Giving While Living?

[Midpack]

I’m reading Die With Zero ***, as noted in another thread, and it brought me to this topic. We are not spending at a high enough rate, and I’ve always thought it was dumb to hold on to all the $ we can and then divvy up what’s left when we both go poof among my sister, our nieces & nephews (all on DW’s side) and our favorite charities. We don’t have kids ourselves. We’d like to give some now while they can use it, instead of waiting until we’re all older and it’ll most likely be a windfall to nieces & nephews.

So how do you give to nieces and nephews in a productive manner? We don’t want their parents (DW’s brother and sisters) to object or feel insulted. And we don’t want the nieces and nephews to come to expect our ongoing help. We don’t want to buy their affection either, we just want to help them make their way in the world while they’re still young adults. Trying to put ourselves in their shoes, if DW and I had received a substantial $ gift(s) from family when we were young adults, we’d probably have been suspicious and/or confused to be honest. Giving to charities while we’re alive is easy enough, but it doesn’t seem easy with family.

I’m sure some here have grappled with the question and come to some answers, but I don’t remember a thread on it.

*** It’s not a bad book, but any long time reader here will have heard all the ideas in the book many times. And it talks about people who save too much, and don’t spend enough - there may be quite a few here, but they’re few and far between in the general population.

 

[audreyh1]

Our heirs are siblings. We gift to them routinely. We don’t gift to nephews as only one sibling has children and they are still very young.

We prefer to gift while living as we can.

Charities too.

 

[Car-Guy]

We still give to a few charities but only minimal amounts and to a select few... Personal reasons that I don't want to discuss/debate on this forum.

Some years ago we updated our wills and the DD will now get our entire estate when we pass on... We have been gifting her the max amounts allowed w/o needing to report each year. (This year is an exception so we will file 709) Logic for the annual gifts, she needs it now and we don't and she's going to get it all anyway albeit in 10 to 20 years. (give or take )

Once she gets it all, she can decide to do the same for her kids, who should be adults by then.

 

[Souschef]

Aside from gifts to our 4 children, and tuition aid to our grandchildren, we use QCD's to donate to local charities that we support.

 

[audreyh1]

Logic for the annual gifts, she needs it now and we don't and she's going to get it all anyway albeit in 10 to 20 years. (give or take )

Once she gets it all, she can decide to do the same for her kids, who should be adults by then.

Logic for us is that we are way better off than siblings and they are getting older too and can really use it now. They are younger, but not by that much.

 

[FlaGator]

My compliments on looking ahead, to see how you can help, and for being in a position to make a difference for them.

Consider matching their earnings in a Roth IRA up to the limit. Recognizes/rewards their work and effort to be independent (though not quick gratification), and relieves some pressure to save for the future. With the Roth, they can use the money for a home purchase or other significant life expense. You can also use it as an opportunity to help educate them on the value of thrift and patience with investments. I have told my kids the Roth gifts stop as soon as they pull money out for common expenses like a car.

Another idea is to fund 529s for their kids, if/when they have them. Another opportunity to relieve financial pressure for young adults with kids. If contributed when young, modest amounts grow into substantial sums in 15-20 years.

 

[RetireeRobert]

...., we use QCD's to donate to local charities that we support.

Bravo, yes. I love the QCD's, allowable up to $100,000 from IRAs.

Get to make significant impacts to charities with out losing any of the dollars coming out to income taxes. Also keeps one in a lower tax bracket, since the QCDs are not includible in gross taxable income like normal IRA withdrawals would be.

I love QCDs!

 

[ivinsfan]

Logic for us is that we are way better off than siblings and they are getting older too and can really use it now. They are younger, but not by that much.

Is there any awkwardness at all because of your generous gifts? Do you feel the family dynamics have changed? It seems different then a parent child gifting situation. A lot of sibs never even discuss money.

 

[audreyh1]

No, we’ve been doing this for a long time so it’s been accepted. I don’t think it’s changed family dynamics. There are never strings attached.

 

[tb001]

My compliments on looking ahead, to see how you can help, and for being in a position to make a difference for them.

Consider matching their earnings in a Roth IRA up to the limit. Recognizes/rewards their work and effort to be independent (though not quick gratification), and relieves some pressure to save for the future. With the Roth, they can use the money for a home purchase or other significant life expense. You can also use it as an opportunity to help educate them on the value of thrift and patience with investments. I have told my kids the Roth gifts stop as soon as they pull money out for common expenses like a car.

Another idea is to fund 529s for their kids, if/when they have them. Another opportunity to relieve financial pressure for young adults with kids. If contributed when young, modest amounts grow into substantial sums in 15-20 years.

These are great ideas.

I’ve been on the other side of generous gifting, when my step father and mother helped me with my first home and some extra expenses while in grad school. We were lucky and it appreciated significantly enough that I could return the gifts and still have some left for a down payment on my next home. My step father considered it an investment in me, which was a novel thing to me at the time.

My advice is to have a gift tied to a tangible, lasting thing. 529 plan or a Roth, grad school, down payment on a house, children’s education etc. I know money is fungible, but I personally feel like the gift is more meaningful when it’s tied to something like this.

 

[bingybear]

this is a issue for us. It looks like our kids won't have kids of their own. We have no siblings that are still alive.

I have some cousins, but have had little little contact and the cousins are all older than me.

So where do I start? second cousins that I've never met?

 

[GreenEggs]

this is a issue for us. It looks like our kids won't have kids of their own. We have no siblings that are still alive.

I have some cousins, but have had little little contact and the cousins are all older than me.

So where do I start? second cousins that I've never met?

Being related isn't a requirement for gifting. You are free to give to anyone you chose to. There are plenty of people good people in need. Most people work hard, yet never seem to get ahead. It feels good to help folks who been dealt a tough hand. Many of us forget how hard life can be for a lot of people.

 

[Lewis Clark]

this is a issue for us. It looks like our kids won't have kids of their own. We have no siblings that are still alive.

I have some cousins, but have had little little contact and the cousins are all older than me.

So where do I start? second cousins that I've never met?

Nobody can tell you what is the best choice for you. Personally, I would not be interested in leaving anything to relatives I've never met, or relatives I have had little contact with, or relatives I dislike.

Plenty of charities or other organizations could benefit from anything you care to leave them. For example, in no particular order:
* If you enjoy going to live plays, the theaters and performing arts centers always need money.
* If you like going to symphony orchestra concerts, the orchestras always need money.
* Colleges you attended - either to the institution itself or their scholarship fund
* Colleges near where you live
* Your local school district
* Museums
* Libraries
* Your religious organization
* Look for lists of local, national or international charities. Lots of them exist and you can probably find a few charities whose missions you support.
* Close friends
* Since COVID, our local newspaper has been asking for donations
* National, state and local park systems always need money. Consider donating specific amenities (benches, picnic tables, water fountains, shelters, and so on) or cash for whatever they need.
* If you like using local or regional recreation trails, those organizations always need funds for maintenance and expansion.
* Donate to support Fire Calc and this online community
* Think of activities you enjoy doing, and then think of how you can support those activities.

Good luck!

 

[Philliefan33]

Being related isn't a requirement for gifting. You are free to give to anyone you chose to. There are plenty of people good people in need. Most people work hard, yet never seem to get ahead. It feels good to help folks who been dealt a tough hand. Many of us forget how hard life can be for a lot of people.

I can think of a number of ways to implement this. Let’s assume you have $10,000 per year to gift:

1. Contribute to local, small charities. $10K to your local food bank would help a lot of people. A large donation to a women’s shelter could help a mother leave an abusive situation and establish her own, safe home.

2. Work with your local school to establish a fund to pay for extracurricular activities for poor kids who cannot play because the parents cannot pay. Pay to rent instruments so more students can take music lessons.

3. Give large amounts to local fundraising efforts. Volunteer fire departments, Go Fund Me, Girl Scout cookies, etc.

My thought is that a few thousand dollars given to small / local efforts has a bigger impact than a few thousand dollars given to large charities.

 

[EastWest Gal]

These are all wonderful ideas.

There are several organizations which enable you to donate musical instruments to students. This is one of them:

https://hungryformusic.org/

Every local band, orchestra, theater group would be happy to accept small donations. One of the bands I'm in received $5000/year for 10 years from an anonymous donor. When the donor died, he left $50K in his will. The band has been in existence for 176 years. It was gifted a band hall 75 years ago and shortly thereafter the town commissioners granted a permanent waiver from paying property tax.

Many of these local organizations have budgets from $2000-25000/annually, so a little goes a very long way.

Paying to rent instruments? All instrument rentals are set up for rent to own, at $30-50/month.

True story:

Demarre McGill, prinicipal flutist for the Seattle Symphony, got his start playing the flute when he was scrounging in his parents' closet for pocket change and found a flute purchased for $75 by mail order for his dad from mail order, an instrument his dad never played. Until he started at the Curtis Institute of Music, he used that flute.

 

[FANOFJESUS]

I’m reading Die With Zero ***, as noted in another thread, and it brought me to this topic. We are not spending at a high enough rate, and I’ve always thought it was dumb to hold on to all the $ we can and then divvy up what’s left when we both go poof among my sister, our (all on DW’s side) and our favorite charities. We don’t have kids ourselves. We’d like to give some now while they can use it, instead of waiting until we’re all older and it’ll most likely be a windfall to nieces & nephews.

So how do you give to nieces and nephews in a productive manner? We don’t want their parents (DW’s brother and sisters) to object or feel insulted. And we don’t want the nieces and nephews to come to expect our ongoing help. We don’t want to buy their affection either, we just want to help them make their way in the world while they’re still young adults. Trying to put ourselves in their shoes, if DW and I had received a substantial $ gift(s) from family when we were young adults, we’d probably have been suspicious and/or confused to be honest. Giving to charities while we’re alive is easy enough, but it doesn’t seem easy with family.

I’m sure some here have grappled with the question and come to some answers, but I don’t remember a thread on it.

*** It’s not a bad book, but any long time reader here will have heard all the ideas in the book many times. And it talks about people who save too much, and don’t spend enough - there may be quite a few here, but they’re few and far between in the general population.

If I was in your shoes I would offer to send nieces & nephews to a religious school I support. Giving something in the physical and spiritual.

 

[bingybear]

Nobody can tell you what is the best choice for you. Personally, I would not be interested in leaving anything to relatives I've never met, or relatives I have had little contact with, or relatives I dislike.

Plenty of charities or other organizations could benefit from anything you care to leave them. For example, in no particular order:
* If you enjoy going to live plays, the theaters and performing arts centers always need money.
* If you like going to symphony orchestra concerts, the orchestras always need money.
* Colleges you attended - either to the institution itself or their scholarship fund
* Colleges near where you live
* Your local school district
* Museums
* Libraries
* Your religious organization
* Look for lists of local, national or international charities. Lots of them exist and you can probably find a few charities whose missions you support.
* Close friends
* Since COVID, our local newspaper has been asking for donations
* National, state and local park systems always need money. Consider donating specific amenities (benches, picnic tables, water fountains, shelters, and so on) or cash for whatever they need.
* If you like using local or regional recreation trails, those organizations always need funds for maintenance and expansion.
* Donate to support Fire Calc and this online community
* Think of activities you enjoy doing, and then think of how you can support those activities.

Good luck!

I do fund and gift with a DAF so I'm familiar with them. I prefer to gift in kind to individuals if if they are in a low bracket. But most I want help are not use to selling ETFs and the tax filing. The other issue is that the recipient may not know how to handle money. I've seen people get a good chunk of money and blow it with little to show for it.... just a short party.

 

[aaronc879]

My advice is to have a gift tied to a tangible, lasting thing. 529 plan or a Roth, grad school, down payment on a house, children’s education etc. I know money is fungible, but I personally feel like the gift is more meaningful when it’s tied to something like this.

I agree with this. Add in car replacement if they are currently driving an old/unsafe vehicle. Maybe plan a significant family vacation if the young adults family can get off work and foot the entire bill. Maybe even make it an annual thing.

 

[unclemick]

DINKs. DW and I give to a list of charities, church, and I sponsor 529's for four children of the son(known since age 10) of a friend of 30 years - the son disabled from a meat packing accident and his Mother went in her 50's with an asthma type attack.

Heh heh heh - Also thinking The Farm will go to a conservation type setup (? Chestnuts?) but this has not gelled yet as to structural set up. Mr Market and being really really cheap in early years of ER and a certain spending style has resulted in the current extra pad.

 

[GreenEggs]

I worry about large scheduled gifting spoiling the recipient(s), possibly robbing their motivation and the sense of pride that comes from achieving important things on their own. Especially when the recipients are young and have little life experience.

Random, unexpected, or one-time gifts would help avoid the likelihood of the recipient, or their partners, feeling that there'll eventually be a bailout coming if they get into a bit too much debt, or decide to coast through life for a while.

 

[Midpack]

I worry about large scheduled gifting spoiling the recipient(s), possibly robbing their motivation and the sense of pride that comes from achieving important things on their own. Especially when the recipients are young and have little life experience.

Random, unexpected, or one-time gifts would help avoid the likelihood of the recipient, or their partners, feeling that there'll eventually be a bailout coming if they get into a bit too much debt, or decide to coast through life for a while.

Yes, we were thinking about out of the blue gifts now for nieces & nephews and telling them it was a one time thing but with no expectations on what they do with it. Even though we might do it again. But I don't want to give them on a scheduled basis where they expect it. My other worry is how their parents will react, appreciative? Insulted? See it as meddling on our part? DW has 4 siblings, so the reaction will probably vary as well. We could ask them, but we don't want them to control how we gift...

 

[Lewis Clark]

Yes, we were thinking about out of the blue gifts now for nieces & nephews and telling them it was a one time thing but with no expectations on what they do with it. Even though we might do it again. But I don't want to give them on a scheduled basis where they expect it. My other worry is how their parents will react, appreciative? Insulted? See it as meddling on our part? DW has 4 siblings, so the reaction will probably vary as well. We could ask them, but we don't want them to control how we gift...

If the nieces and nephews are still minors - under 18 years old - I'd clear it with their parents before giving a substantial gift.

Once they are legally adults, I'd probably tell the parents before sending the gifts.

Agree with the idea of random, one-time gifts so the receivers don't start expecting them.

 

[Midpack]

If the nieces and nephews are still minors - under 18 years old - I'd clear it with their parents before giving a substantial gift.

Once they are legally adults, I'd probably tell the parents before sending the gifts.

Agree with the idea of random, one-time gifts so the receivers don't start expecting them.

One is 19, but the rest are out of college from 23-40, but a good suggestion.

 

[GreenEggs]

Yes, we were thinking about out of the blue gifts now for nieces & nephews and telling them it was a one time thing but with no expectations on what they do with it. Even though we might do it again. But I don't want to give them on a scheduled basis where they expect it. My other worry is how their parents will react, appreciative? Insulted? See it as meddling on our part? DW has 4 siblings, so the reaction will probably vary as well. We could ask them, but we don't want them to control how we gift...

Also, being "fair" can present problems when gifting. The recipients' ages and dispositions play into the situation. $X can be an appropriate and wonderful helping hand to your niece who is 25 recently married and a CPA that graduated with honors, but the same gift can turn her 20-year-old younger brother into a video game expert that sleeps until 2 pm. So, how can you help one without harming the other and remain "fair"?

If you make it age, or marriage, or achievement dependent is it "fair", would it work or even help prevent the concerns? Will any stipulations just turn you into "the bad guy"?

Multiply the above by the number of recipients & it just compounds the issue. Your best intentions will likely have a variety of outcomes, mostly good, but some perhaps not so good.

I know that I said random or one-time gifts might be best, but perhaps it would be wise, to begin with smaller gifts first to gain a bit of insight into how gifts will be received. There's a big difference between $500-1000 and a larger $10K-$30K gift.

Someone above mentioned family trips as gifts. I think that's a wonderful way to give and bond with your family & extended family. We didn't have the type of family that did that, but I've always been envious of those that do.

 

[jollystomper]

DW and I have 25 nieces and nephews on both sides. With that size crew they all better not depend on us .

But seriously, we give good gifts when they achieve major milestones (e.g. graduations, marriage). We will thrown in random gifts depending on the situation. E.g. some were impacted during the pandemic in terms of employment, we gifted some of them a couple of months rent (it was not asked for, we knew of the situation and wanted to help).

Those with kids are are well off and in stable situations. They have asked if we choose to give monetary/material gifts, a contribution to our grand-nieces and grand-nephews 529 plans would be fine. So that is what we do. Random amounts, they appreciate any of it.

On my side of the family, our nieces and nephews (along with our kids) have noticed how "independent" and career/financially stable my siblings and I are, how we rarely get each other gifts but have very good relationships, and there has been almost no financial "drama" across the family units. They do not assume or expect gifts, so any amount at any time is welcome.

ON DW's side, while in the past her siblings portrayed us as the "cheap" ones, several of our nieces and nephews have observed that we are the only one of their aunts and uncles who have remained married and with no drama, and seem to prefer our advice more than our gifts, in terms of recognizing that long term advice will benefit them more than gifts.

It has crossed our mind, if our assets continue to outpace our spending, doing additional gifting to them, but as has been mentioned before it will be random/situational in nature.