Suggestions on providing different $ gifts to sons

[jpjr]

We have two sons, both very responsible and who are doing the right things regarding saving and employee matching etc...they actually said they would like to emulate us and retire early by living below their means and investing wisely.

Five years ago we helped our oldest son during a very messy divorce which required us to shell out > $100k which represented a significant hit to our limited funds. With our help he was able to retain majority custody and final say on important decisions for our grandson, so for us it was money well spent.

Youngest son earns less than oldest son and is selling his current home as they are expecting a new addition to his family of three. We are contemplating gifting some $ to youngest son to assist in his move ($20k-$30k).

I am sure the $100k was not a subject of conversation between the two men, but they are close and I anticipate that the gift to son #2 would be shared between the two.

How would you handle this?

 

[natetheb]

529s for all three/soon to be three grand kids. I don't know if I agree with helping fund the sale of the house. The reason is the divorce issues weren't exactly a choice for your oldest while the sale of a house for your youngest is.

 

[Aerides]

I am sure the $100k was not a subject of conversation between the two men, but they are close and I anticipate that the gift to son #2 would be shared between the two.

How would you handle this?

Proceed as planned, and just have an answer ready if either one of them questions you about this later. I would assume they have already talked (if it were me and my sis we would), and will continue to talk. So saying anything like "don't tell your brother" to either #1 or #2 will only add to that, along the lines of "yeah... dad asked me not to say anything"...

If son #1 says "hey dad how come you only gave #2 $30k" You can say of course this is a different situation, your number was driven by the specific need, and it was challenging for us all

If son #2 says "hey dad how come you only gave me $30k when you gave #1 $100k", same thing

If you notice any obvious tension from either of them without them asking you, pull them aside and ask what's going on, prepared to say something like "I hope this isn't about silly money" if they won't fess up, and go from there.

 

[audreyh1]

I have a situation where one sibling (heir) can really use a substantial gift of $. We decided we will gift all three siblings the same amount in the near term, even if it’s not at exactly the same time. I discovered that I felt very strongly about this.

 

[dirtbiker]

We have two sons, both very responsible and who are doing the right things regarding saving and employee matching etc...they actually said they would like to emulate us and retire early by living below their means and investing wisely.

Five years ago we helped our oldest son during a very messy divorce which required us to shell out > $100k which represented a significant hit to our limited funds. With our help he was able to retain majority custody and final say on important decisions for our grandson, so for us it was money well spent.

Youngest son earns less than oldest son and is selling his current home as they are expecting a new addition to his family of three. We are contemplating gifting some $ to youngest son to assist in his move ($20k-$30k).

I am sure the $100k was not a subject of conversation between the two men, but they are close and I anticipate that the gift to son #2 would be shared between the two.

How would you handle this?

Is your youngest son able to make the move without the money? Personally I would only gift the money if he is able to make the move independently, and only gift it as a surprise after he has made the purchase/started the process. The reason I say this is because if you give him a substantial sum of money, he may be tempted to move into a bigger more expensive house than he can realistically afford, and he could be worse off financially because of it. That would be my biggest concern.

I would not be as concerned with the difference in gifts, as they were the result of vastly different circumstances. And you should definitely not feel compelled to give more money than you're comfortable with to son number two to make it even.

 

[donheff]

I gifted son #1 $100K for a down payment 10 years ago. I gifted about the same amount to daughter#2 this year for the same purpose. If either of them was way under the other we would have balanced things out in our wills.

If you are concerned about balance why not explain the situation to both. #1 got $100K because it was essential at the time. #2 is getting $30K now because that is what we can afford now but he will get a $70K catchup in our estate assuming there is one.

 

[Taxman59]

A long time ago (it was a different life when I was w*****g), a client complained to me that his parents weren't being fair when they planned on giving a piece of property to their daughter (3 sons, 1 daughter). I pointed out that equal, fair and equitable are all different. One son got a car and $$ for his apartment right out of college so he could take his dream job in Texas. Years later, a second son was given $$ to get through rehab and get on his feet. The complaining son (by far the most successful of the 4) got $$ to help buy his business after he dropped (flunked) out of college. The $$s were different for each child, but the money was given at the time it was most needed. This was the equitable. Annual giving was equal.
What you give to one child should not depend on what you gave to another, but on what is needed and available. Over time, the gifts can be adjusted to be more equitable (DS#1 may not need money, so give a bit more to his children for their college, whereas DS#2 may need more money for housing in a better school district).

 

[aja8888]

I would not be as concerned with the difference in gifts, as they were the result of vastly different circumstances. And you should definitely not feel compelled to give more money than you're comfortable with to son number two to make it even.

^^^^ the above is my thinking also. If son #2 mentions the difference, just tell him it's situational and if he needs similar help in the future, you will do all you can to help.

 

[jollystomper]

From my view, more depends on the relationship between your sons than anything else. My parents at various time gifted my siblings different, smaller amounts, but we did not care. None of us "kept score". They said when we sold their house after their deaths, they wanted my sisters to get twice the amount my brothers and I would get, and that was fine with us. Since we are close as siblings that sort of thing was never an issue.

Among DW's siblings it is much different. There is much jealousy and certain siblings have not talked to each other for years over this type of thing. When her mother passes we know there is going to be a big explosion over her estate, and we are just going to walk away from it.

So I am not as concerned about you gifting them different amounts, or what you choose to gift them for, as to whether or not they are the type to "keep score" and have resentment brew over this.

 

[ERD50]

....
If you are concerned about balance why not explain the situation to both. #1 got $100K because it was essential at the time. #2 is getting $30K now because that is what we can afford now but he will get a $70K catchup in our estate assuming there is one.

Problematic. As you say "if there is one". And when? $70K sometime in the future is not the same as $70K now. Inflation, opportunity cost. Maybe #2 could put that money to use in ways you are not familiar with.

I am a strong believer in equal amounts at equal times. Equal is equal. Everything else is subjective.

-ERD50

 

[donheff]

Problematic. As you say "if there is one". And when? $70K sometime in the future is not the same as $70K now. Inflation, opportunity cost. Maybe #2 could put that money to use in ways you are not familiar with.

I am a strong believer in equal amounts at equal times. Equal is equal. Everything else is subjective.

-ERD50

Sure, I agree with "even Steven" treatment as well. But the OP indicated the critical nature of the first gift and the constraints on cash now. I think you can try to balance things in the future as best you can. I absolutely agree that balance is important but how it is achieved can have flexibility. In my case, for example, DS was trying to bridge a purchase for a new house while still holding the mortgage on his existing house so we loaned him $100K. Later we decided to forgive that loan and knew we would want to balance that with DD later. We didn't feel that we should immediately liquidate $100K and put it in DD's account then. The same thing goes for weddings. If you have two daughters I would hope you would be equally generous in funding their weddings but you wouldn't just send the cash to DD2 when you funded DD1's wedding.

 

[Gumby]

From my view, more depends on the relationship between your sons than anything else....

Personalities can play a huge role in a decision like this. My now deceased parents helped both my brother and sister financially when they were younger, although in much smaller amounts than mentioned by the OP. I easily have been the wealthiest one in the family since the day I graduated from college, so I never needed it. In fact, I have helped all of them financially at one time or another.

I know that, as between my brother and sister, my brother keeps score, as I have heard him mention the assistance my sister got (which was greater) from both my parents and me. If I had ever gotten anything at all from my parents, it would be so much worse.

 

[Mdlerth]

In reality, unicorns fart butterflies, not rainbows

If I lived in a fairyland of unicorns farting rainbows, I'd tell you that the sons won't compare notes, there won't be any hurt feelings, and whatever you decide to do with your own money is nobody else's beeswax.

Sadly, I don't live in that magical world. Notes will be compared, and feelings will be damaged. Reality is hard.

But it's nonetheless true that what you do with your own money isn't any concern of either son. You should dispense your gifts as you see fit, according to your own motivations and reasoning.

Now, having just pointed out that your generosity is nobody's business - including mine! - I'll share an anecdote illustrating the only crucial caveat:
My parents poured money on my 2 sisters, to the tune of 40-50k per year for something like 15-20 years. Both sisters were constantly bouncing from crisis to crisis, and M&D were suckers for a sob story. Similar pattern with my older brother, although his demands were less frequent. I asked for nothing and got nothing. Now guess which of us is going to retire comfortably?

Having seen the dependency my parents created in their daughters, I am loath to repeat that with my own offspring. It's a precarious balance trying to build your children into resilient, self-sufficient adults while still having their backs when they need an occasional helping hand. Consider carefully and then go ahead.

 

[Sunset]

OP - Only 5 years ago it was a stretch for you to spend $100K.

How about you change your Will (you do have one right ?), to give your house to son #2. Or if it's worth a lot, make it 2/3 for #2 and 1/3 for #1.

I do like the earlier suggestion of the 529's.

Note: child #2 might undergo a divorce as well, what then?

 

[target2019]

We have two sons, both very responsible and who are doing the right things regarding saving and employee matching etc...they actually said they would like to emulate us and retire early by living below their means and investing wisely.

Five years ago we helped our oldest son during a very messy divorce which required us to shell out > $100k which represented a significant hit to our limited funds. With our help he was able to retain majority custody and final say on important decisions for our grandson, so for us it was money well spent.

Youngest son earns less than oldest son and is selling his current home as they are expecting a new addition to his family of three. We are contemplating gifting some $ to youngest son to assist in his move ($20k-$30k).

I am sure the $100k was not a subject of conversation between the two men, but they are close and I anticipate that the gift to son #2 would be shared between the two.

How would you handle this?

I would help #2 just as I helped #1. After gifting 30K to #2, I'd continue with smaller gifts each year until things were reasonably balanced in my mind.

 

[Philliefan33]

I know that my parents have financially helped my brother and his children more than me and my children, but he has needed it more than me. As far as I know, all of the finacial help they gave my brother was to benefit the kids, and why would I begrudge my niece & nephew essentials like clothes and medicine? (Yes, things got that bad for my brother).

If we were struggling I might feel differently, but my rationale is that my parents can spend their money how they want. I'm a bit old to cry "but that's not fair!"

That said, we do try to be equitable towards our DD's. They each got their BS paid for by us. I'm not sure that the dollar amounts were the same, but they each went to a desired school and came out without debt.

DD1 spent only $12K on her wedding, we topped it off up to $20K with a gift. We spent $30K on DD2's wedding, and a few months later gifted DD1 & her husband $10K to even things out. They were surprised but very appreciative.

In your case, I'd gift what's needed to the second son now and try to even things up eventually.

 

[sallie50th]

Distribution to Heirs?

I am new here, have a related problem, & I might be on the wrong thread. If so, please redirect me.
I have 21 descendants, 1/3 of them are great-grandchildren. Each of my grown children (who are all near retirement, all doing well - some better than others) has a different number of children & grandchildren. My quandary: if anything is leftover when I die, what is the most equitable distribution? My most recent decision (?) is to distribute evenly to the original children and grandchildren, regardless of comparative need, & count on them to distribute some to the greats.
I have found no useful literature on the subject, except for King Lear. Please share your educated guesses.

Aloha,
GG

 

[jpjr]

Thank you all for taking the time to offer your perspectives on this subject. Since this is not an emergency decision, we will take our time to assess some of the options provided and let you all know how it comes out.

 

[The Cosmic Avenger]

I am new here, have a related problem, & I might be on the wrong thread. If so, please redirect me.
I have 21 descendants, 1/3 of them are great-grandchildren. Each of my grown children (who are all near retirement, all doing well - some better than others) has a different number of children & grandchildren. My quandary: if anything is leftover when I die, what is the most equitable distribution? My most recent decision (?) is to distribute evenly to the original children and grandchildren, regardless of comparative need, & count on them to distribute some to the greats.
I have found no useful literature on the subject, except for King Lear. Please share your educated guesses.

Aloha,
GG

My family always distributed any inheritance directly (and equally, of course) to the children only. Usually by that time the adult children were paying for college, or helping their children (the estate's grandchildren) with college or a house or a wedding, and it was assumed that by helping the adult children the grandchildren would eventually benefit. Often one-time cash gifts were given to the grandchildren at the time of the inheritance, regardless of need or life milestones.

But then, we are a family with a lot of only children, with two being by far the next most common number of children, so inheritances are usually less messy. Threads like this make me happy to be an only child

 

[albireo13]

Do they have any student loan debt left?
How about paying off their student loan debt as a gift?

 

[jpjr]

Do they have any student loan debt left?
How about paying off their student loan debt as a gift?

My DIL may still have some student loan debt. Any funds we may provide would be without strings, so they could choose to do what ever makes sense to them.

 

[pacergal]

I am new here, have a related problem, & I might be on the wrong thread. If so, please redirect me.
I have 21 descendants, 1/3 of them are great-grandchildren. Each of my grown children (who are all near retirement, all doing well - some better than others) has a different number of children & grandchildren. My quandary: if anything is leftover when I die, what is the most equitable distribution? My most recent decision (?) is to distribute evenly to the original children and grandchildren, regardless of comparative need, & count on them to distribute some to the greats.
I have found no useful literature on the subject, except for King Lear. Please share your educated guesses.

Aloha,
GG

I would distribute equally only to your own children. They can then distribute to their kids as they wish.

 

[pacergal]

OP--
I am one to advocate equal treatment. Whether you do it all at once, or equal things up in your will.

 

[Scrapr]

My family always distributed any inheritance directly (and equally, of course) to the children only. Usually by that time the adult children were paying for college, or helping their children (the estate's grandchildren) with college or a house or a wedding, and it was assumed that by helping the adult children the grandchildren would eventually benefit. Often one-time cash gifts were given to the grandchildren at the time of the inheritance, regardless of need or life milestones.

But then, we are a family with a lot of only children, with two being by far the next most common number of children, so inheritances are usually less messy. Threads like this make me happy to be an only child

This is the way it's been for us. I'm working with our only child to stress the legacy part of the inheritance. The pile o cash was not all our doing. And it needs to be treated with respect and passed on to the next generations. Of course he is still young & finding his way. So may or may not resonate.

 

[kimcdougc]

Our son made a comment one time that he never got a new car like we purchased for our daughter. He didn't get his college paid for. My comments to him were, we couldn't afford a new car for you (kids are 8 years apart), you didn't want to go to college. But we paid for you to live in our condo for a 13 months when you didn't make enough to make ends meet. When you got fired from your job, we came over and helped you move back in with us for a year and a half. You didn't pay rent, we paid off your car when you were out of work for that year and a half. When all added up it equaled out.

Our will is such everything is split 50/50. No grandkids so... If there are any issues after our passing they are instructed to sell and split 50/50.

He hasn't said anything since and is actually finally doing very well!