So... I'm having an embarrassing first world problem here, and hoped to bounce some ideas around...
First some context for why I'm having trouble thinking this situation through: I'm from a fairly rough background - foster kid, lived in lots of different homes growing up, super-determined to get to university, won full scholarships all the way through to a PhD, was homeless for extended periods twice during my studies - once because my biological mother called up my Uni and convinced them to return to her funds I had stashed with them to cover room and board for the next year, and again because an employer stiffed me out of a substantial amount of pay. I lived for a really long time off around $10K a year, working low-paid NGO jobs, because I wasn't interested in standard of living beyond basic food and shelter.
Then had a disaster of a relationship with a very spendy guy who, by the end, managed to leave me with almost $50K in debt clandestinely taken out in my name. At that point, I took a job I knew I'd hate, but that was both very secure and very highly compensated, paid the debt off in a bit over two years, met my current partner, saved up for maternity leave, ended the maternity leave period with money to spare, and just kept saving, a bit puzzled what to do with the money building up... And found this website when it hit the Washington Post and only then realised it was probably viable for me to leave work earlier than 65... This back history means I'm getting a really late start compared to many around here, but am on track to retiring in 10 years at the latest, making very pessimistic assumptions about my and my partner's future earnings.
Okay, here's the first world problem bit... My partner is not at all spendy (although also not good at monitoring and planning for expenses, so I do that). He is, however, from a much more privileged background, which means I'm now needing to shift from, say, worrying about family who, given a chance, will literally steal my money, to worrying about family offering to just give vast sums.... It's sort of doing my head in...
The immediate issue is a trust set up by a much-loved grandparent who passed away in the 90s. The trust was set up to fund undergraduate degrees for all the grandkids. My partner was the eldest; the youngest has just finished their study. We had some sense that the remaining funds in the trust would, at that point, be divided amongst the grandchildren, but we didn't know how much that would be. Turns out it's quite a bit larger than we would have thought - about £30,000 for each grandchild.
The dilemma here is that we've been asked how we want the funds remitted. Apparently, the trust can remit the funds over ten years, and avoid all capital gains tax; or it can remit them over five years, or three years, with progressively larger capital gains penalties. The problem is, whatever it does, it needs to do for everyone: we can't individually choose different options. We don't need this money, so it makes most sense to us for it to be dispensed to minimise taxes. This isn't the view of the other grandkids, who do have immediate use for the funds. We're planning to get out of the way on this one - it's not as though any of us earned this, so we're not going to get in the way of people who want to claim the funds sooner, at a penalty.
The more unexpected and complicated issue is that, apparently, on the dissolution of this trust, additional inheritances are also being distributed to the parents. I don't believe anyone knew this would happen (I think the funds were held in reserve in case the education trust needed to be topped up), and my partner's parents would like to pass this unexpected money directly to their two children. It sounds like this would amount to something like £45,000 to each child.
Okay, so here's where it gets tricky. My partner's mother is a stickler for giving absolutely identically to her children. So, if we don't accept the money, my partner's sibling won't receive anything either. However, my partner's father is a bit distrustful about whether the kids will put the money to good use, so he's insisting that it only be paid out in the form of a contribution to a mortgage or house purchase.
My partner's sibling is in the UK, has recently purchased a house and is spending huge amounts remodelling it: it will make a big difference to them to receive these funds.
We're in Australia. I haven't ever been able to shake the feeling that it doesn't make sense to buy here. Renting seems a better 'deal'. We do have First Home Saver Accounts, because not having those leaves money on the table (for non-Aussies, there is a government match for funds deposited in these), but we hadn't been sure we would use this until actually retired, or until the market deflated a bit.
Also, we had been trying to keep a reasonable amount of cash in liquid form in case we need to go back to the UK (for those not following UK immigration policy at the moment, it's hard now for non-EU partners to migrate unless they have a bucket of money or the UK partner goes over first to establish a six month employment track record in the UK at a certain income level). Buying a property to live in here, even with such a huge gift, would tie up our liquid cash and make it difficult to pool up money to meet the immigration threshold if we need to...
In addition, my partner has just started a PhD, which will finish in a few years. We had wanted to be open to the possibility of moving at that point, if he receives a decent job offer in another state or overseas. If we buy a property here now, we could end up needing to sell it within four years...
And, finally, my partner's father will likely be retiring in a few years, and we're a bit worried about how they'll go. They are fairly well off, and my partner's mother is very sensible. His father... Not so much... We're not clear how that will play out. If they were just giving us cash, we'd dump it into an investment fund and plan on never touching it until we were certain they wouldn't need it themselves. My partner is actively worried that his mother is keen to pass this money on to the kids to force his dad to slow down spending by running down their funds faster. This makes both of us queasy...
So we're trying to work out what to do. Do we buy an overpriced Australian home that we might need to sell again in a short period of time (they won't put the money toward an investment property - they want it to be a place we'll live, which they can visit)? Do we decline, and possibly piss off both the sibling and the parents?
This isn't the sort of financial planning I was expecting to need to do...