Giving kids a down payment

[Anonymous]

Anonymous wrote:

Anonymous wrote:We have four kids. We’ve paid for college and grad school for all, nice weddings for the three who got married, and yes provided down payment assistance to the ones who bought houses. In one instance, we even set up a private mortgage for one of the kids—where we were the lender—because they had just got out of college and landed a nice job and a great condo had just gone on the market at a good price right where they were going to work. They had the qualifying income but hadn’t been working long enough to qualify for a bank loan. A year or two later they refinanced and got a bank loan and paid us off.

The point is, you do what you can and adjust to the circumstances. Giving each kid a set $100k amount for a “down payment” is stupid—you wait and see what the actual need is and help then. And when doing it you don’t keep score.

Chances are someone is keeping score. I mean a kid who gets married and buys a house gets $150k or more and another kid who is renting and dating gets nothing? I don’t think it’s stupid to give the same amount to everyone whenever you are handing out these sums.

We have a kid who rents and will forever be single (by firm choice) and doesn’t give a rat’s ass if we help out her siblings who have made different choices. We’ve helped her out plenty and always will and she knows it. She’s quite happy knowing that her little nieces and nephews have nice places to live. I’m sorry to disappoint, but not every family on DCUM is dysfunctional.

[Anonymous]

Anonymous wrote:This board is insane sometimes. Idk a single person whose parents helped them buy a house

Same. I’m 50 and still can’t afford a house. My kid got the benefit of a free college education. Now I need to save for my retirement.

[Anonymous]

Keeping score, roughly, IS appropriate

[Anonymous]

Anonymous wrote:Keeping score, roughly, IS appropriate

So where do you draw the line? We have provided free childcare for all of the grandchildren, which has both saved our kids a ton of money and at the same time is priceless. Should I estimate the amount of money that the parents did not have to pay to daycare or to nannies and give that same amount of money to my kids who elected not to have children?

[Anonymous]

We have a kid who rents and will forever be single (by firm choice) and doesn’t give a rat’s ass if we help out her siblings who have made different choices. We’ve helped her out plenty and always will and she knows it. She’s quite happy knowing that her little nieces and nephews have nice places to live. I’m sorry to disappoint, but not every family on DCUM is dysfunctional.

We also have four kids and aren’t even a little bit dysfunctional - AND we try and keep it generally even between the kids when we are making financial gifts. My parents did the same and I think it has been a bonus that we never had to worry about introducing financial issues to our siblings relationships. Each of our kids will get the same amount of help with a down payment (and some will need it more than others), each gets the same amount at Christmas, etc. We will contribute around the same for each wedding. If someone never wants a house or wedding, they will at some point get a gift to keep things generally equal. They will inherit equally. I cannot imagine a twenty or thirty something who is rejoicing at how nice their nieces and nephews houses while not being provided similar support.

[Anonymous]

Anonymous wrote:

Anonymous wrote:People here really love to humble brag about their wealth. Tone deaf, especially when so many people are struggling right now.

What an idiotic comment. Are you seriously saying bc someone can’t ask a question relevant to their situation bc others are worse off? A rising tide lifts all boats - the more successful I am, the more people I employ, taxes I pay, donate, etc. If a gift of a down payment can help someone get on the property ladder and move up, why not? OP, talk to your estate planner or wealth manager bc we were specifically given an amount we can “give” to each child annually w/o tax consequences. Each child has an account that is set up tax efficiently and will eventually be used for a down payment.

LOL. That made me laugh. Your in the boat with your kid.

--DP and no we will not be giving kids a downpayment despite a $1.3M+ HHI. The first graduated and has a well-paying job and a nest egg he saved from his well-paying internships.

[Anonymous]

I would go with 1 million each that will give a 50% down payment for a decent starter home

[Anonymous]

Anonymous wrote:

Anonymous wrote:This board is insane sometimes. Idk a single person whose parents helped them buy a house

Same. I’m 50 and still can’t afford a house. My kid got the benefit of a free college education. Now I need to save for my retirement.

Then, its a non-issue.

[Anonymous]

Anonymous wrote:

We have a kid who rents and will forever be single (by firm choice) and doesn’t give a rat’s ass if we help out her siblings who have made different choices. We’ve helped her out plenty and always will and she knows it. She’s quite happy knowing that her little nieces and nephews have nice places to live. I’m sorry to disappoint, but not every family on DCUM is dysfunctional.

We also have four kids and aren’t even a little bit dysfunctional - AND we try and keep it generally even between the kids when we are making financial gifts. My parents did the same and I think it has been a bonus that we never had to worry about introducing financial issues to our siblings relationships. Each of our kids will get the same amount of help with a down payment (and some will need it more than others), each gets the same amount at Christmas, etc. We will contribute around the same for each wedding. If someone never wants a house or wedding, they will at some point get a gift to keep things generally equal. They will inherit equally. I cannot imagine a twenty or thirty something who is rejoicing at how nice their nieces and nephews houses while not being provided similar support.

Well, start imagining because it’s happening. Besides, not that they know it—because they don’t—but all four will soon enough inherit enough that the
differences between what each is getting now will prove to be little more than rounding errors.

Oh, if our single daughter ever decides to have kids and wants a house, she’ll get one. Hell, we will help her out with the house if/when she wants one, even if she doesn’t have kids! 😂

[Anonymous]

Anonymous wrote:I was planning to give 100k to each kid. I have two. But one lives in a much more expensive state so I may have to give more like 200k. I wish I could give more to both but that's about my limit.

That's an excellent way to spark a sibling spat.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:we set up brokerage accounts for our kids many years ago. each of three kids have about 300k right now. they can use it anyway they want. we are not giving any more or paying for their wedding. we are done

Our two have similar balances but we've told them it's for a downpayment. We'll contribute to weddings when the time comes, hopefully in the next 5-10 years. Otherwise, we are done with direct contributions. We plan to take them along on family vacations as long as they'll go with us.

pp you are responding to. your approach is similar to our approach. not paying for wedding is not money issue for us. we want them to be able to pay for themselves - "if you can't pay for your own wedding, you are not ready to get married" is our message. we stopped funding their accounts but rethinking whether we should restart.

This is very odd to me but to each their own I guess.

That’s a good way to not end up with grandkids.

A fancy wedding is not a prerequisite for marriage.

[Anonymous]

Anonymous wrote:Has anyone done this or are planning to? How much? We’re thinking of giving 100k to each kid. College is already done and paid for. Does 100k help enough or should we give more?

Not enough around here if your kid wants a SFH in a decent place.

[Anonymous]

We gave 500k. If you have the money no better way to use it than making your kids lives easier.

[Anonymous]

Start a foundation with that money that will grow. Do it in your kids’ names. That’s a nice legacy. You could really change some kids’ lives if you do it right.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I was planning to give 100k to each kid. I have two. But one lives in a much more expensive state so I may have to give more like 200k. I wish I could give more to both but that's about my limit.

But how would you feel if your kid's spouse divorces them 5 years after your gift and keeps half of it?

Easy enough to write into a prenup.

However unless the trust/younprovide th e entire cost of the house and ongoing maintenance, the spouse is entitled to their portion they contributed towards for marriage

Plus, their spouse may resent that their in-laws interfered with their homeownership. Better to give your kid a trust with annual income to spend as they choose, with the principal protected by the trust, than to get involved in a home purchase. Stay out of that.