SD's father made that money, not you.  SD's mother decided what to do with that money.  Sorry, you want your kids to have money, go make some more.  Personally, I would be more concerned about my kids becoming good people rather than rich people, because money definitely doesn't make you happy or a better person.

I agree with the above poster.  That money was earned by SD's father for his daughter, not for your kids.  Sometimes in blended families, things aren't fair.  In my own marriage, my first husband's family is very wealthy.  My two oldest Bios have trust funds and will inherit some money.  My two youngest bios with my current DH will not have the same benefits, as my current DH's family is not well off.  My DH and I treat all the kids fairly under our own roof, but it isn't always going to be equal. 

She is protecting her daughters assets from a stepfather who IS trying to steal it.  It’s not bad optics. What you are considering is theft.

As posters note above, if you want to leave a large inheritance for your kids, that’s up to you.  But taking this young lady’s inheritance for your children would be 100% wrong.

Love how you are calling him the sperm donor as if dying makes him a deadbeat or something. Lol

Your wife was right to protect that money from greedy future stepparents, because she found one. 

"everyone around her urged her to tie as much of it up as possible so a future "stepparent" can't "steal it"

And you are in the process of proving them right.

Thank goodness your wife had enough sense to listen to the people who knew that there would be gold diggers in her future.

steal and protect in quotes?  That is exactly what is going on, you would take the money if you could.

Why did you have 3 kids if you could not support them?   Were you expecting your wife's first DH's money to support all of you? 

Hopefully if you coerce your wife to sue, the court will protect your stepdaughter's money.

Your own kids can live at home and go to community college and work summers.  if you are low income, they will get aid.   Your SD's assets will not prevent them from getting aid.

 but XH and I collectively saved more money for college than BM and DH. There is no reason to give the skids some to make it equal. If the skids came into money from BMs side of the family that would be their money, the same as DS and his side. It may not feel fair but it is fair. 

You need to alter your thinking. First, unless your SD's dad had abandoned her for her first 6 months, he's her "father" or "daddy," not her "sperm donor."  Second, not that her father "earning" the money is all that relevant, but he DID earn it - he paid for it with his life.  Seems like a pretty big price to pay. Also, although you act like her father and consider yourself her father, you're not. She DID suffer a big loss, whether it's apparent day to day or not.

So instead of worrying that SD has more than your 3 bios, be happy that you don't have to worry about paying for her college - hers being taken care of means that you and your wife can devote all your resources to the other 3. Her SS payments help to enable your other 3 children to have a SAHM.  Don't refer to your SD as a millionaire princess who will never need to work. If she's being raised properly, she will not behave like a "princess" and she'll have a good work ethic.  I doubt you married your wife for SD's trust fund, so just forget about it.  If you don't have enough money for the other kids, your wife should get a job when they're all in school (or before that if she can outearn daycare costs).  It won't kill a kid to have a job or attend community college for a couple years. 

Not everything in life is fair or equal. Back off of the trust fund - trying to break her trust (or even thinking about it) if you don't need the money to support her day to day is a bad look.  And most trusts have provisions for meeting a child's daily needs and give discretion to the trustee. Look into that if there's a problem in your ability to support her currently.

Am I wrong here?

You are absolutely wrong, here.

put that money in trust funds for that sd as she was the only bio child. Its not the bio mums money to spend freely on any subsequent kids from subsequent relationships or marriages who are not of this expartner of hers.

this is no different to divorce and subsequent relationships where one parent is financially better off and half siblings would benefit more, thats the nature of humans and people of different ethnicities and socio economic backgrounds

i’m from australia which is financially better off than hubbys asian country where exwife and all 3 skids were born, raised and most likely live the rest of their life. My bio kids stand to inherit more money from my country, skids will not. They can bitch and so can hubbys exwife about it but they can’t do anything about it... my kids will have a better and higher quality of living. 

If skids are left penniless by their bio mum because she manipulated them and spent their money and inheritance on shopping sprees, my bio kids should not cop the blame nor should my kids cop the blame for why skids live a more difficult life

i think its horrible that your bio kids are likely gonna be taught to resent eldest half sibling of theirs 

Out of curiosity, is this SD's dad part of the occult, and is your home owned by SD? I feel like I've read this before...

TBH, I am wondering if the wife might have thought of having more of the money from her husband's death settlement set aside for her own use since she was going to be a SAHM for her child...  I am not saying that the OP is entitled to dip into it himself.. but I do see a bit of logic behind his WIFE being able to direct how these funds would be distributed.. and that it might be ok if she wanted to help her other bio kids with some college expenses etc...

Obviously, one of the main reasons that this family is not more prepared to send the other 3 kids to school etc.. is that his wife was a SAHM... she didn't work.. so obviously, the bulk of support of the family fell on OP.  Not saying that he didn't know this going into the situation.. and that he "chose" to have 3 kids knowing his ability to fund things like college were going to be limited.. but I can see how he might think that his wife could have had some of these funds under her control.. to compensate for her not working as feeding into the household budget.

But.. for whatever reason.. OP's wife set things up so that even SHE can't access the funds.  Honestly, that was a bit short sighted on her part.. what if she had a life threatening illness and needed funds for recovery.. what if she were not married.. and couldn't work etc.. I don't believe that the money in this settlement was originally meant to ONLY go to this daughter.. but was to go to his WIFE and DAUGHTER.. but wife decided to sequester a large portion of it. 

Unfortunately, in hindsight.. maybe she is realizing she could have had more control over it.

I don't know 1000% what the answer should be.. I can see both sides.. this money wasn't meant to be taken for kids that weren't the bio of the man that died... but I can see how they could have been at the disposal of the WIFE.. and SHE could have chosen to spend them on subsequent kids.

In the end.. despite the fact that OP raised the girl as his own.. they really don't have too much choice than to proceed as was intended by OP's wife when she set up the money the way she did.

Perhaps, if OP and his wife want to talk to the daughter.. and ask HER how she would feel about helping her siblings..?  It really is something that she would have the say over.

This is your SD's money paid to her through the death of her biofather.

You may see yourself as Dad, and she may see you as Dad, but her lineage does not start with you. She has a whole paternal line, with paternal family, that you can't erase. She may be yours in your heart, but she is someone else's biologically. With that comes with benefits and consequences of that lineage. 

The benefit she gets is money. The consequence is that she lost her BF. That shouldn't be taken lightly. All because she doesn't remember him doesn't mean that there isn't a part of her that misses him, or is curious about him, or wonders what he was like. Biology shouldn't be discounted.

Your SD is different from your bio kids, who are different from the sibling who was adopted out. YOU can treat them all the same and provide them with the same resources. Your wife can do the same. Your SD's BF, even post-mortem, had the opportunity to provide all he could at the cost of his life. Your adopted child will have wildly different opportunities than their siblings despite their lineage.

Your family, even if you adopt SD, will not be 100% yours. SD has other family and opportunities that yours will never have because of her paternal side, and that paternal side has no obligation to you and yours (or to your wife, whose connection to them was severed upon his death). If You were to do for your adopted child, they would be in the same boat as SD in receiving something that their sibling(s) would never get.

Now, here is where I think your wife is effing up. That money is meant to support SD. That means, if you all are struggling, some of those funds can and should be used for half of SD's care (the other half coming from income from your wife). SD requires food, shelter, clothes, and other items that require money. It IS unfair for your kids to go without when there are funds that can support SD's care. Your wife should NOT depend on you to care for SD when that is precisely what SD's money is for.

So, I would propose to your wife that some of SD's funds be used now for her expenses so that you can provide more for your biological kids. SD is not your financial responsibility, and there are means by which her care can be covered. I'm sure an extra $500/mo added to your home to cover SD's food, clothes, and extracurriculars would even things out with your own kids. It's foolish to not use a few hundred thousand dollars to support SD's care until adulthood. But what is used should be reasonable - and I'd use a CS calculator to determine what is "fair" based on what her dad earned prior to his death.

Remember, fair doesn't mean equal. It's fair for SD's trust to be used for her living expenses now. It doesn't mean that she'll come out equal to your kids because she isn't 100% your kid like they are. There is a middle ground here that makes things fair even if the outcome isn't equal (and the outcome can and never will be equal).

Part of the issue is that your wife is counting her daughter's SS as HER own income.. and financial contribution. 

The reality is that your wife is providing funds to the home that do likely cover her daughter's share of household expenses.. but there is also the matter of her other three children and her own needs.. it seems you are left on the hook for all of that.

I do agree with LD that perhaps when your SD's needs dictate.. her trust should be paying in.  But I have a feeling that the ss really does cover most of that.

The problem I see is that I am thinking the money that was left was not given by the settlement TO your SD.. this was what your wife did .. I think the money was given to the deceased's FAMILY..and was intended to support your wife as well as her daughter due to the loss of the head of household.  Unfortunately, when she set up that trust.. she removed funds from her own control.. and I'm not sure that was the smartest way to go about things because your wife is not earning any income now.. and has produced 3 more kids..

I can see the validity in the argument that the mother should have kept some of that money to help with raising SD.

I see none in the argument that all of the OP's kids, and the OP, should share in it. 

So....you want your kids to be able to benefit from another child's inheritance........?

Dude if my husband told me to put money aside for his kid like I do my own, I'd laugh in his face. If my husband asked me to split my benefits 4 ways rather than 3, I'd again, laugh in is face. 

Will my ss's mother put money aside for MY kids? No? Hmmm.

It's sd's money. Not yours, not your wife's, not the other kids.

I'm not really sure why you think you're entitled just because you're there. You sound like the kind of guy who would go sniffing around to a relative who won the lottery to share because you're faaaaamily.

You want your kids to have money for college etc? Put some aside. This girl owes you nothing.

exwife has not worked in 25 years, cleared out hubbies private savings during the divorce (stole it and kept solely for herself), she is sitting on close to a million dollars and hasn’t spent that on their 3 kids. She has played the poor victim.

my husband has 2 kids with me and can’t trust that his eldest 3 would even as adults have my 2 kids (their half siblings interests at heart) as their mum controls and manipulates them thanks to her narcissm and pas. 

So my husband has transferred some assets overseas to my country as his eldest 3 are well provided for (have a free home to live in for life that he bought for them). 

You can’t ever count on existing kids or new kids and exspouses etc to be understanding, civil and have other childrens interests at heart. Right now whilst my kids are toddlers i am back at university studying to finish my degree. If my husband were to die now or next couple of years whilst my kids are minors under 10 yrs old, hubbys exwife and wldezt 3 would do their best to clear out his assets to exclude us. My husband addressed this by having his life insurance allocated to me to care for our 2 kids to high school which his eldest 3 would most likely be adults then.

op your thinking is so twisted