Anonymous wrote:I would open a brokerage account and invest it. If you gift it to them, it’s their money to do with as they wish. Please don’t try to put strings on your gift.

Anonymous wrote:

Anonymous wrote:Thanks, all. This is OP. This was very useful. We will set it up in kid’s name only and tell of its existence but talk about benefits of not touching it and letting it grow until it’s needed for something bigger. That was useful information about how a joint account could run into tax issues so we won’t do it that way.

OP, what’s the size of your estate? There’s a lot of confusion out there about the annual gift tax exemption. Going over it doesn’t mean you owe any taxes. It just means you fill out one form and the overage counts towards your lifetime exemption of $15m for each spouse.

So if your joint assets are likely to stay under $30m, don’t sweat it, you can just give them the whole down payment when the time comes and fill out the one form and not owe any taxes ever anyway. They don’t pay taxes on it no matter the amount.

I have a personal philosophy having watched this play out across my extended family that you should not give gifts to adult children with strings. Because it won’t work anyway and it will damage your relationship and cause problems in their marriage too. Either don’t give them anything, which is valid, or give them gifts without strings and let them f$& up if they’re going to.

The middle ground would be a trust with a generous HEMS clause, but frankly I think you shouldn’t do that unless you need it for taxes.

If your child is so nonfunctional that you need to buy them a house without giving them a gift and letting them decide that’s what they should do (even if you say that’s your suggestion), buy the house and let them stay there as a tenant.

Anonymous wrote:

Anonymous wrote:I struggle with this idea. My kids are teens, so I haven't really put too much thought into this yet, but I worry that I would spoil them in adulthood by gifting them all this money. In one hand I would say if its a gift, then you give them a check and take the risk they blow it or it demotivates them in their career. I think my approach would be a matching system. They have a goal such as save for a house, pay down a debt, or build a nest egg, and I match up to the gift amount each year. That way there is incentive for them to make the best use of it.

Call me when you find a family where this worked well. I can think of one, and they’re all doctors. The parents and the kids. Highly motivated, high achieving, regimented, and inclined to authoritative systems.

Any family where someone actually needs an “incentive” to “make the best use,” it doesn’t work at all and strains relationships.

If you’re using money to try to control your adult children, you’re either forcing them to stay in “child” mode (which we’ve all seen among the adult children of rich people) or they will be seething on the inside or they will have to say “no thank you” and forge their own path. It’s worse for boys.

I’m often in “child mode” with my wealthy parents. It’s corrosive! I manage it okay I think, and I honestly think it helps that I’m a woman and am the caregiver type anyway. Plus clearly, I’m “paid” really well. It’s been harder for my brother. And for some of our cousins, it’s really bad.

Give the money or don’t give the money. Don’t try to use it as a carrot or a stick. It won’t work.

Anonymous wrote:For DC's house purchase, we waited until they talked of looking. We then mentioned a gift and roughly the amount. The decisions they made would not have been the decisions I would have made re: timing, location, downpayment. But that's ok.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I struggle with this idea. My kids are teens, so I haven't really put too much thought into this yet, but I worry that I would spoil them in adulthood by gifting them all this money. In one hand I would say if its a gift, then you give them a check and take the risk they blow it or it demotivates them in their career. I think my approach would be a matching system. They have a goal such as save for a house, pay down a debt, or build a nest egg, and I match up to the gift amount each year. That way there is incentive for them to make the best use of it.

Call me when you find a family where this worked well. I can think of one, and they’re all doctors. The parents and the kids. Highly motivated, high achieving, regimented, and inclined to authoritative systems.

Any family where someone actually needs an “incentive” to “make the best use,” it doesn’t work at all and strains relationships.

If you’re using money to try to control your adult children, you’re either forcing them to stay in “child” mode (which we’ve all seen among the adult children of rich people) or they will be seething on the inside or they will have to say “no thank you” and forge their own path. It’s worse for boys.

I’m often in “child mode” with my wealthy parents. It’s corrosive! I manage it okay I think, and I honestly think it helps that I’m a woman and am the caregiver type anyway. Plus clearly, I’m “paid” really well. It’s been harder for my brother. And for some of our cousins, it’s really bad.

Give the money or don’t give the money. Don’t try to use it as a carrot or a stick. It won’t work.

Thats why I say its tied to a goal they have, not one that I have. If they have no goals then there is no discussion about it.

But I also think if I gave all my kids $20k per year each no strings attached and they disrespected me, there would be more relationship strain there, dont you think? So it seems better to just not gift anything at all and just let the money flow when I die?

Yes, I think it’s better for your case to not give them money and just work on your relationship with them as adults. I think it sounds like it’s already kind of dysfunctional. You’re their mom, you shouldn’t be buying respect for $20k a year.