When your 30 something child asks for money- what is response?

[ziggy29]

Quote:

Originally Posted by citrine I am the 34 year old kid....I have to repeatedly tell my parents that I don't need the money that they insist on offering me. Currently, they want to gift my brother and I the max every year.....I tell them to hold onto it and I will ask them when I need it

Yeah -- as mentioned, if there are potential estate tax issues and they are in a very high tax bracket on interest for money they are not likely to ever need, what they want to do is a sound strategy if the money would just be willed to you and your siblings anyway. It is actually a very common estate planning tactic.

In a bizarre way, in terms of estate planning and current income taxes, if they are confident they don't need the money they want to give, you are helping them out by taking it!

[citrine]

I know about the tax stuff....I just feel strange taking it and would probably just drop it into the retirement/mutual funds.

[FUEGO]

Quote:

Originally Posted by citrine I know about the tax stuff....I just feel strange taking it and would probably just drop it into the retirement/mutual funds.

If it would make you feel better, give em a stack of vanguard deposit slips and just let them make the check out to vanguard for IRA or taxable account purchases. That way they know you aren't just wasting it away.

[ERD50]

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Originally Posted by brewer12345 ... Yet we regularly get offers and outright gifts because MIL wishes to be "fair." ... Since I would like to maintain good relations with both of my MILs (FIL remarried), I just try to channel the money toward our kids.

"Equal" is the easiest, clearest and most defensible way to be "fair". Take it or you will put her in an uncomfortable spot, which diminishes the joy she gets out of giving the money.

Channeling to the kids is good (that is probably how she would like you to use it, but maybe she wants you to use it for "splurges"?), and/or put it in a separate account - if MIL has an unfortunate change in circumstances and needs help down the line, use it for that.

-ERD50

[Milton]

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Originally Posted by Rustic23 No one on this board can answer this question for you. It depends on your relationship with your child, your child's financial state, and your financial state. If you child has a solid grip on finance, and you have the $2,000 laying around then maybe so. If you plan on leaving your kids something anyway, why not give it to them when they need it. I would not loan them the money! I loaned DD money and the repayment was never on time. Finally, we told them they did not have to repay it. It would come out of her share of our estate when the time came. It caused more stress on both of us, her knowing she was not paying, and us feeling some how cheated. When we changed it to a gift it seemed different.

I agree with all of the above ... very good advice.

A loan is definitely not the way to go, for so many reasons.

[brewer12345]

Quote:

Originally Posted by ERD50 "Equal" is the easiest, clearest and most defensible way to be "fair". Take it or you will put her in an uncomfortable spot, which diminishes the joy she gets out of giving the money. Channeling to the kids is good (that is probably how she would like you to use it, but maybe she wants you to use it for "splurges"?), and/or put it in a separate account - if MIL has an unfortunate change in circumstances and needs help down the line, use it for that. -ERD50

That is exactly the route we have taken for exactly those reasons.

It is highly unlikely MIL would see a drastic change in circumstances. She has a semi-COLAd pension from a state plan that is more than she can spend every month (she actully recently asked me how to invest the extra $1k/month left over), owns her home free and clear, and has a decent sum in an IRA. She is debt averse and takes my advice on finances. I think she is pretty much set for life.

[Bestwifeever]

My late FIL used to put his adult kids' names as co-owners on CDs (back when the CD rates were sky-high). When the CDs became due he didn't give the proceeds (interest or principal) to the kids, so I'm not sure why he did it--maybe he thought we would be responsible for taxes on the interest? Maybe he thought it would escape inheritance taxes if he passed away before they matured?

Although we would gladly give my two adult kids $2K if they asked for it, they would never ask for it, so that's easy for me to say

[REWahoo]

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Originally Posted by Bestwifeever My late FIL used to put his adult kids' names as co-owners on CDs (back when the CD rates were sky-high). When the CDs became due he didn't give the proceeds (interest or principal) to the kids, so I'm not sure why he did it--

My late FIL did the same thing. His logic was this would allow my DW to gain access to the funds if he became seriously ill and unable to care for himself.

He did - but since he had also given her power of attorney, the CD never became an issue.

[Bestwifeever]

That makes sense, REW--but my MIL was still alive and well and the co-owner of most of their assets (and would later be his caretaker, with POA, etc.), so that made it even harder to figure it out. We chalked it up to just another of Henry's quirky ideas about how to handle money.

Interestingly and possibly related, my SIL convinced them to let her go through their financial affairs and immediately had them put everything into a trust a few years before FIL passed away.

But we never asked or received $$ from them.

[vicente solano]

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Originally Posted by FIREdreamer I have never received a gift on Saint Day!!! I am so jealous. People don't even call on Saint Day anymore... As for the OP, I don't have kids, so take it with a grain of salt, but unless the refi would prevent a foreclosure, I'd probably say no.

Firedreamer, If you tell me the Spanish version of your first name I´ll make a point of PMing you on your Saint Day...

[FIREd]

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Originally Posted by vicente solano Firedreamer, If you tell me the Spanish version of your first name I´ll make a point of PMing you on your Saint Day...

Awesome! My Saint Day is April 25...

[vicente solano]

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Originally Posted by FIREdreamer Awesome! My Saint Day is April 25...

Check!

[RunningBum]

When I was in my 30s, I got a small, short-term loan from my folks, and was grateful for it, as it was a stressful time. I paid it back as soon as I could.

As many have posted, it's an "it depends" answer, based on the situation and the child. But someone in their 30s asking for the first time probably didn't make the request lightly.

For those of you giving the absolute NO answer, prepare for the payback. At some point, maybe when you are less physically able, you may ask, "can you come over and help with <whatever>". The answer may well be "why don't you hire someone with that 2K you wouldn't loan me?" While a loan may cause some awkwardness, turning down a loan can leave a lot harder feelings.

[tryan]

At that age, they should have the means to come up with 2k.

Time for a little "tough love" ... "no" or a loan. But no gift.

[Moemg]

I think there is nothing wrong with gifting your children if you can afford to do so . In my case my daughter will inherit it anyway so why not share a little while I'm alive .

[WhoDaresWins]

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Originally Posted by Moemg I think there is nothing wrong with gifting your children if you can afford to do so . In my case my daughter will inherit it anyway so why not share a little while I'm alive .

I agree completely. My son never asks me for anything but I give him very nice checks for Christmas and also his birthday. I know he is a LBYM type, even more so than I am. I can afford it, and it makes me feel good to know I am helping him along the way.

[simple girl]

Well, this is not a child, but my husband's sister asked for money. We gave it as a loan, but we never were paid back. She has come again for money, but we turned her down..."the well is dry". She doesn't seem to have the same respect for money that we have.

My bro, on the other hand, asked for a small amount of money, and I knew it killed him to do so. He paid it back ASAP, in full. Character. That's what it is all about. I would loan him money again if he asked. I know he would pay it back, and I sure as h*ll know he wouldn't ask unless it was important, and he was pretty desperate.

So, I think you have to look at character. Has your child asked for money before? Do you think it is a big thing for them to be asking? These questions should help you decide what to do.

FYI, I do not have children of my own, but I do love my family members who have asked for help. It is a very difficult situation to be put in.

[brewer12345]

FWIW, I borrowed money from my parents once. We were selling the condo and buying the house. I would be netting twice as much from the condo as I was putting down on the house, but there was about a week timing mismatch between the two deals. So my parents fronted part of the downpayment on the house for a week and were paid back as soon as the sale of the condo closed. No hard feelings among any of the parties as far as I know.

If one of my siblings were in need of cash I wold expect they would go to my parents first, but if that were not an option I would bankroll them on terms. Would do the same for my SILs. But the well would definately run dry after the first default.

[easysurfer]

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Originally Posted by simple girl ... So, I think you have to look at character. Has your child asked for money before? Do you think it is a big thing for them to be asking? These questions should help you decide what to do. ... ... FYI, I do not have children of my own, but I do love my family members who have asked for help. It is a very difficult situation to be put in.

I totally agree, Simple Girl. It really is about character. I've learned that from experience from siblings of my own. Some who are really really greatful and others who "conveniently forget" that they were helped out with a loan.

[beowulf]

There is an old saying (source unknown) "When parents give to their children, the parents cry. When children give to their parents, both cry."

We have probably given far more to our children that we should have, but it never endangered our finances and did make a big difference to them. A large part of this is helping them fund their IRAs as neither one has a job that pays enough to allow them to do both a 401k and an IRA. Our son virtually never asks for money and, when he does, it tends to be for small sums to pay for an urgent car or other repair which are really gifts. Our daughter has been layed off several times, so we have had to help more then we would like.

The question is whether we would be comfortable living with the knowledge that we allowed one of our kids to be tossed onto the street or get into deep financial trouble when it was not a big deal for us to help. This has worked fine as long as we are employed, after we both are retired, they know they are fully on their own. It might be painful for them, but at least they know the limits.

As for the $2,000 - if you are in a position to gift it easily and without and consequences for you, then do it. As another said, it's better to give with a warm hand than a cold one.