Parental help with strings attached

[Anonymous]

Anonymous wrote:Thanks everyone. I appreciate the perspectives especially those who point out parents are proposing something mutually beneficial. I guess putting it in such transactional terms, while very rational, doesn’t entirely feel good. But you are right, we are not entitled to something that only benefits us.

And yes, nothing is stopping us from moving away. We are in the process of figuring out this logistically and are open with parents about our plans. It was in this context that they proposed helping us buy a house here.

This has reminded me of one other similar situation where their proposal felt off to me. They brought up helping with grandchildren’s education down the road. We said we would be grateful and here’s the 529 account we have for the kids. They declined and said they would rather set up their own 529 for the grandkids. I think the only the difference this would make is when it comes time to using it, we’d have to ask for their permission to get the money out right? Those whose parents have done this for grandparents - enlighten me.

Just FYI...there are many stories of grandparents doing this or saying they did this, but no money ever materializes come college time. It's their money and they can always take it back (with some penalties).

I imagine perhaps your parents may decide they will help pay for Harvard, but UMD isn't worthy. Kind of the same analogy for your housing situation.

[Anonymous]

Anonymous wrote:Thanks everyone. I appreciate the perspectives especially those who point out parents are proposing something mutually beneficial. I guess putting it in such transactional terms, while very rational, doesn’t entirely feel good. But you are right, we are not entitled to something that only benefits us.

And yes, nothing is stopping us from moving away. We are in the process of figuring out this logistically and are open with parents about our plans. It was in this context that they proposed helping us buy a house here.

This has reminded me of one other similar situation where their proposal felt off to me. They brought up helping with grandchildren’s education down the road. We said we would be grateful and here’s the 529 account we have for the kids. They declined and said they would rather set up their own 529 for the grandkids. I think the only the difference this would make is when it comes time to using it, we’d have to ask for their permission to get the money out right? Those whose parents have done this for grandparents - enlighten me.

Re: 529. There may be two considerations. 1. 529 in the name of grandparents is more beneficial for financial aid for college in certain circumstances. They might have heard about it and assume the impact is more significant than it really is. 2. If there are more grandkids expected in the future, they might hedge it so that even if their financial circumstances change, all the grandkids get equal assistance.

[Anonymous]

The questions that would determine my answer:


-is this a difference between raising kids in an apartment for years in better locale v a “forever” SFH in dmv?

-how much do you care about schools? I don’t care that much about real estate but schools, yes. A gift of, say, 500K could indirectly fund private school.

-how much do you want them in your day-to-day family life? Do you want them at all recitals, birthdays or not?

-are they wealthy enough to fund long term care for themselves? Guessing yes

-do they seem to distrust your spouse and this is how it’s coming out? Is that tension likely to grow?

[Anonymous]

My in laws bought our home for us outright in a city a three hour flight away. I feel like what your parents are doing is completely manipulative. They should offer, no strings attached because they can and want you to be happy or don’t offer at all.

[Anonymous]

Why not just ask them why they're only offering it if you stay?

Who knows, they might surprise you with something like as they age they're hoping if you're in town you'd be able to help some and if you're not they're scared about having the money to hire someone for it.

Or that they envision using the money to travel to you frequently, or getting a condo where you move or who knows what else.

Not saying you need to agree with their thinking or accept any of it - just that it could uncover some actual specifics that are helpful to talk through

[Anonymous]

It depends on their motivation. If, like a PP said, it's not nefarious and they're just trying to even the playing field to keep this area in contention, seems reasonable. But if this is manipulative, that would be more problematic. I think you should move where you want to move, and not be influenced by the money.

[Anonymous]

Your parents aren't supportive, they are manipulative. Do they believe you and your husband don't have the ability to house and educate your children? Do they think you are weak? What does your spouse think of this plan? Move and live YOUR best life.

[Anonymous]

Anonymous wrote:I think your parents came up with what they believe is a mutually beneficial arrangement, and you want to turn it into something that only benefits you.

Once upon a time I told my mom that I would consider stretching some and buy a two family house so that when the time comes I could move her in and simplify my life as far as helping with her care. It was definitely not an offer to buy her a condo in her area of choice.

+1

It sounds like the $ would be some type of sacrifice for them, but it would be worth it to them to help you stay in the area.

[Anonymous]

I am a parent of adult children (I'm 63, they are in their late 20s) and we plan to help them with buying homes when the time comes. Neither of them lives close to us and I cannot imagine putting geographic constraints on our help, which will be a gift.

Do your parents know you would like to live elsewhere? Regardless, their "gift" is very manipulative.

[Anonymous]

My parents helped pay for some of our 529 and I hear about how they contributed to it all the time along with their own 529. I dont know that either affected them differently but it is about control. It's a gift. I have bigger issues to deal with now that they are older. It's nice that they contributed the money because I do not have the money to pay fully for college right now and it allows my kids to attend without huge financial burdens.

I would find a way to buy a house not that close by but allow them to contribute to the 529s. Maybe they can donate all that money to the house to the 529 and then you don't need to worry about college. Living is expensive. Find ways to work around their somewhat manipulative gifts. They want credit and it's their gift. Play to your strengths.

[Anonymous]

OP, because you sound flaky. Parent here. "Flaky" is an exaggeration but it's the easiest way to make my point. You don't have a concrete plan. You "might" do this, or that. If you were already IN this other HCOL and had been there for awhile, that would be different. Settled, certain you would stay there, They wouldn't be losing so much money -- money, if they help you, and then you want a different housing situation.

[Anonymous]

It seems obvious to me that it’s because they want to keep you close by. But if you think there are ulterior motives, then there are probably weird family dynamics at play, and it’s best not to get further mixed up in that.

[Anonymous]

Anonymous wrote:Look at the tax implications. They can only gift you so much money a year.

Le sigh. This isn’t true. If they gift you a down payment bigger than 17k or whatever the current exemption is, they just have to fill out a form with their tax return counting it towards their lifetime gift/estate tax exemption, which is currently $12m or so.

If your parents haven’t yet hit the limit and they give you $300k for a down payment, no one pays any taxes on it. They report it on their tax return and the IRS is counting up to $12m, at which point they will start to have to pay tax on gifts (to individuals).

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would never do that to my kids.

But you could always take the money, buy the house, then sell in a little while for a profit and scamper elsewhere... although two wrongs don't make a right.

To be honest we joked about it but it feels like a betrayal. Also, I think my parents are aware of this possibility and therefore would structure the ownership such that we can’t do it. They are very financially savvy (much more than us). So it really does feel like “golden handcuff” kind of deal.

I’ve taken a lot of gifts from my parents and this would be a clear no.

[Anonymous]

Don't do it.

Your parents are not elderly yet. No need to stay near them right now if you are interested in other areas of the country.

Your 30s never come back. Go and do what you want to do now before eldercare falls on you.

- in my 50s