Having money to help the kids

[Time2]

Quote:

Originally Posted by RunningBum Check on this for yourself, but I think if you were to pay the tuition directly it wouldn't count towards the gift amount. I'm not sure of that. What I do know is that you can gift $15K to both your daughter and husband, and so can your wife, so you could gift them $60K. The $30K may be all you want to gift them, but I'm just pointing out there are options to give more, if you're so inclined.

That is exactly what we are doing. The tuition is just under $60k a year with tools putting it just over $60k. I found I could not take the deductions and credits for the tuition payments, so we gift to them and they get the deduction and credit.

[jkern]

I have one daughter, turning 30 this week. Her mother and I have helped her financially in a few areas.

1) We paid for college.

2) After college, she saved and had money for 10% down payment on a condo. We helped her with an additional 10%.

3) Recently, she saved almost 20% down for a SFH (keeping her condo as a rental). Houses are quite expensive and she could only get a slightly fixer upper. We helped her with about 50% of the cost to repair/remodel her house.

4) She just got engaged and her mother and I will pay for the wedding.

Overall she has gotten an excellent boost from her parents. She has a great job as a Financial Manger Data Analytics at Cisco. A house, rental condo and no debt outside of mortgages.

[flyingaway]

Quote:

Originally Posted by jkern I have one daughter, turning 30 this week. Her mother and I have helped her financially in a few areas. 1) We paid for college. 2) After college, she saved and had money for 10% down payment on a condo. We helped her with an additional 10%. 3) Recently, she saved almost 20% down for a SFH (keeping her condo as a rental). Houses are quite expensive and she could only get a slightly fixer upper. We helped her with about 50% of the cost to repair/remodel her house. 4) She just got engaged and her mother and I will pay for the wedding. Overall she has gotten an excellent boost from her parents. She has a great job as a Financial Manger Data Analytics at Cisco. A house, rental condo and no debt outside of mortgages.

Wow, a Financial Manager Data Analytics at Cisco still needs financial help from parents. I did not expect that. This comment is about Cisco, not about your daughter.

[flyingaway]

Quote:

Originally Posted by RetiredHappy My son has a disability that makes it extremely challenging for employment. I paid for his home and also funded a taxable investment account. In addition, I gift money to him each year to ensure his expenses are covered. He is well educated with a couple of Bachelor degrees. We hope he gets steady employment soon, and I am always there for him.

I might be in a similar situation. I don't know what will happen if we are gone earlier than expected, for example, in a serious accident on travel.

[lakerunner]

Something else to think about: My father had always supported my younger sister (even through her 50's) and my nieces and nephews. (Their mother, my older sister passed about 5 years ago.). My father made it clear to me and through his will/trusts that he felt he had helped out both my sisters and their children enough during his life, that he was leaving most of his assets to me. Although all of these grandkids are in their 20s and 30s, they were very surprised that they were not receiving more from his estate.

[Major Tom]

I only have one kid, and she's furry. She gets all the food and treats she wants. There is no chance that she will ever move out of the house, get a job, and begin supporting herself

My parents supported me through University, which wasn't a burden in the UK in the 80's. I believe the higher education finance system there has become less socialized since I left but back then, if you were accepted by a University for a first degree, you received full support for tuition, accommodation, books and food. I think there were some upper income limits for parents but, as I remember, most students in middle-class families qualified to receive this aid. If you were careful, there was a little left over for beer and fun too. When I went home between semesters, my parents gave me full room and board. I would occasionally get a job in the summer for extra fun money. After graduation, I came back home, whereupon my father looked at me, and said, "I know you don't need me to tell you this, but you're on your own now." Several others who I told this story to thought that was a bit harsh, but I didn't think so. I was in my early 20's and very keen to get out into the big outside world and support myself. My Dad's words were very welcome, because they fitted my plans exactly. He did have a lump sum set aside to give to me when I married, but that never happened.

Mum and Dad led a comfortable middle-class existence, but wouldn't have had anything left over to help their grown kids financially. We all made our own ways. On moving to the US, I noticed that parents seemed to give their kids a lot more stuff. A good example of this is cars. In the UK (in the 70's and 80's at least), only a few kids would get their own cars as soon as they were legal to drive. Of the few in my class who did, they were always older used vehicles. Not necessarily beaters, but quite close sometimes! On moving to Los Angeles in 1986, I noticed that it seemed to be part of the culture that parents bought their kids their first car. Lots of teenagers had their own cars - and they were often really nice ones. I remember my manager, a Scottish feller, commenting that a lot of his 18 year-old employees had nicer cars than he did!

I come from the tradition that parents give their kids room and board until they have finished their education. After that, they are expected to provide for themselves. Times have certainly changed. There seems to be a lot more spare money flying around nowadays. The contrast I noticed could also be due to socioeconomic/regional differences too. After all, I did move from a small English village directly to Los Angeles.

[armor99]

Quote:

Originally Posted by Time2 The question how much financial help to give kids has been discussed before, with many opinions given on the subject. I recently helped my kids but expect 100% to be paid back. It starts with one of my kids and spouse trying to buy an FHA Repo, no problem qualifying, but then problem after problem creating delay after delay, to the point, 6 months had elapsed. After reading about how MMM made an impulse home purchase, I looked into his method, at about the 4 month time frame, just in case I had to help with the purchase. Following his write up, I did the following. I opened an Interactive Brokers account and moved my Taxable account of Vangaurd mutual funds there. I don't want to sell and incur the tax hit. The account has Margin use available. I can margin up to 50% of my balance. I went 39%. More on that later*. I recently wired their homes purchase price to my bank. Then I had a mortgage written between them and me. I wired the money to the title company. They have the house I have a mortgage. The plan is for them to complete all repairs and make it ready for a traditional mortgage. I expect them to get a new mortgage within one year, I had the contract written for two years just in case. The interest rate for the margin loan is 1.35%. *If the market had a flash crash, causing my margin to go above the 50%, IBKR would sell some of my mutual funds to bring it back to 50%. I don't want that to happen. As a precaution, I opened a home equity loan against my house, I will transfer $100,000 into my IBKR account bringing my margin loan down to about 33%. The Home equity loan is only 0.99% for the first 6 months. I wrote the mortgage at 4% for the first year an 6% for the second, I hope that 6% is a big incentive for them to get the house mortgage ready. I thought this might help others if they have funds they don't want to sell, but would like to make use of the money. More details on MMM blog.

I would think that your children owing you money would have a high potential to alter your relationship with them in a negative way.

[Teacher Terry]

Retired Happy, your son should check into the services offered by Vocational Rehabilitation. Depending on your state it’s either called the department or bureau of VR. It’s a state/federal program that helps people with disabilities become employed. They have relationships with employers and help with job placement and identifying a appropriate vocational goal based on the disability, education, vocational interests, aptitude’s, etc. It’s usually free unless he makes a lot of money. I spent 20 years working with clients.

[1242Vintage]

We paid a ton of money to get our kids through university so they could start off their careers with minimal student debt. Barring and medical emergencies or unforeseen circumstances that’s the end of our financial gift to the kids.

Our youngest is currently in the middle of an unforeseen situation and we are helping her with a few dollars. She just moved and the moving company disappeared with her furniture and household goods. Since she hasn’t started her new job we gifted her funds to replace everything.

I advised her to watch storage Locker auctions for her items, but she didn’t think that was very funny!

[MarieIG]

Well, to each their own.

I did pay for undergrad and - had one of the kiddos gotten into dental school and was otherwise responsible, I would have paid for that.

I have gifted the kiddos from time to time (i.e. getting the Roths started, weddings, and babies and such). Room and board was always available which allowed certain kiddos to save towards their retirement and down payments.

I would not co-sign a mortgage and would not take out a loan to assist a kiddo buy a house. I would not hold a mortgage on a kiddo. If I were to contribute to buying a house, that would be as a gift. Kiddo who bought a house recently surprised us with the big down payment which he saved (as he was able to do so by virtue of living at home).

YMMV

[RetiredHappy]

Quote:

Originally Posted by Teacher Terry Retired Happy, your son should check into the services offered by Vocational Rehabilitation. Depending on your state it’s either called the department or bureau of VR. It’s a state/federal program that helps people with disabilities become employed. They have relationships with employers and help with job placement and identifying a appropriate vocational goal based on the disability, education, vocational interests, aptitude’s, etc. It’s usually free unless he makes a lot of money. I spent 20 years working with clients.

Thank you, Teacher Terry. My son has high functioning autism spectrum disorder and probably does not fall under vocational rehab. I will certainly look into it.

[tmm99]

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Originally Posted by RetiredHappy Thank you, Teacher Terry. My son has high functioning autism spectrum disorder and probably does not fall under vocational rehab. I will certainly look into it.

Do you have access to 60 Minutes? The last week's episode had a segment on major companies actively hiring people with autism for their special aptitude. Not sure if watching the segment will lead to anything, but I thought it might give you some ideas. I found the link to the segment here.

https://www.cbsnews.com/video/autism...-2020-10-04/#x

[Chuckanut]

Quote:

Originally Posted by RetiredHappy My son has a disability that makes it extremely challenging for employment. I paid for his home and also funded a taxable investment account. In addition, I gift money to him each year to ensure his expenses are covered. He is well educated with a couple of Bachelor degrees. We hope he gets steady employment soon, and I am always there for him.

I am curious. Have you ever considered an ABLE account for the child with a disability. It's sort of like a college saving account, but the money can be used to help support the child as he/she grows older and the parents are gone.

https://www.ablenrc.org/what-is-able...-able-acounts/

Quote:

These include costs related to raising a child with significant disabilities or a working-age adult with disabilities, accessible housing and transportation, personal assistance services, assistive technology and health care not covered by insurance, Medicaid or Medicare. For the first time, eligible individuals and their families will be allowed to establish ABLE savings accounts that will largely not affect their eligibility for SSI, Medicaid and means-tested programs such as FAFSA, HUD and SNAP/food stamp benefits.

[RetiredHappy]

Quote:

Originally Posted by tmm99 Do you have access to 60 Minutes? The last week's episode had a segment on major companies actively hiring people with autism for their special apptitude. Not sure if watching the segment will lead to anything, but I thought it might give you some ideas. I found the link to the segment here. https://www.cbsnews.com/video/autism...-2020-10-04/#x

Thank you for sharing. I just watched it and forwarded it on to my son.

[RetiredHappy]

Quote:

Originally Posted by Chuckanut I am curious. Have you ever considered an ABLE account for the child with a disability. It's sort of like a college saving account, but the money can be used to help support the child as he/she grows older and the parents are gone. https://www.ablenrc.org/what-is-able...-able-acounts/

He is not on any public assistance programs or welfare. It is my full intention to leave him with enough money so that he will not require public assistance. ABLE account is unlikely to be applicable in this case.

[Koolau]

I can't think under what circumstances we would borrow money to help our kids. We don't lend to them either. IF we think they need assistance (with for instance a down payment on a house or with school loans) we will gift them money (and have several times.) BUT only if we have the money.

A wise person once said that you can't borrow money for retirement (well, I suppose a reverse mortgage might qualify) so let your kids do the borrowing and you help out where you can. YMMV

[Teacher Terry]

Retired Happy, yes that disability does qualify him for services. That diagnosis used to be called Asperger’s. I have helped clients with that disability. Hopefully your state is not under order of selection which basically means they serve the most disabled first and there’s a waiting list for others. That situation is fairly rare and hopefully not the case.

[daylatedollarshort]

We paid for our kids costs for college not covered by grants and and helped with first cars. They had internships and tutor jobs for spending money in college. We have offered to help with houses when they are ready to buy but for now I think they like the flexibility of renting and moving as needed to where their best career opportunities are. We gift them money as a surprise here and there to help with expenses like medical bills or moving costs, and pick up the tab for family dinners and events, but otherwise they seem to be self supporting and LBYMs on their own.

[Dtail]

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Originally Posted by brett We would never co-sign a loan for anyone.

I did once and it worked out, but not again.

[ERD50]

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Originally Posted by SecondCor521 I doubt I would borrow to fund my kids' wants. I would not view that as "help", and I also would not view that as "having money", as the thread title implies. .... .

But in this case, I think OP is borrowing only to avoid selling and paying cap gains tax. He has the money.

I did a similar thing to buy our home this year - took out a Line Of Credit from my broker, as I wanted to simplify the purchase and pay cash. I'll get a mortgage soon.

-ERD50