Giving kids a down payment

[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.

[Anonymous]

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

Love this!

[Anonymous]

This is going to be so specific to each child.
-are their strings attached? What if the child divorces and their spouse gets the house?
-is it tied to anything like marriage or children?
-I’ve had friends give 15k a year (30k from the dad and mom combined to the kid) so there aren’t tax implications. If married you can double that.
-what if one kid refuses to buy a house? This happened with my sister. My parents tried to give her 250k, which was half of a sfh in her cheaper state and she refused. I took the help however.

[Anonymous]

Anonymous wrote: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.

Best friend had a trust like this. It’s the only reason she was able to have 3 kids and stay at home to raise them.

[Anonymous]

Anonymous wrote:

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.

Why does it matter the form of how your kid puts a roof over their head? Her nieces and nephews would still have a roof over their heads if that kid rented.

This is what I don’t get…why wouldn’t you give the equivalent down payment to a child who plans to invest it and rent. That could easily be a better use of money than owning a condo.

[Anonymous]

Too bad the discussion can't be tagged with HNW and see what those under $1m say

[Anonymous]

Anonymous wrote: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.

No

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

Best friend had a trust like this. It’s the only reason she was able to have 3 kids and stay at home to raise them.

No this is giving the money away, not a trust for like your friend has.

[Anonymous]

My parents helped us, their parents helped them, and we will be helping our kids. This practice is pretty normal on both sides of my family.

We are planning on helping with about 100k for each child in today’s dollars.

[Anonymous]

Anonymous wrote:

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.

I totally agree but that’s part of why I don’t get the first PP’s suggestion that saving for a wedding is a sign you are ready to get married. One couple could get married at the courthouse and have people over for dinner and another couple could have 150 relatives at a sit down dinner and neither indicates anything about their readiness for marriage, or even their financial smarts.

[Anonymous]

we have a brokerage account for each kid we have been investing in since they were in middle school. We will keep adding to that as long as we can. However much money is in there at the time they need it will be theirs. could be 50k or 500k, depends on the market.