When do you tell kids about family money?

[Anonymous]

Good for you! ( I mean that---I'm not the obnoxious PP). We plan to do the same for college (once grandkids arrive). We gift our kids yearly as well. In reality, once you do all of that, the inheritance doesn't matter as much. Not having to save for college and getting $50K/year will set up almost any responsible person for an amazing UMC+ lifestyle.
I used to think---just give it all away. But as our kids hit college and beyond and I see what good people they are and how motivated they are, I have less and less issue leaving majority for them.

For people gifting to kids annually now, at what point did you feel comfortable doing that? Was it $x million a year in income, or $x amount of net worth? We are wondering if/when we should start this.

[Anonymous]

Anonymous wrote:

Good for you! ( I mean that---I'm not the obnoxious PP). We plan to do the same for college (once grandkids arrive). We gift our kids yearly as well. In reality, once you do all of that, the inheritance doesn't matter as much. Not having to save for college and getting $50K/year will set up almost any responsible person for an amazing UMC+ lifestyle.
I used to think---just give it all away. But as our kids hit college and beyond and I see what good people they are and how motivated they are, I have less and less issue leaving majority for them.

For people gifting to kids annually now, at what point did you feel comfortable doing that? Was it $x million a year in income, or $x amount of net worth? We are wondering if/when we should start this.

Not sure what level. We were at least $10M+ Total networth. But we started when oldest had their first W2 income. We decided to match their income up to the Roth amount. So they got to keep their earnings and invest it, while also investing in a Roth (retirement account). We paid for most expenses in HS/College so the kid happily saved everything else (and loves to save). Then when graduated college we started with another $10K/year so they can max their retirement and Roth.

Now we are UHNW, so we started the $36K/year gifting. But it also aligned with them graduating college. I wouldn't gift a college kid that amount, unless you trust them to just save it.

IMO, if you have enough for luxury retirement and then some, it's time to start considering gifting now, when it makes the biggest impact.
But when we did that, we had enough to live our luxury lifestyle in retirement until 95+ and barely touch our investments Figured the money helps the kids much more as they are in their 20/30s than in their 60s

[Anonymous]

Anonymous wrote:

Good for you! ( I mean that---I'm not the obnoxious PP). We plan to do the same for college (once grandkids arrive). We gift our kids yearly as well. In reality, once you do all of that, the inheritance doesn't matter as much. Not having to save for college and getting $50K/year will set up almost any responsible person for an amazing UMC+ lifestyle.
I used to think---just give it all away. But as our kids hit college and beyond and I see what good people they are and how motivated they are, I have less and less issue leaving majority for them.

For people gifting to kids annually now, at what point did you feel comfortable doing that? Was it $x million a year in income, or $x amount of net worth? We are wondering if/when we should start this.

I’m not high income but I’m relatively high net worth and I think it’s important to gift now when the kids are younger because it makes a bigger impact. I started matching their summer earnings in a Roth when they were in high school. Now I try to gift $15k a year which is as much as I can afford. I think anything is helpful.

I watched my parents plan for an inheritance that never came because my dad died at 73 and his mother outlived him.

[Anonymous]

In my will. They are both in their early 20s, out of school and working. They know their grandparents have left them some money that they will receive at 25, 30 and 35 but it's not life changing money.

No point in speculating how much they might receive upon our deaths since hopefully that's decades away.

[Anonymous]

My kids are in their late 20s and will also inherit some money from a grandparent (a little less than OP) and money from us (more than OP). They know about the grandparent money and that's a little bit more real as they will likely get that in the next 10-12 years. It will help them each buy a nice house.

They know we are well off but probably don't know the full scale of it beyond the value of our 2 houses. And I think we will keep it that way for a while. They need to continue to work and plan as if the money isn't there, because it will (hopefully) be a while before they inherit it.

I will be retired before I inherit anything from my parents so I've always planned for retirement as if it weren't there.

[Anonymous]

Our kids are in their 30s, married and doing very well career wise. We are very generous with them but not enough to spoil them or dissuade them from succeeding on their own. But, when my husbands parents died he turned down his inheritance and had it go directly to our kids because we didn’t need it and it would really benefit them. It was about $300k per child. We have been very generous funding 529 plans, likely enough to pay for college or close to it. We have set up irrevocable trusts so they will each inherit a lot of money but since we are each the trustee of each others trust if a real need came up the trusts can be used well before we pass. We told them a few years ago roughly how much was in the trusts and I’m sure they’re worth a lot more now.

[Anonymous]

Anonymous wrote:My kids are in their late 20s and will also inherit some money from a grandparent (a little less than OP) and money from us (more than OP). They know about the grandparent money and that's a little bit more real as they will likely get that in the next 10-12 years. It will help them each buy a nice house.

They know we are well off but probably don't know the full scale of it beyond the value of our 2 houses. And I think we will keep it that way for a while. They need to continue to work and plan as if the money isn't there, because it will (hopefully) be a while before they inherit it.

I will be retired before I inherit anything from my parents so I've always planned for retirement as if it weren't there.

If you live in 2, $2-3M homes, your kids likely know your net worth range. Especially if they are 18+. Also, especially if you didn't buy the homes for $400K and they increased in value (ie you purchased them for $2M+)

[Anonymous]

I would teach my kids about no free money even though you know there will be free money.
I would also teach my kids about responsible spending as they start making money while in college. Teach them some investment techniques, trusts, life insurance and many more things. Expose them to reading about managing and investing. And when they do get the money, they don't go spending it frivolously. Also, teach them to find friends and partners that are not all about money, especially the spouse because there will be major friction if the spouse knows you will be getting that much in inheritance.

And I would not tell my kids they will get that much. I would not even mention the amount. If they ask, I would just say you may be getting something but I don't know how much.

[Anonymous]

Anonymous wrote:I hate posts like this. The OP is humblebragging plain and simple. It doesn’t matter how they live - their kids aren’t idiots. They know their parents and grandparents have money and that they stand to inherit it. There’s no way they don’t.

Not necessarily. I grew up solidly middle class but have done well as an adult - to tune of having $10mm at 46.

We still live in the house we bought in 2013. Have 2 Chevrolets in the garage. We fly premium economy on United.

My children have no idea how much money we have.

The the OP - I’d suggest not direct giving until they are married with children of their own. You can help with school, help with down payment, first car, etc, but don’t give them money until they are more established. The risk is all your money ends up their nose if they are given a lot of money too soon.

If someone gave me $2mm when I was 25, it would have been a disaster. If someone gave me $2mm now, it would become part of my portfolio.

[Anonymous]

The “wealth of wisdom” book by Tom McCullough and the podcast of the same name has chapters/episodes on some of these issues.

[Anonymous]

Anonymous wrote:I would teach my kids about no free money even though you know there will be free money.
I would also teach my kids about responsible spending as they start making money while in college. Teach them some investment techniques, trusts, life insurance and many more things. Expose them to reading about managing and investing. And when they do get the money, they don't go spending it frivolously. Also, teach them to find friends and partners that are not all about money, especially the spouse because there will be major friction if the spouse knows you will be getting that much in inheritance.

And I would not tell my kids they will get that much. I would not even mention the amount. If they ask, I would just say you may be getting something but I don't know how much.

I agree with most of this but once your kids are in their mid 30’s I think it is helpful for them to get a good sense for what might be on the horizon. This is helpful for them with their own planning for education and retirement planning. My parents never did this because their estate wasn’t large enough plus they had six children. Our kids are married, very responsible with good jobs so we can be more transparent with them than others might be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hate posts like this. The OP is humblebragging plain and simple. It doesn’t matter how they live - their kids aren’t idiots. They know their parents and grandparents have money and that they stand to inherit it. There’s no way they don’t.

Not necessarily. I grew up solidly middle class but have done well as an adult - to tune of having $10mm at 46.

We still live in the house we bought in 2013. Have 2 Chevrolets in the garage. We fly premium economy on United.

My children have no idea how much money we have.

The the OP - I’d suggest not direct giving until they are married with children of their own. You can help with school, help with down payment, first car, etc, but don’t give them money until they are more established. The risk is all your money ends up their nose if they are given a lot of money too soon.

If someone gave me $2mm when I was 25, it would have been a disaster. If someone gave me $2mm now, it would become part of my portfolio.

it depends upon your kids and their level of responsibility in life and fiscal responsibility.

Both of my kids, I could give it to them at 25 and they would be fine. One is 25 and is frugal and invests 99% of what we give them. The other is 21 and equally responsible, just doesn't have as much yet, because they don't have much w2 income (we gift initially to match IRA and 401k and let them save the rest in regular investment. )

But yes, I have a sibling, who if they were ever given $1M (even at almost 60) they would blow thru it immediately. Whereas I would have just invested it at 22 even.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would teach my kids about no free money even though you know there will be free money.
I would also teach my kids about responsible spending as they start making money while in college. Teach them some investment techniques, trusts, life insurance and many more things. Expose them to reading about managing and investing. And when they do get the money, they don't go spending it frivolously. Also, teach them to find friends and partners that are not all about money, especially the spouse because there will be major friction if the spouse knows you will be getting that much in inheritance.

And I would not tell my kids they will get that much. I would not even mention the amount. If they ask, I would just say you may be getting something but I don't know how much.

I agree with most of this but once your kids are in their mid 30’s I think it is helpful for them to get a good sense for what might be on the horizon. This is helpful for them with their own planning for education and retirement planning. My parents never did this because their estate wasn’t large enough plus they had six children. Our kids are married, very responsible with good jobs so we can be more transparent with them than others might be.

This^^^. We are doing it sooner. I want my kids to know they don't have to worry about saving for their kid's education or for a massive downpayment. That coupled with us paying for college 100% means they are already very privileged and way ahead. But thankfully they largely save it. We want them to be able to take a job they love, even if it means slightly lower salary, and to buy that house in the great school district that means both mom and dad have a 10-15 min commute and thus more family time. What we don't want is for them to have no career aspirations and to waste away $$$$$ on just silly things. But the money will always be there for education, down payment (with in reason) and medical needs. But we already know they have great career aspirations and work hard. They live a comfortable life and largely save save save.
If we had a kid who wanted to spend $150K on a sports car at age 25, yet they only make $50K/year, we probably wouldn't gift them much money at that age. But if they are earning $600K/year and want to spend on that that is their choice

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would teach my kids about no free money even though you know there will be free money.
I would also teach my kids about responsible spending as they start making money while in college. Teach them some investment techniques, trusts, life insurance and many more things. Expose them to reading about managing and investing. And when they do get the money, they don't go spending it frivolously. Also, teach them to find friends and partners that are not all about money, especially the spouse because there will be major friction if the spouse knows you will be getting that much in inheritance.

And I would not tell my kids they will get that much. I would not even mention the amount. If they ask, I would just say you may be getting something but I don't know how much.

I agree with most of this but once your kids are in their mid 30’s I think it is helpful for them to get a good sense for what might be on the horizon. This is helpful for them with their own planning for education and retirement planning. My parents never did this because their estate wasn’t large enough plus they had six children. Our kids are married, very responsible with good jobs so we can be more transparent with them than others might be.

This^^^. We are doing it sooner. I want my kids to know they don't have to worry about saving for their kid's education or for a massive downpayment. That coupled with us paying for college 100% means they are already very privileged and way ahead. But thankfully they largely save it. We want them to be able to take a job they love, even if it means slightly lower salary, and to buy that house in the great school district that means both mom and dad have a 10-15 min commute and thus more family time. What we don't want is for them to have no career aspirations and to waste away $$$$$ on just silly things. But the money will always be there for education, down payment (with in reason) and medical needs. But we already know they have great career aspirations and work hard. They live a comfortable life and largely save save save.
If we had a kid who wanted to spend $150K on a sports car at age 25, yet they only make $50K/year, we probably wouldn't gift them much money at that age. But if they are earning $600K/year and want to spend on that that is their choice

If my kid made $600k and spent $150k on a new car I’d assume he never learned anything from me. That’s not the way to build net worth. I made $900k just in dividends last year (I know this because I just completed our taxes) and I wouldn’t spend $150k on a new car.

[Anonymous]

We had an attorney who wanted us to provide the equivalent of a salary to each of our daughters in the event they wanted to SAHM.

(We only have daughters).

I couldn’t wrap my head around that. The lawyer thought it prevented husbands from “controlling the money since they made the income.”