How to equalize financial gifts to adult children

[Anonymous]

I would give equal amounts for the annual gift. If you want to give more, you can give to the spouse and buy something directly for the single spouse, like say jewelry or furniture. That isn't going to be tracked. I'm dealing with estate taxes now and wish my parents had bought stuff for us kids while alive, because the estate tax is crazy high and its throwing money away to the government.

[Anonymous]

Anonymous wrote:I would give equal amounts for the annual gift. If you want to give more, you can give to the spouse and buy something directly for the single spouse, like say jewelry or furniture. That isn't going to be tracked. I'm dealing with estate taxes now and wish my parents had bought stuff for us kids while alive, because the estate tax is crazy high and its throwing money away to the government.

Do you think, from their perspective, they were unsure of final life expenses and that made them a little more unsure about giving while alive? I ask that because we wonder about that ourselves - we think we have more than enough for ourselves but giving away significant amount money now (which we have some already) makes me somewhat uncomfortable. We don't want to be burden on our kids in our later years.

[Anonymous]

Anonymous wrote:I am looking for ideas about how to fairly pass funds to my two children. We are in our 60s now and expect that our estate will be subject to federal and state estate taxes when we die. We have two adult children, one of whom just married. Our other child is single. My spouse and I would like to each gift the maximum amount ($19,000) this year to both children and to our child's spouse. This would result in our single child receiving less. I know that we need to consult an attorney, but I am wondering if people have suggestions for how they have handled this to make sure things are equal. I am thinking that the best option would be to put an equal amount in a trust each year for our single child.

That sounds fair and is less likely to cause hurt feelings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Fwiw I am an adult child and I absolutely don’t care about this kind of thing being equal.

But, we all have enough money and no hardships that would preclude us from supporting ourselves anyway.

The major trust in our family splits per stirpes, so I actually encourage my parents to do unequal distributions when they are alive because some branches have more grandchildren and that just makes sense to me. We definitely get unequal on tuition and housing and no one is upset about that.

You probably should have a conversation about it as a family.

Thanks for this thoughtful response. We have discussed with the married child (who will probably be much better off than the unmarried child) and they don't care about equality but their spouse is reluctant to accept a gift without it being equal. We would also prefer it to be equal.

The married child doesn’t care about equality because they’re getting double as a family. What do you think the other child will feel?

[Anonymous]

oh no no no no no no no

do NOT give the childless, single spouse less overall than the other kid just because the other kid has kids or a spouse

how much are you worth?

you can give something like 18k a year (it goes up every year and I'm not sure where we are now) to anyone you want without gifting it on your taxes. BUT Trump et al have raised the lifetime/estate exemption amount to 15 million per person. So as long as you file a lifetime exemption return, you can gift more than 18k and not pay taxes on it. So unless you are worth over 15 million, you can gift the childless unmarried kid the same as the other kid, spouse, kids etc.

Personally, I would want my kids to keep my gifting and inheritance separate so I would gift only to my kids/grandkids. you can help ensure it stays separate by setting up trusts. just depends on if you want to deal with that.

[Anonymous]

Anonymous wrote:Fwiw I am an adult child and I absolutely don’t care about this kind of thing being equal.

But, we all have enough money and no hardships that would preclude us from supporting ourselves anyway.

The major trust in our family splits per stirpes, so I actually encourage my parents to do unequal distributions when they are alive because some branches have more grandchildren and that just makes sense to me. We definitely get unequal on tuition and housing and no one is upset about that.

You probably should have a conversation about it as a family.

Yeah NO. Do NOT follow this advice, OP. It's not fair for the kid who is married and or has more kids to get more money. Keep it equal among your kids.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would give equal amounts for the annual gift. If you want to give more, you can give to the spouse and buy something directly for the single spouse, like say jewelry or furniture. That isn't going to be tracked. I'm dealing with estate taxes now and wish my parents had bought stuff for us kids while alive, because the estate tax is crazy high and its throwing money away to the government.

Do you think, from their perspective, they were unsure of final life expenses and that made them a little more unsure about giving while alive? I ask that because we wonder about that ourselves - we think we have more than enough for ourselves but giving away significant amount money now (which we have some already) makes me somewhat uncomfortable. We don't want to be burden on our kids in our later years.

In our situation, our parents were Greatest Generation and grew up without wealth. They were worried about coddling us middle aged kids (we lived middle - slightly upper middle class lifestyles), were terrified of getting themselves into tax trouble, and liked to see their money grow in their account whch they checked daily. They were extremely frugal at the end, and I would have liked them to spend more on their own comfort. They were the best parents, but the estate planning could have been better. Obvioulsly there is plenty of money, but most advisors told them to transfer more to us and they just didn't want to let it go even to their trusted kids. I think at these wealth levels, you are being worried for nothing. You don't need $15+ M for your own care.

[Anonymous]

The cleanest approach that is the least likely to cause resentment is to give each child $38k and nothing directly to the spouse, but they are the indirect beneficiary of your kid's gift. Otherwise, I suppose you could give unequal distributions at death to offset giving the married couple more during your lifetime, but that's complicated and leaves room for dispute.

[Anonymous]

Anonymous wrote:I do not think it is right to give the married child 2x the unmarried child. Each of you give the unmarried child 19k and do the same for the married child. Easy and equal. If either has kids at some point. I think it would be fine to contribute to college as a separate issue..

Unequal for marriage seems unhealthy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Fwiw I am an adult child and I absolutely don’t care about this kind of thing being equal.

But, we all have enough money and no hardships that would preclude us from supporting ourselves anyway.

The major trust in our family splits per stirpes, so I actually encourage my parents to do unequal distributions when they are alive because some branches have more grandchildren and that just makes sense to me. We definitely get unequal on tuition and housing and no one is upset about that.

You probably should have a conversation about it as a family.

Thanks for this thoughtful response. We have discussed with the married child (who will probably be much better off than the unmarried child) and they don't care about equality but their spouse is reluctant to accept a gift without it being equal. We would also prefer it to be equal.

The married child doesn’t care about equality because they’re getting double as a family. What do you think the other child will feel?

I should have explained further that the married child has said they don't mind if we leave more to their sibling who will not likely to have more money in life. Married child has good income with a spouse with a good income and family money on the spouse's side.

[Anonymous]

Anonymous wrote:I'm not a tax lawyer, but I think the only downside if gifting your single kid more than $19k each year is that each dollar above that reduces the lifetime estimate tax exemption you have to work with. That's currently like $14 million.

The annual gift of $19,000 doesn't go against your lifetime exemption nor do you need to file anything related to it. You and your spouse can each give each of your children $19,000 for a total of $38k to each child. Or, just $19k to each.

[Anonymous]

I have six siblings, and each of us has between 1-4 kids. My parents helped pay college tuition for every grandkid, same amount per kid, and it never occurred to me or any of my sibs to complain that others received more (indirectly) because they had more kids so took more from the potential estate. Similarly, I disagree with all those saying unmarried kids are getting an unequal amount if parents gift to siblings and their spouses/grandkids. These are all separate people and you can’t “roll up” the family and attribute gifts to each of them to just the one child of the grantor. FWIW, my sibs and I are all over the place financially and definitely not similarly situated.

[Anonymous]

We have three adult children all married with children. We have set up irrevocable trusts that will be divided by three. Our annual gifts are always equal for each family. The only thing that is unequal is funding 529's. Each grandchild gets the same soon after birth but not all of our kids have the same number of children. We have done a few "one off" gifts such as paying for IVF but in total we do our best to be equal. Thankfully all of our children are doing well career wise and none of their children has a special need.

[Anonymous]

Anonymous wrote:I'm not a tax lawyer, but I think the only downside if gifting your single kid more than $19k each year is that each dollar above that reduces the lifetime estimate tax exemption you have to work with. That's currently like $14 million.

I can accept that you're not a tax lawyer but you're 100% wrong about the "downside" reducing the lifetime tax exemption. You're correct that it's currently "like $14 million."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Fwiw I am an adult child and I absolutely don’t care about this kind of thing being equal.

But, we all have enough money and no hardships that would preclude us from supporting ourselves anyway.

The major trust in our family splits per stirpes, so I actually encourage my parents to do unequal distributions when they are alive because some branches have more grandchildren and that just makes sense to me. We definitely get unequal on tuition and housing and no one is upset about that.

You probably should have a conversation about it as a family.

Thanks for this thoughtful response. We have discussed with the married child (who will probably be much better off than the unmarried child) and they don't care about equality but their spouse is reluctant to accept a gift without it being equal. We would also prefer it to be equal.

The married child doesn’t care about equality because they’re getting double as a family. What do you think the other child will feel?

I should have explained further that the married child has said they don't mind if we leave more to their sibling who will not likely to have more money in life. Married child has good income with a spouse with a good income and family money on the spouse's side.

Keep your gifts equal. Life is (hopefully) long and unpredictable. The married child could end up divorced or lose a job, the single child could marry into wealth, illness might strike anyone, etc.