Yes, it’s all a bit of guesswork and relying on good will and trust, which I think we have as a family. I like your idea, but it still wouldn’t make it “equal” as perhaps Kid One would use money as a down payment or be more aggressive than we are in his investments. There’s no way to guarantee 30 years out what the exact dollar amount would be. I’m just trying to generate a good-faith number so when I talk to each kid so they could have a feel for close-enough real numbers and make the decision how to move forward.
I was just trying to see whether people thought my math worked and whether I was missing something in my calculation.
I’m going to quote Marlo Thomas. “Fair doesn’t have to be equal”..
Just because one kid has different needs now, doesn’t mean they might not benefit from having some additional financial resources now.
When we gift, we give equally to our kids and at the same time. What they do with our gifts is their business. We are not going to try and guess what interest rates, investments, etc might be so we can “equal out” money when we die.
And when we do both go, we want our money split 50/50 even though one of our kids earns 5 times as much money as the second one.
Interesting the different ideas about gifting to the adult children, and to the grandkids. We gifted DD and her spouse a 50% share in the property that our homes are built on, and gave DS and his DDIL the equivalent sum of money for the value of the property. That seemed fair, even though the value of our shared property may increase more or less than the cash value we gave DS, depending on how he invests it, and how the real estate market treats a property with a new house, and a new separate ADU on it.
DD has two kids, DS has one. We provide a childcare/summer camp subsidy for the second child of DD. We don’t consider it a gift to DD, but to the child, and to help with the burdens of the cost of having a second child.
When we put money in the Gkid’s 529s, we don’t consider it money gifted to DD or DS, but money gifted directly to the grandkids. That means that DDs family receives 2/3 of the money, and DSs family receives 1/3. If we followed SOSConcern’s gifting, 1/2 would go the DDs family, and 1/2 would go to DS’s.
Ideas about what is fair can differ! I am hoping that our family’s good communication and love will minimize any feeling of unfairness that might develop over time.
My is for the first paragraph. The land and the money may not end up being exactly equal, but as I like to say, assume good intent and that it’s equivalent enough.
We have one grandchild and that might be our only. We have 2 kids.
I don’t want to penalize one of our children because they aren’t able to have children
So we consider a gift to granddaughter’s college fund a gift for the family, that’s what that family chooses. Which we make even.
How they allocate the money is their choice. One family makes considerable more than the other, that doesn’t factor either.
As far as my and my H’s siblings, I have no idea how they spend their money. Well I have ideas but that’s their business. . That my H and I save any gifts or inheritance that we receive is our business.
I took a class on estate taxation as a filler for my grad school schedule. It was a very useful class, as I found out later! The gift is given when the money irreversibly leaves the giver’s hands. Since a check can be lost and never be cashed, the date of writing the check doesn’t matter.
I think you have to give now equally to your two kids, despite one not needing it as you say. Doing anything else has the potential to cause problems in the relationship between the two kids, not just in their relationship with you.
I think YDS is finding a way to be fair, just wants to do due diligence determining a reasonable amount for kid2. For us, this is a good example of something we’d put on the agenda for or next quarterly meeting with the FA (or shoot him a quick email).
I agree that gifting equal value at the time of the gift is one way to make things more fair, and you can’t control for investment decisions.
I am curious about your grandkid strategy though. Essentially, you are providing more ongoing support to DD’s household. If DS were to have a kid two and/or kid 3, would you then true up the kids’ 529s to the values of the others? He who has kids the fastest wins more? I could see how having one grandkid with twice as much in the 529 might not seem fair among the grandkids, but it is also about how households spend their money. If the focus remains on gifting to the grandkids, DD’s family gets twice as much of your assets. I might resent that if I were DS.
I suppose there are different ways to look at this. You are looking at this as fairness per household. We are looking at this as fairness per individual family member. In my mind, why should GD4 and GS6 have to split the same amount of money that other GD4 receives? That seems highly unfair to me, and I imagine that it would seem highly unfair to the GKids when they are old enough to realize that the solo GK has twice as much money in her 529k account than they each have.
In our extended family, there are only 3 GKids, and there will be no more. Unplanned pregnancies do not occur in same sex couples, and there are medical reasons why the other family will not have another child, so we don’t have to worry about any more hypothetical grandchildren. We all moved to the same semi rural area so that the littles could be raised near each other and with extended family support. Lots of love to go around!!
One of our kids is married and the other is not. We give the same to each family unit. Since we don’t know what will happen in the future, our wills clearly state that anything we have left will be split evenly between our two kids!
It’s would be a tricky thing to figure out fairness in estate planning once grandchildren come a long. (Though I do hope to someday have that challenge ) Each family will approach it differently. The main priority is to make it official via wills (or possibly trusts in some cases). And revisit it if methodology needs to change due to more grandchildren arriving.
Do you plan to be open/upfront/sharing with both kids what the plans are for both of them? If so, and if they have a good relationship, perhaps consider involving both of them with the decision so it’s not just your decision. That is, if one of them wants the money now, and the other one doesn’t, then maybe they both have excellent input into how much you should put away for the other one so that it seems fair. They sound like very bright young men who could help and take the concern off of you.
Yes, I wrote that upthread. We will see Kid Two later this month and will discuss it then. And Kid One has said that he would want to talk to Kid Two before we do anything, either just the two of them or the four of us.
And, yes, they are both wonderful people. I’m a lucky mom.
Both my mom and my in-laws estate leaves the estate to the their children not the grandchildren. All have been generous with gifting to the grandchildren over the years.
In our case we shared with the siblings what we were doing. One of the siblings was offered a similar gift but is not in a hurry to do so. We haven’t given cash gifts to each of them but help them when we see a need. We could change that strategy down the road. We are willing to loan them money for big projects when needed. In some cases we have forgiven some of that as a gift. We also have 529 plans for each grandchild started with the same dollar amount. We see that as gifts to the grandchildren not the parents.
Just our philosophy is we gift to our children not their spouses. We also advise them to keep gifts as their sole and separate property.
This gift to children discussion reminded me of my mother. In her 80’s, she had her pension, Dad’s survivor pension, SSA, annuity, and IRA. She also received the income from Dad’s trust. Very few expenses since she owned her condo and had basically stopped traveling. Whenever her bank balance got high, she would do what she called “Share the Wealth.” My brother and I each got $5000, and the three grandchildren each $3000.
If I am to believe my SIL’s H, who handles MIL’s finances (SIL is supposed to, but whatever), MIL has a ridiculous amount of money. She has an LTC that covers $100/day until she’s 102, SS, RMDs, two annuities and a survivor pension. The combination of income exceeds her outgo, and her investments keep growing. She could easily gift to her grandchildren, and they would certainly appreciate it. However, she’s worried about outliving her money. At 99, even if she needs more aide coverage than the current 20 hours/week, she isn’t going to run out of money. But she isn’t interested in parting with it. It’s hers to do with as she pleases, and the kids & grandkids will eventually inherit it … but she doesn’t see the value of sharing while she’s alive. I imagine some of that has to do with being a child of the Depression.
I’m having a battle with H over changing the beneficiaries of his father’s taxed accounts to the grandchildren while they are in their prime years. We don’t need it and if we got it, it wouldn’t benefit us like it would them. We can’t really gift them anything now except the $38k a year but that’s a pittance compared to a large lump sum for a home down payment or investments to further grow. H is so stubborn.
is for the first paragraph. The land and the money may not end up being exactly equal, but as I like to say, assume good intent and that it’s equivalent enough.
. That my H and I save any gifts or inheritance that we receive is our business.
It was a very useful class, as I found out later! The gift is given when the money irreversibly leaves the giver’s hands. Since a check can be lost and never be cashed, the date of writing the check doesn’t matter.