we have always been the responsible ones, we are now wishing we could get some help (though not expecting it). You just never know if tragedy or circumstances can drastically change for your children once you’re gone. Plus years of favoritism only causes rifts in families.


10 Lioness April 12, 2011 at 11:07 am

My husband and I have six grown children. We will most likely be leaving them each the same share of whatever is in our estate. They are all different and have all attained different levels of success (and failure) in their lives. We have helped some more than others over the years, but when its time to divide the remaining investments, it will be done evenly. If they squander it, so be it. They will have no one to blame but themselves.


11 dee April 8, 2012 at 8:12 pm

While life is not always fair, it IS always fair to treat children equally to children. The doctor has money because he chose to make something of himself, the drifter made his own bed. One should not be punished because they are responsible. Leave both children the same amount or if you gave one more in in their lifetime, make up for it by leaving the other one more in your will. I have experienced first hand the favoritism of my husband’s parents toward his brother. This has caused many hard feelings, yet continues even today. This family CHOOSES not to work and to live off the handouts of others. Our family all works and is never given any “handouts”. How is this right?


12 Grant November 28, 2012 at 1:27 pm

My wife feels like she is being shafted by her father and her brother. He is to inherit the million dollar farm and she is to be given four acres and a house to “take care of her.” The hurt and bitterness that she feels is tearing our family apart. She harbors anger towards both of them, but is the kind of person who just wants peace and not confrontation.

I have suggested that she needs to stand up for herself, but she will not. Believing that it was my responsibility to “defend” my wife, I said something to her father, but he stubbornly refuses to consider her wishes, believing that a farm cannot be divided, even though he knows of a distant relative who gave his farm to his three children to share equally and do with it what they want.

I am unable to be around her brother now without these feelings of anger coming up, so I just avoid all contact with him. I told his wife that this inheritance issue will just divide our families. He does not seem to care and seems to be just angry that I “dared” to bring the topic up to his father. Our children call him their greedy uncle and don’t wish to have much contact with him either, especially knowing that my father divided his estate equally among my brother, sister and I.

Sigh! Is there anything that I can do, or should I just resign myself to an estranged family for the future?


13 Michael January 5, 2016 at 3:25 pm

I just wanted to say that this kind of thing .ost assuredly happens in many familys. My mother passed away suddenly at 65.She always insisted She would be fair to all four siblings, even if one was in jail. God I miss my Mom. My father remarried 5yrs. ago to a very needy and manipulative wo man. Long story short. She got everything. Fairness to me us a fantasy. I cant tell you how hurtful this was and still is. My father was duped and there are other large instances of financial unfairness in both sides of my mother and fathers families. The four siblings could have really used some of this financial help. Two of us have chronic health issues but the psychological damages to us far outweigh any financial fairness. We are the four that just never got their break of any kind. Im in the process of cutting off family members that have benefitted from these unethical windfalls. I
I strangely enough live practicing one of my fathers own sayings. He was a born again christian and often talked the talk but didnt always walk the walk. He wasnt grounded at all. He said: All choices in life have consequences, so make the right choices. To everyone out there contemplating your wills, please be fair first. Always fair. I have alot of emotional s arring to heal. Thanks for letting me share.


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