Parents paying for school

[Anonymous]

My parents offered to pay for private school for my kids. They are now 2 and 4.

It is an incredibly kind offer. But, we can afford private school. We have saved for it, and have enough HHI. My husband feels weird about taking them up on this offer, and worries that in the future it will create tension or a strange power dynamic for them to be paying for something specific. Especially knowing my Mother has a tendency to hold things over our heads... ex... well I got you this so you should use it like this. I hear that... But, I can deal with her. And this is a generous gift that would allow us to put more money elsewhere.

I also know the reason that they offered is because my brother can not afford private school, however, my parents want their grandkids to be able to go to private school and they wanted it to be fair, so they extended the offer to our family. Also, it would not impact my parents finnances greatly to be paying for private school for multiple kids.

My husband wants to deny the offer. I don't think that is his place to say if it is coming from my parents. He said he would consider it if it was a check and not a specific payment, but I think this is his own insecurity and pride. This is becoming a huge disagreement. I am trying to at least understand his persepctive, but, I am having a lot of trouble with that.

Thoughts?

[Anonymous]

Don't do it. If she is worried about being fair tell her to put the money in a savings account for the kids. She will hold this over your head for all eternity and probably hate your husband for not getting on his hands and knees in gratitude.

[Anonymous]

The fact that your mother holds things over your head is the problem. This gift would come with strings attached! I’d say. I thank you because of that.

[Anonymous]

Anonymous wrote:Don't do it. If she is worried about being fair tell her to put the money in a savings account for the kids. She will hold this over your head for all eternity and probably hate your husband for not getting on his hands and knees in gratitude.

Yeah that doesn’t work from a tax perspective. Over 15,000 a year, the grandparents would either have to pay 40% and gift taxes or use up lifetime exemption, which is unfair to the rest of the family members who therefore make it less because they’ve used up their state tax exemption. The reason is smart for grandparents to pay for school if they have a large estate is it they can pay the tuition directly without incurring any gift tax or lifetime exemption.

[Anonymous]

Anonymous wrote:My parents offered to pay for private school for my kids. They are now 2 and 4.

It is an incredibly kind offer. But, we can afford private school. We have saved for it, and have enough HHI. My husband feels weird about taking them up on this offer, and worries that in the future it will create tension or a strange power dynamic for them to be paying for something specific. Especially knowing my Mother has a tendency to hold things over our heads... ex... well I got you this so you should use it like this. I hear that... But, I can deal with her. And this is a generous gift that would allow us to put more money elsewhere.

I also know the reason that they offered is because my brother can not afford private school, however, my parents want their grandkids to be able to go to private school and they wanted it to be fair, so they extended the offer to our family. Also, it would not impact my parents finnances greatly to be paying for private school for multiple kids.

My husband wants to deny the offer. I don't think that is his place to say if it is coming from my parents. He said he would consider it if it was a check and not a specific payment, but I think this is his own insecurity and pride. This is becoming a huge disagreement. I am trying to at least understand his persepctive, but, I am having a lot of trouble with that.

Thoughts?

Wow. Your husband doesn’t want to accept direct tuition payment but would accept a check??

Basically he will take the money to benefit and enrich himself, but not for his kids tuition?

It doesn’t work as well to take the money directly because your parents can pay the tuition directly without incurring gift tax of lifetime exemption consequences. If they cut you guys a check, after 15k per person per year there are tax consequences.

If you say no, you have to be ok with your sibling effectively inheriting more.

Your husband sucks. I’m very suscopcious of his motives here.

[Anonymous]

This is a good estate and inheritance move. I would let her instead of cutting a check for tax purposes as explained above.

[Anonymous]

Your husband doesn't want his in laws controlling him. Team husband.

[Anonymous]

OP I would not do this.

If mom and dad want to give the kids money have them create funds for them to be used for college or grad school.

[Anonymous]

If your husband isn't comfortable with this, then don't do it.

That said, can you suggest they put the money in a college account?

[Anonymous]

Anonymous wrote:If your husband isn't comfortable with this, then don't do it.

That said, can you suggest they put the money in a college account?

Jesus. No. Read the posts about taxes. Private school is often fifty thousand a year. They wouldn’t be able to give kids that much annually without incurring gift tax expenses.

[Anonymous]

If it’s part of an estate tax avoidance thing it’s a pretty big benefit. They pay the school directly. I agree people should be wary of parents using money as leverage, but as long as you can take over the payments whenever you want, there’s not much leverage. It’s when you couldn’t otherwise afford it that it gets sticky.

[Anonymous]

The fact they do its with strings makes me lean toward saying don't take it, you will pay for it with therapy, guilt and misery.

On the other hand, it's a great way for them to give a tax free gift and spend down some of their estate.

I would put your cards on the table. Make it clear you are enormously grateful for the consideration and you would be interested in accepting, if it is truly a gift. If there are any stipulations or expectations I would honestly get them in writing and respond in writing. That way, 20 years from now when mom wants to move in and be catered to because she funded private school, you make it clear that was not the deal.

[Anonymous]

sorry gifts not its

[Anonymous]

Anonymous wrote:The fact they do its with strings makes me lean toward saying don't take it, you will pay for it with therapy, guilt and misery.

On the other hand, it's a great way for them to give a tax free gift and spend down some of their estate.

I would put your cards on the table. Make it clear you are enormously grateful for the consideration and you would be interested in accepting, if it is truly a gift. If there are any stipulations or expectations I would honestly get them in writing and respond in writing. That way, 20 years from now when mom wants to move in and be catered to because she funded private school, you make it clear that was not the deal.

This is just obnoxious. If your parent can afford it (meaning they have more than ten million dollars), take it, and if it becomes a problem, start paying for it yourself.

[Anonymous]

The restriction on the gift limit is per person per recipient. In other words, each grandparent can write a check for up to $15,000 for each member of the family. That means that grandma can write one check for 15,000 to mom and one 15,000 check to dad and grandpa can write one $15,000 check to mom and one $15,000 check to dad. As well as each of the kids. It would have to be multiple checks to avoid the inheritance.

You may also consider cross posting on the private school forum. You’ll find many people there that can afford private school however, the grandparents are paying. It is partly a wealth transfer. The reality is if you spend less on private school than that money further down the line for your child for college or down payment on a house or whatever..