Gifting dilemma

[Brat]

My concern is that younger son will not use the money for a down payment on a home. Once the gift has been given you loose control. Maybe structure it as a loan (yes I know mortgagers hate that). Consult with a lawyer to make sure that the $ is your son's in case of divorce. I doubt that older son would object to your loaning his brother money for the purchase of a home. In your will you can cancel all outstanding debts.

Set up 529 accounts for the grandchildren where YOU and your spouse own the account. Fund those accounts as you see fit. You can move $ between beneficiaries.

 

[CaliKid]

It's YOUR money. Hopefully your older kid is smart enough to understand the situation.

 

[Alan]

Why did you ask then?

Because that was the time that DS was moving to England and needed help buying a house. He never asked for help, neither of them ever have but we would rather give them money now while we are still alive.

We have always been a very close family and we never would gift large sums of money to one without telling the other.

 

[ERD50]

.... it has never been an issue. Younger son knows older son's college was much, much more. Never been an issue..... We spent a great deal on his(older son) wedding. ...

So older son has been given more, education and wedding.

Are you sure it's not an issue? Sometimes these things don't pop up until there is some other conflict, then it all bubbles to the surface.

"Fair" can always be debated, "equal" is just arithmetic. I'm in favor of equal. So, if it were me, I'd try to equalize what was spent on the education and wedding, and account for inflation. There, now they are equal. Future gifts, give equal amounts and at roughly the same time, so that inflation or other opportunities aren't missed.

 

[ERD50]

I would split equally. Less brain damage and no one can complain.

Some people will always complain! But as I said in another post, "equal" is a pretty shut and dried case to defend. Not that the giver needs to defend anything, but it makes life simpler - that's what I decided, simple divide by 2. Next question?

But the 'fair' thing never ends, there's always another consideration, what about this, and that, and on and on.

 

[Car-Guy]

Don't punish success, split it equally.

Interesting idea. Wish you'd tell/sell it to Uncle Sam !

 

[anethum]

A close friend of mine has done very well financially. He told me a few years ago that his father told him he would like to leave everything to my friend's sisters who had a much greater financial need. My friend told his dad that he agrees with that, and that he won't be at all hurt by inheriting nothing. The key point is that there was a discussion beforehand, so there will be no feelings hurt nor any surprises. My friend is very close to his dad and to his sisters, so communications were easy.

My own parents had an interesting dilemma. My mom grew up poor and very much believed in giving equally. My parents had wanted to leave a specific bequest to one niece who could use the money, but they didn't want to offend that niece's sister, who is very well off (and who I suspect has been helping to support her sister for a long time). So my parents decided to bequest nothing to either one. My parents told me and my sibling about this. I proposed that after both of my parents die, that my sibling & I gift the intended amount to the poorer niece. My parents liked this idea and my sibling agreed to it, even though he doesn't like either of these cousins.

My parents had revocable trusts and my mom amended her trust after my dad got sick, naming me her Successor Trustee. After my mom died last year, I asked my sibling in an email if he remembered the agreement about the cash gift to one of our cousins. He affirmed that he did, which relieved me.

I am close to both cousins. Before I sent a check to the poor cousin, I called her wealthy sister and explained my parents' thinking and this agreement. I didn't want to her to feel hurt, nor have her find out from her sister. My cousin completely understood my parents' thinking and thanked me for telling her. Both nieces had been very close to my parents despite living far away.

I sent a letter and a check to my other cousin (the amount was within the US gifting threshold), simply saying my parents wanted her to receive this. I didn't mention her sister at all, nor mention this was an agreement my family had. She was thrilled and touched by my parents' thoughtful gift. Everything worked out well, and nobody was hurt thanks to good communications and people honoring their promises.

 

[wrigley]

The biggest factor I'd consider in deciding how to split a gift or inheritance is consideration of care provided by the kids. If one or more children pitch in to help parents as they age, that should be compensated very generously.

Often the children not pitching in to help have some excuse such as living at a distance, busy careers, etc. But there's always something they can do to help and if they choose not to, well, they should understand why the siblings who did received a bigger cut.

It's a formidable task taking on some responsibility for others and it should not go unrecognized.

We can throw a whole bunch of "what ifs" into this equation. There are 4 of us children. I am the oldest. My brother right below me is a very successful wall street executive who is already retired and living very well. The income levels between the 4 of us is astronomically different. Our mother is 85 and in very poor health. Her will is made, and she told all of us what she is leaving is going to be split 4 ways. You are my children, and I love you all equally! We have no problem with her decision.

 

[Koolau]

My parents always helped the child that needed it at the moment. To my knowledge, they never tried to keep "track" of a score between all of us. We got help with our first house. Older sister got help with schooling and expenses during first j*b, younger sister got help with living expenses due to divorce and j*b loss. I told my parents I was glad they treated us differently but fairly. To my knowledge none of us ever resented our parents treatment. We were all born with different gifts, we had different lives, we had different challenges. Our parents tried to smooth our passage into and through adulthood.

DW's parents were the opposite. If they gifted to one child, they gifted to the others. If one needed something, the other also got a gift. It seemed silly to me as we rarely needed anything at the time.

At some point, we may (or may not) even things up. To us, it's a matter of smoothing the long transition from being a kid to being a responsible adult. It seems to have w*rked so far. To us it's not about equality but about meeting immediate needs. I see that I am in the minority here so YMMV.

 

[Texas Proud]

WOW.... 3 pages of responses... did not read them though...

There is no need to be 'fair'.... it is not like either one has been slackers... both have good careers but the salary is way different...

I would just give the one son money to help him with the house purchase... I doubt the other will object, but if he does you can point out that he has been very blessed in his life and gifting money to him means nothing...

 

[badatmath]

I like the giving depending on the situation at the time. Honestly we have never been a family where we spend the exact same at Christmas etc, etc and it has never been an issue. Younger son knows older son's college was much, much more. Never been an issue. I am leaning toward not feeling we need to disclose every gift. BTW older son has two children. We spent a great deal on his wedding. Younger son is not married. This discussion is really helping me see this more clearly!

What makes you think you not disclosing it means other son will not find out? Siblings talk.

 

[CO-guy]

I'm in a similar situation with my MIL. My better-half has two siblings. Both are married and live in the same city as her mom. This gives my MIL more opportunity to see what her siblings may need, and then provide that support. Overwhelmingly, that involves childcare, transporting kids to practices, etc. Sometimes, it involves paying for something. Whenever that happens, all sibs get a check for the same amount. We don't need it, but there's no arguing about receiving it. We usually use some of it on the nieces and nephews.

 

[Teacher Terry]

I don't necessarily agree. If one son has a need today, then he's assisted today. Only time will tell when the other son needs us, so for that reason, I don't split thing evenly at every gifting event. Over a lifetime, things like this tend to balance out.

I totally agree with this. When our kids were younger and starting out we helped on a as needed basis and never kept track or thought it should be even.

When I die one of my 3 sons will only get 10% with the rest split between the other two. One son unfortunately can’t stay off of drugs for longer than a year so I’m not supporting that.

 

[Time2]

We paid $300k for my daughters education, Not much for my sons education. He has a chemistry degree, but probably earns 1/3 of what my daughter does, plus she's married and her husband also has a good income. We have already gifted him $220,000 for a house, and expect another $80,000 so we can to even up. But then, as our final heirs, I'm not sure. I'm pretty sure my daughter is funding a 401k, (fully?) but they have a high income and spending to match with new $50k and $80k autos, a boat and no qualms about buying stuff! My son is fully funding his Roth 401k and is miserly. I have no idea where my daughters net worth will be in 10 years, and I'm confident my son will be doing fine*. So, do I still give equal to the 4 or 5 times higher earning wasteful ones (in my eyes only) not their's or have a differential? Inquiring minds want to know.

*Unless he finds a spendthrift girl, But I have warned him to keep his 401k and mutual funds his secret, not anyone else's business. He also has hinted a prenup might be in his future.

 

[sengsational]

I might be inclined to do the long term summation (education delta, wedding) and the current distribution would be to equalize. One addition might be, if there was still a check for the rich son, would be a wink and a nod "your brother could use the money right now." Not a directive, but it would be between the two sons. And not as awkward as rich son funding less rich son. Instead it's just giving all of Grandma's money to the one who can use it the most.

My approach is to be as equal as possible, and to stay the heck out of what they do with it. I'm not into drama. IMO, if you want to control what they do with it, don't give it. You might think you know best, but you aren't them and can't possibly know for certain what's best for them.

 

[Time2]

There's a minor split, my wife would be more apt to try to control, but I do try to tamp her back a bit, while I'm living, and both the kids no keep her out of their business or they ignore her opinion. Also any gifts I give are not to be brought up to the other, but that didn't work when I paid for his house.

 

[MarieIG]

There's a minor split, my wife would be more apt to try to control, but I do try to tamp her back a bit, while I'm living, and both the kids no keep her out of their business or they ignore her opinion. Also any gifts I give are not to be brought up to the other, but that didn't work when I paid for his house.

In your case, since you paid for her very expensive dental school, I certainly hope there were no complaints.

 

[CRLLS]

Such a dilemma. IMO, it can be neither equal nor fair unless both get the same gift. That said, do what whatever you and Hubby feel is appropriate.

Now my thoughts, does younger son even want to own a house? Some people don't. Has the younger son asked for money to buy a house? Giving him $$ now for "so he can possibly buy a house in the next few years." seems a bit premature to me. We try to teach our kids to live within their means. Yes, we did help them out with small gifts when they got in a pickle. There was no trying to make it up somehow with the other. This seems to not be the case. This is a case of sharing a windfall. As such, it should be equal amounts to both. What their needs are or what their current finances are, are irrelevant. It appears that neither one needs any of it today.

When DMIL passed a few years back, she left DW some money. DW shared some of that equally between both children. We don't know what their financial situations were. We don't even know what they did with the money. Was it invested? Was it spent on groceries or clothes? Was it spent on online gambling? Who knows. It is none of our business. It made DW happy just to share her good fortune equally.

 

[lem1955]

I have always earned more than my sister, enough that I didn't need my parents help. When my parents were alive, they helped support my sister and her choice to have two children. They asked me how I felt about it. I said "while they are alive, they should do whatever they want with their money. When they die, what's left should be split 50/50." That's what they did. I never resented it and my sister was grateful to my parents and to me.

 

[Time2]

In your case, since you paid for her very expensive dental school, I certainly hope there were no complaints.

There aren't, she knows how lucky she is, to not have $300k of student debt.
Even when I was 55, I had know idea, we would be able to spend that kind of money and not affect our retirement.
Indeed blessed, but we did save 20% over 37 years.

 

[pb4uski]

If you withhold money from someone because they are successful, then yes you're punishing them for being successful. Whether they need the money or not is irrelevant.

That's silly. The son that in your opinion is being "punished" has more net worth than the OP. Need is relevant. Let's twist the circumstances a little. Let's say that the second son is struggling, not through any fault of his own, but more from bad luck... let's say an employer went belly up so he lost his job and much of his life savings at the same time. Is the second son's need still irrelevant? I would say no. Now OTOH, if the reason that thesecond son is more needy because he had sent foolishly, then that is a different kettle of fish.

P.S. I know that is not the OP's situation, the older son has been very financially successful and the younger son has only been moderately financially successful. I don't equate help or bequests with love... they are two different things... you can love them equally but treat them different financially... it's your money.

 

[Texas Proud]

Let me throw in another where the successful son might not get the same... what if the other son was special needs? IOW, no matter how hard he tries he will never be successful...

Would you then gift equally to be 'fair'?

 

[street]

A close friend of mine has done very well financially. He told me a few years ago that his father told him he would like to leave everything to my friend's sisters who had a much greater financial need. My friend told his dad that he agrees with that, and that he won't be at all hurt by inheriting nothing. The key point is that there was a discussion beforehand, so there will be no feelings hurt nor any surprises. My friend is very close to his dad and to his sisters, so communications were easy.

My own parents had an interesting dilemma. My mom grew up poor and very much believed in giving equally. My parents had wanted to leave a specific bequest to one niece who could use the money, but they didn't want to offend that niece's sister, who is very well off (and who I suspect has been helping to support her sister for a long time). So my parents decided to bequest nothing to either one. My parents told me and my sibling about this. I proposed that after both of my parents die, that my sibling & I gift the intended amount to the poorer niece. My parents liked this idea and my sibling agreed to it, even though he doesn't like either of these cousins.

My parents had revocable trusts and my mom amended her trust after my dad got sick, naming me her Successor Trustee. After my mom died last year, I asked my sibling in an email if he remembered the agreement about the cash gift to one of our cousins. He affirmed that he did, which relieved me.

I am close to both cousins. Before I sent a check to the poor cousin, I called her wealthy sister and explained my parents' thinking and this agreement. I didn't want to her to feel hurt, nor have her find out from her sister. My cousin completely understood my parents' thinking and thanked me for telling her. Both nieces had been very close to my parents despite living far away.

I sent a letter and a check to my other cousin (the amount was within the US gifting threshold), simply saying my parents wanted her to receive this. I didn't mention her sister at all, nor mention this was an agreement my family had. She was thrilled and touched by my parents' thoughtful gift. Everything worked out well, and nobody was hurt thanks to good communications and people honoring their promises.

Too me communications to all involved is a big deal. Something so kind as gifting can turn into hate so fast. Kindness equals kindness.
You did it right, in my way of thinking.

 

[iloveyoga]

Don't punish success, split it equally.

Well said. From personal experience, it can foster resentment.

 

[iloveyoga]

Lots of good wisdom and experience in this thread.