You seem like a great husband, especially financially. I would not have taken on responsibility for her student debt, helping pay is great but being stuck with it...well it's done now. Regarding your son's education, if he was already attending the posh school, and you could afford it, again that's fine. It sounds like your wife is resentful, but if you never met, she would have been happy with her kids' school. The money saved by you and your late wife should be used for your son's college or gifted to him after adulthood. It probably should have been in a custodial account. No worries though, you should be able to prove it is a pre-marial asset; keep it in its original / separate account, do not comingle it with your marial funds. Your wife squandered her money and financial future and now wants to do the same to your son. I would not bring it up, but if she does, explain firmly and kindly that you have helped her a lot with her debts, but that this money was set aside for your son, before you knew her, and that it will be spent for that purpose. Keep at least one separate personal account too, and I would record a will ensuring your son gets up to half of your assets upon death, or whatever is aligned with the law.

Your wife has no claim to the money that you and your late wife saved for your son's future, and it's not your son's fault that she failed to do the same for her daughters. Use the money to send your son to college, she will need to sort out loans for her daughters' education.

I bet if there was enough money for all three to go to college, she wouldn't be humming this tune of "he needs to make his own way in life," she'd be thrilled that you were willing to pay for all of them.

Honestly, she sounds quite selfish - willing to allow you to pay HER debts (which was not your responsibility), then wanting to get her hands on money you and your late wife specifically put aside for your child.

Financial issues are one of the main reasons that people get divorced, and she sounds like she hasn't learned one thing about being more financially responsible.

By the way, many people on here feel that parents should NOT pay for a kid's college - but my parents paid for mine, and it was huge gift. In this day and age of ridiculous tuition and high student loan debt, it's an even bigger gift to him.  As long as he works hard in school and you can afford to pay it - do it.

Sounds like she was looking for a meal ticket.

She thinks that learning to pay his own way would teach him a valuable life lesson? So he should do without the money that was set aside for him because she wants that money to cover the things that she should have paid for herself years ago? Um, nope. Ask her what lessons she learned along the way.

I cannot see how she could justify using that money for anything other than it's original purpose. If need be, tell her that it would be completely disrespectful to your late wife's wishes to even consider using that money for anything other than your son's education. 

Sheesh! Talk about entitlement - not only has she unloaded her (unnecessarily incurred) debt onto you but now she wants to fleece your son? Do not stand for this.

Your wife has the attitude "what's yours is mine, and what's mine's me own".   She is being grasping and greedy and has no right to the money you and your late wife saved for the specific purpose of your son's education.  Tell her to sling her hook, is my advice. 

Let me tell you a quick story about my first DH.  He was a wonderful man who died too young of a congenital heart defect.  His mother died in an accident when he was a teenager and her sizeable estate all went to his father per the terms of her will with the expectation, which was not enforceable by law as the money became his alone rather than being in a trust, that he then pass it to their children.  When his father remarried a younger woman everyone was happy as he had been much older than the mother and not doing well alone.  But when he died only a few years later happiness turned to shock when it turned out that the will had been changed to leave the entire estate - including the mother's money - to the new wife and the young child that they had together despite his advanced age. 

My DH loved his father and understood him leaving HIS money to his wife and young child but never got over the fact that he gave them his mother's estate.  How will your son feel if you give this fund, which his mother intended to secure his future, to your new wife for her use?  I believe that he will see it as a betrayal of his mother and a squandering of her intended legacy to him.

She says he should earn his own way in life, that it would teach him a valuable lesson in life

Haha! She wasn't singing that tune about paying off all of HER and her late husband's debts by herself, was she? I think that would have been a good life lesson for her, but as a loving husband, you've helped her out along the way.

 But now my wife tells me that she is not comfortable with me spending all that money on his college, when she is still paying for her debt after all these years

She has absolutely NO say what you do with your son's college fund. It was money saved by yourself and your late wife, before your current wife was in the picture. It has absolutely NOTHING to do with HER or her debt.

I suppose she expects to live off of the retirement that YOU have saved, as well, since she's not saving for herself?

This would be a hill for me to die on and I would not back down. People really show their true colors when it comes to money. Especially, other people's money.

All such great advice and points!!

First welcome to the site!!!  I would like to add on to a few of the great comments posted above!!

First I agree this money and decision was set aside long before you even knew this woman would ever be in your life.  You should follow through with your plan no matter what for many reasons but also because first, your late wife and you planned this together and saved and I can't imagine it would feel to good for you and her memory to go against it especially since it is not your idea to change it.  Second it may cause some very serious problems between you and your son and damage your relationship.  The way I see it unfortunately, there is no good choice with no one getting mad.  Go with your gut and what you want to do.  Your wife will either get over it or she won't.  

If you are to have another conversation as I am sure you will, I might add a few things.  First explain that your prior lives and relationships were very different.  She and her girls had vacations and some of the finer things while you and your wife saved for the future.  You couldn't and wouldn't take away their life and their past, just like she should not interfere with your past plan now coming to fruition.  Your plan just took longer.  She was for the minute with her first husband and you and your first wife were for the future.  

Second I would next explain that, no judgment but because she and her girls had lived a different lifestyle that you had to help them out with money that could have been used for all 3 to go to school.  Since you did have to do that and basically you used what could of been school money for her girls, to pay her student loans and get her house out of foreclosure t would not be fair to give them more and not give to your son when they already got their share which was a gift not entitlement.    It would make the shares very unevenly balanced if you gave more.  

Good luck!!  You are very kind and giving!!

"She says he should earn his own way in life, that it would teach him a valuable lesson in life"

I sort of agree with that statement from your wife. Only it should be applied to her first if she wants to apply it to anyone else. Her earning her own way in life means she had a choice between holidays and savings. She chose holidays. The lesson now is that there is no money saved aside for college. If she wants to talk about making things even between the kids, well your son was "deprived" of holidays growing up because you were saving for his future.

Think of it in terms of cakes. Let's call the money for holidays or college "cake". She fed the cake to her girls early. You're giving your son his cake later. Her girls shouldn't be entitled to a slice of your son's cake because they have none left. 

Honestly, this would make me very concerned I was being used for money...and you have done so much already! Ugh! 

You should pay very close attention to what she says and does. Is she working now? If you stay married and divorce later, is it a possibility you may have to pay alimony? 

I've seen this type of question posted in other parenting/step forums and the answers from non-steps is always "what would be fair is to split the money between all the children equally." My guess is that answer comes from remarried bio mom's...

No, that's not fair. Life isn't fair. Especially step life. Your wife wants to use that money to pay off her debt, including student loan debt? How is that fair? I would ask her why she thinks she deserves to have your late wife pay for her school but not for her own son's? In what world is that fair or right? 

I would hold my ground on this one. Giving her that money is a betrayal to your son and late wife. Your current wife is going to keep asking for your money until you say no. You have to create a limit or she will feel entitled to everything. My guess is she isn't used to hearing "no" from you, right? 

I would consider putting the money into an account with you and your son's name on it, or adding your son's name to the account. This is his only hope for an inheritance and help from his parents, don't take away his college money.

Agree with everyone, but also think it's a mistake that you're the only one saving for retirement right now. If you two get divorced, any debt you two co-mingled with be half yours to pay down, and any money you saved (such as your retirement) while married will become half hers.

She's getting a VERY sweet deal right now without any of the financial risk. You need to start making moves to protect your finances independent of how it affects your marriage. That sounds harsh, but you wouldn't be the first (or the last) to have a spouse take them to the cleaners because the couple was unevenly "yoked" financially.

I would move the funds you have set aside for your son into a trust or account that she doesn't have access to if that hasn't already happened. Then, I'd look at splitting your finances again. It's not a good sign that your wife, who is a mother and widow herself, would rather take money away from a child that his dead parent earned and saved for him versus pulling herself up to do better especially since she has gotten immense help to get her finances on track.

How do you handle this as a couple? I'd say counseling and drawing a very firm line in the sand of what is and isn't okay with you financially. Unless she's paying an unfair amount of household expenses, or you're expecting her to live in such a way where she'll never be able to get ahead and provide similar for her own kids, then she needs to just buck-up and figure out how to deal with her own financial issues.

Your situation is why I am a huge fan of prenuptials when people have previous assets. They force you to talk about these issues and deal with them before you marry.

The funds in that account are for your son. DW should not get one penny of that account. If you haven't done so, be sure the account is titled such that it is for your son and your son only.

There may be no way to handle this without hurting your marriage. Your wife is being unreasonable and selfish. She wants your son's college money to pay the debt she accumulated before your marriage. 

You and your first wife saved that money for your son's education. That is where it should be spent.

Postnup asap! Your deceased wife must be rolling in her grave to see how all her sacrifice for her sons education is being squandered by your new wife and stepdaughters.  Your son can help fund his education by applying for scholarships and financial aid. He can also do work study if if makes sense for his program.  The fact is that none of that is your wife's money. It's not hers to pay her education debts it's for your son.  Wifey needs to get a second job to pay her debts rather than siphon off your deceased wife's hard work.  

The two of you can have mingled accounts when it comes to household expenses but you need to protect yourself financially and look out for your sons future.  

Money from your late wife DS mother goes to his college education.  DW goes out and gets a job and payed her own way. Makes her a better person 

Ok, as a parent, i would not be in a relationship that lowered the standard of living for my kids. If your son was in a private school and doing well, and had a college fund, do not lower his living standard due to this relationship.

Explain that to your wife. Your son's education will not change due to your marriage. Now, as far as your wife is concerned, if you truly have helped her out financially, it should have helped her situation as far as providing for her daughters' education. They should be better off with you than without you. Are there ways you can explain to your wife that that is the case now and will be in the future? If so, the situation is more than fair. 

Welcome to ST.

Based on what you wrote, your wife reminds me of 'one of those'.

What I mean is, HER kids and her kids future are before your kids. IF you pay for your boys college, you may not be able to do the same for her kids.

Listen, I was never one of those parents who believed parents should pay for college.  Us boomers paid for our own college. It was the generation after booners that started this I will give my kids everrrrry-thinnnnnggggg my parents didnt give me.  You know everyone gets a trophy generation? I watched it unfold right before my eyes.

NO JOKE

If you want to pay for your bio's  college--go ahead.  Stop talking about and just do it. YOU are not morally obligated or legally obligated to pay for her kids college.

Any advice on how to handle this situation without hurting my marriage would be greatly appreciated

I guess you have to accept the fact that it may hurt your marriage, if in fact, she is that selfish and wants that money for herself or her kids.

I would tell her one more time, what that money is for, what it has always been for, and that that is exactly what you are going to do with it. You don't have to justify, explain further, or argue your case (or give her kids the same). No ultimatums, just this is what is going to happen.

She can accept it or not. You should not be bullied into giving up what you have built for your son.

And, now that you know exactly where she stands, I hope you take the advice to protect any inheritance that you want your son to have should something happen to you.

ETA: And to protect yourself, as well.

Of course you should shut your wife down on this immediately - the money should be used for your son's education, as intended.  If your wife continues to go on about it, or indications are that the marriage is being affected, I would ask her point blank if she married you for your money, and let her know that it certainly would appear so based on the way she's behaving.

Sadly some SMs give us all bad name. They want skids out on their own at 18, want dads not help with education and pretty much want skids stop existing yet surely they don't act like this towards their biokids. I'd divorce my DH if he acted like you wife. Shameful 

I worked hard and saved and sacrificed for many years way before I met my DH. If he told me that money I saved supposed to be his and his kids' I'd absolutely divorce him. OP already helped his wife with paying her debt  but she now wants more. She now wants money put aside for OPs kid college way before she even knew him.

if she wants him to save for old age, then she'd not ask of him to pay her debt off  and she'd be better financially and took care of herself, got a second job if need to. She is NOT entitled to his money saved prior to them getting married 

this is not 1800. Women could work and save and don't rely on men. Yes this marriage might fail. And it might be for the best. I'd not want to have a greedy spouse. No crime in divorcing a greedy hag and staying single 

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Ugh. She hit the jackpot. 

I am usually Mr. the marriage comes before any kids regardless of kid biology.  However, you and your deceased wife were diligent in saving and managing your debt.  You saved for your son's college.  Your new wife gets no say in how that money is spent.  If she and her X did not save for their daughters' college educations then that is on them.

It would have been better for all involved if you had chosen a mate who had similar financial/savings perspectives as you have.  Too late now.

This is just going to have to be one of those things that  you both agree to disagree about or.... split the blanket and find someone more suited to be your equity life partner.

Both my wife and I are prioritize education people.  I am fortunate that my parents were able and willing to heavily participate in my university education.  I was on the 11yr undergrad plan due to changing majors regularly and transferring between several colleges and universities.  My parents funded the first two years and helped significantly during the last two years. I funded the middle 7 years out of my own pocket.  I am eternally appreciative of their help.  I did graduate with $10K in school loan debt for the last 1.5 years due to just wanting to get it done by then.  We paid that off within 3 years of graduation.  My DW had great VA survivor benefits from her BioDad who was killed in a vehicle accident while on active duty with the US Army.  Most of her undergraduate and graduate degrees were paid for by those benefits though we did take out a ton of school loans about 2wks before she finished her MBA to top off our available cash after I lost my job in the semiconductor bubble implosion of the early 00s.  

Since we were both in either undergrad or grad school for the first 9 years of our marriage we worked together to make those educational goals happen and we have worked together to knock out debt when it has been accrued.

In your case.... I think that it is imperative for your DW to have to pay off her own school debt and for you to use the funds that you and your first wife saved for your son's college education for the purpose it was intended.

When your SDs start college, there may be opportunity for you and  your DW to help them though I would not allow your DW to guilt  you into anything if she has not gotten her own school debt retired and gained some clarity on her own crappy financial performance.

All IMHO of course.

Good luck. You in all likelihood are going to need it.

"while my stepdaughters are old enough to understand that these gifts come from my son's family, it's just not nice that he apparently receives so much more than them, you know? So instead of buying gifts for my son, I deposit the money into the college account."

Your poor son.  I can't imagine how he feels that his dad doesn't buy him gifts.  Yes, I get that his extended family spoil him but can you imagine how it feels for him to see his dad buying gifts for his stepsisters but not for him.

Does he know that you deposit money in his college fund rather than getting him a gift? Does he know that his mother's family also contribute to the fund.  If he does, think about he would feel to find out that the college fund and all of his birthday/christmas presents had been repurposed for your wife and her children.  This may not be how you see it but I'd be hugely surprised if your son didn't see this as you rejecting him for your new family.