Would you help your adult children financially ?

Parent Cafe
41

<p>Actually if the child or beneficiary was given funding to help purchase housing, that could easily be a benefit worth more than $20K/year, as the person would no longer be at the mercy of the rental housing market. It is important to remind the prospective purchaser to set aside a sufficient fund for maintenance, insurance, and other expenses that come with ownership.</p>

<p>Sometimes a larger disbursement can be more useful for planning the small ntermittent disbursements that are much more rapidly spent. Might be useful if a significant disbursement came with a session or more with a financial planner to assist the recipient in planning use of funding.</p>

<p>Of course, it’s a delicate balance between trying to help and trying to control. Once a gift is given, it is of course the recipients to use as s/he chooses. It’s not good to try to control anything after it’s already been “given as a gift.”</p>

42

<p>If my kids are sincerely trying to make their way in the world without any destructive habits, then yes. I would help them financially. In fact, we’re planning to pay-off their college loans and we’ve already got a little (very little) investment set aside that may become a house down-payment wedding gift for each of them one day. </p>

<p>But, if they’re financially irresponsible, I can’t answer. There was a time in my life when Dad told me he would never give me another cent. He said I had squandered everything and didn’t deserve any more help. His decision left me homeless at the age of 20. </p>

<p>But, as much as he hurt me (months of depression), he was right. His refusal was essentially my rock-bottom and it gave me the wake-up call I needed. </p>

<p>So, from personal experience, I can’t answer the OP’s question. Dad’s refusal ended up being good for me. Would I have the strength to put my child through that? I don’t know.</p>

43

<p>Again, I want to comment on how generous parents are. </p>

<p>Seems like as long as the ability is there, parents are willing to help out their children, no matter the age. </p>

<p>In RL I am noticing quite a few examples of adult children in their 50s and 60s deeply resentful of not receiving the help they feel they need from parents in their 80s. I sometimes wonder when an obligation to one’s children ever ends.</p>

<p>From the off-spring point of view, mom or dad have the money, they are rich and we are poor - they have to help us. Where is their money going anyway ? There is a “my parents are spending my inheritance” mentality going on with some off-springs much worse off in life than their parents.</p>

44

<p>It would give me great joy to help my adult children as long as they were being responsible (with work and not being wastful with their own money). </p>

<p>I love the idea of multi-generational vacations on grandma and grandpa! My parents would have loved to provide this for us if my dad had not gotten sick and required years of private pay nursing home care. </p>

<p>One of the greatest gifts I can give my children is to be financially secure myself. Hence, I view the money I allocate to my retirement savings, health care, disability, and long term care insurance as important for all of us.</p>

45

<p>I have a sib who is STRONGLY “hinting” that she & high-spending H will have absolutely NO pension or savings when her H retires (tho she isn’t working and not even actively searching for a “real job–says she only wants easy posh job”). We tell our folks, they earned their $$, they should spend it. I hope they do and really think adult kids who are in their 50s & 60s who haven’t saved anything toward retirement but still manage cruises, private tuition for their 3 kids, grad/professional school for 2 of them, always brand new pricey cars, pricey vacations & “the works,” have no where to look but themselves if they have nothing saved. Really would be unhappy if my folks scrimped to bail out such a family, but it’s my folks’ money. I know we won’t be giving sib a dime. Her house is easily worth 2-4 times the value of ours & she sneers at our frugal lifestyle.</p>

46

<p>When I worked in personal finance advising, we told clients to treat all kids the same regardless of situation in estate planning. Even if one kid had a ton of money and the other did not. Almost always, not doing so leads to great resentment and jealousy.<br>
Same holds true for significant gifts during the lifetime. Money matters can cause rifts in the most loving of families. </p>

<p>The only exception advised was if there was a health reason (for example if parents had to set up a trust for a disabled child for their lifetime care).</p>

47

<p>I think the resentments could work the other way around. If one sibling was already wealthy and another was just scraping by, it would make sense for parents to try and even things out with the inheritance. I think it would be important for the parents to explain their thinking before hand and hopefully get some agreement. </p>

<p>If one of my children were wealthy, able to take yearly European vacations, have a second home, cars, boats, jewelry, etc. etc. and the other was working but living in a run down house, taking no vacations, had little in savings, etc. etc. it would make no sense to me to leave them equal amounts.</p>

48

<p>I see both sides of it. But why “penalize” someone for being successful or possibly “reward” the behavior HImom describes? It’s the parents’ choice, clearly, but I think equal treatment is the way we will go, even though my children will likely end up in different financial situations based on interests and work ethic. All the professionals I know in personal finance (I am in institutional finance) preach equal treatment with the exception noted. </p>

<p>Back the OP, I would help if I could and the child was responsible.</p>

49

<p>Hypothetical parents in their 70’s are financially solid and have 2 kids both in their late fifties.
One of their kids have no children, the other has 2-the beloved grandkids, both in their late 20’s.
Do the grandparents split the inheritance into 2 equal parts or 3 equal parts with the grandkids sharing a third, or 4 equal parts?
Opinions please.</p>

50

<p>Batllo, my vote would be for 2 equal parts. </p>

<p>Or, the granparents could do what mine did: Give each grandchild a flat amount. The middle generation splits the remainder equally.</p>

51

<p>2 equal parts.</p>

52

deleted for privacy reasons

53

<p>Buying a house? No.
Taking whole family on vacation? Yes.
Helping with grandchildren’s private education? Yes.</p>

<p>We have invested in our children’s education, leaving them with no debt. They have great jobs and they’ll just have to live within their means. I don’t want to take away their satisfaction that they’ve made it on their own. We did.</p>

54

<p>Thanks DougBetsy, CTTC, Silpat, BoomerT, Hunt and munchkin.</p>

55

<p>When it comes to dividing an estate between children, I think equal shares is the best way to proceed. And, not necessarily because of the fear of showing favoritism. In my family’s case, my parents have decided on an unusual split. There are 5 siblings. Four of whom are totally self-sufficient and financially secure, while one has zero financial sense. At some level, I think my parents feel responsible for this sibling’s poor money-handling skills. Anyway, their formula for dividing their estate is this:
Sib1 w/ poor money skills=40%
Sib2 w/ excellent money skills, but poor career choice in my parents’ estimation=30%
Other 3 sibs (3, 4, & 5)=10% each</p>

<p>Sib 1 will, without a doubt, blow through her 40% share without a blink of the eye. And will accept the 40% as a fair distribution, with absolutely no shame.</p>

<p>Sibs 3, 4, & 5 don’t need the money, and won’t resent Sibs 1 & 2 because they will know the distribution is a back-handed compliment in our parents eyes. </p>

<p>However, Sib 2 will be wounded by my parents’ belief that he can’t support himself and his family, as well as by being lumped with Sib 1. Sib 2 is very successful at his career and his wife is very successful as well. They don’t need any extra help and will be insulted<br>
and embarrassed from the grave. I can’t even imagine how badly he will feel. He has a strained, though civil, relationship with my parents. Always has. They just don’t get him. </p>

<p>My parents don’t know that I know about their distribution formula. I only know because Sib 3 is their executor and revealed the info to me. Occasionally, I’ll remark to my parents about how well Sib 2 and his wife are doing in their chosen careers, hoping they will get the hint. (One of them is a tenured professor and dept chair at a prestigious university. The other creates well-respected documentaries and works in public tv.) </p>

<p>I guess the main point I am trying to make is that unequal shares can cause hard feelings, even if made with the best of intentions. </p>

<p>btw, I am posting under a new username, so I can remain anonymous. One sib knows I post here sometimes.</p>

56

<p>Unequal shares can cause hard feelings, as can equal shares.</p>

57

<p>Hunt, that’s why I urge my parents to spend their money on things that give them pleasure. My wish would be that there would only be enough left to close out their final affairs. : )</p>

58

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<p>I will tell you how one family is handling it. The parents divided the inheritance among the children and made requests to the ones without grand kids to leave whatever came from the parents to the grands when the children in turn passes as they have no heirs by blood. </p>

<p>The requests are not binding and cannot be enforced. </p>

<p>The children without heirs have already told me that the parents’ request will not be honored. They will will their estate however they see fit.</p>

59

<p>If the parents want that result, they should leave that share in trust for the children, with the remainder to the grandchildren.</p>

60

<p>That’s why I think leaving an inheritance(entitlements) is not a good thing. My H and I plan to spend most of what we have for our pleasure and to give to charity. Our money is ours and we’ve made it clear that it’s not theirs.</p>

<p>I don’t think our children feel they’ve been deprived.</p>