LONG POST ON INHERITANCE DRAMA
I've talked briefly about this before in my journal but here comes a long-winded post on inheritance drama I am looking for some solutions on:
Back in 2017 my grandmother (my step dads mom) died and left behind a very large estate (my guess is around $5million dollars). My mom and step dad decided in 2018 that me and my four siblings would share in this estate and we would each receive $200k. They made it clear this was the only money we would ever receive from them and that they wanted to do it now so that would have certain opportunities they didn't (graduate school, opportunity to enter the housing market etc). They also had what I believe to be a fair argument that inheriting money from them when they die in 30 years time wouldnt do us much good as we would already be financially well off.
For the most part, since recieving this news in 2018, Ive tried to largely operate as though this money hasnt existed. Ive worked hard to bolster my own savings, and by the time I turn 30 in roughly 1 year from now, I will have saved $100k of my own money and Little S will have saved $50k (she will only be 27). I have withdrawn $5k to help me pay for graduate school, and $10k to purchase the Delica. So I have roughly $185k remaining.
The thing that is challenging is that this money has only really been "earmarked" for each of us. Right now it sits in a larger pot of family money of that roughly larger $5 million dollars. My step dad (who I have a tenious relationship with at best) has always cited that the fund does better with all the money in one pot, and cites large amounts of capital gains and income tax every time money is withdrawn from the fund. Ive looked into it, and he isn't necessarily wrong that they incur capital gains tax every time they have to sell an asset and liquidate it to provide us with cash, and they do pay income tax when withdrawing it from say an RRSP.
It's very much fair to say though that this dynamic is increasingly the point of frustration in an already tenuous relationship with step dad. It feels to me at least mildly patronizing and paternalistic that every time I want access to these funds for money that is meant to be "mine" I have to chase after him for it and it normally takes longer than I would like. I would also describe stepdad as cheap versus frugal and one of the reasons why our relationship is so tenuous is he always seems so damn transactional. So in the spirit of this tenuous relationship and that the current system didn't seem to be working for either party, I proposed the initiation of transferring the funds into my name.
The agreement we came to in the fall between my mom and step dad was that we would fill the rest of my taxable accounts (RRSP & TFSA) with the roughly $65k of room remaining in the next couple of months and transfer the additional $120k over the next couple of years as more room in the taxable accounts become available. The idea behind this was it would decrease capital gains and the income tax they paid to withdraw funds, and also allow me to tax shelter the assets.
Little S and I (when we were already thinking of buying a house) decided we would pencil in $20k for the CRV from the inlaws, and spend the remaining $45k on a house down payment sometime between now and the spring, knowing we would supplement the remaining $$ to fund a downpayment beyond that $45k.
In the last couple of days, I have been emailing back and forth with stepdad (he has the communication skills of a 6-year-old). His idea was for me to open tax-sheltered accounts through the big bank they use and get hooked up with their investment advisor. I humored him and took the meeting with the investment advisor. Needless to say, investing with him was a fool's errand, he charges a 3% fee for starters and he seemed generally to not have a good value investing strategy (among other things). Step dad expressed disappoint with me not choosing to work with his investment advisor as he thought it would be the easiest way to transfer funds over.
I ended up just giving him a wire transfer form for him to transfer large amounts of cash for a small fee. He is set to deposit $20k in the next couple of days which I will be sticking in a savings account (4.5% promo rate) and we will use that cash towards a CRV.
In my last email to him, I tried to clearly spell out an summarize our fall conversation on what we had discussed about the gradual transferring of money over time. Step dad came back basically citing that his portfolio through his investment advisor is down well over 20% and he is very anxious about their short-term financial health. He went on to say that he will basically transfer the money when it makes sense for them to do so and was reluctant to give me a timeline.
I found this incredibly frustrating, its meant to be money for each of us, and it's meant to be a gift. His reluctance to provide a timeline isn't super compatible with us trying to buy a house in the next few months. We could do it ourselves and then just get that money back later whenever it works for him to transfer it, but I feel really annoyed by this dynamic of having to use him as some sort of a "broker".
At this point, I feel so frustrated Little S and I are ready to just go back to doing it ourselves and pretending like this money didn't exist in the first place. Its been notoriously difficult to access and it seems to be eroding the personal relationship I have with both my mom and my step dad, which I care much more about than this money issue.
I'm feeling unsure about where to go from here, I feel like I have communicated clearly what we discussed, and provided rationale and explanation for WHY we need the money when we need it (house and CRV) and it feels like he responded with some version of "ill do it when its convenient for me". It's incredibly vexatious. What would you do in this situation? Is there something I am missing?
