How to make this fair: gifting to kids with different means

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BuckyBadger
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How to make this fair: gifting to kids with different means

Post by BuckyBadger » Fri Feb 06, 2015 12:25 pm

Lets say you want to start gifting to your kids before your death. You're a little hesitant to give too much away, though, as you're still healthy and active. If you need all your money then this all comes off the table and you spend your money!

Your kids a quite different - one went in a "traditional" track and makes quite a bit of money and saves a lot (kid A), one had more trouble settling down and makes enough to have a perfectly decent life but you'd like to encourage that one to save more (kid B).

You want to give the kid B enough money to fund a Roth every year (assume that the child does this as encouraged). Kid A doesn't really "need" that money right now (is saving WELL more than that amount already without parental help) but you want to make it fair in the end by bequesting more to kid A to make up for the previous yearly gifts to kid B. Parental intent is to not "punish" kid A for making more money that kid B - just to help out kid B earlier in life.

How would you do this to be fair to kid A in 20 or so years? Would it matter that kid B's gift money had been invested for that much time, or not because kid A is also investing that much and more for those 20 years and money is fungible? I really can't decide...

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Toons
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Re: How to make this fair: gifting to kids with different me

Post by Toons » Fri Feb 06, 2015 12:28 pm

"Your kids a quite different - one went in a "traditional" track and makes quite a bit of money and saves a lot (kid A), one had more trouble settling down and makes enough to have a perfectly decent life but you'd like to encourage that one to save more (kid B)."


Speaking for myself I would give them equal amounts,regardless,a gift means just that.It is their money to do as they please. :happy
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JDCarpenter
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Re: How to make this fair: gifting to kids with different me

Post by JDCarpenter » Fri Feb 06, 2015 12:31 pm

In an analogous situation, I've toyed with the thought of setting up a small IRA naming the "Kid A" as the sole beneficiary. That way you've got the money if you need it, but s/he gets the same "fair share" as sibling, with market rate of return if invested in broad index. Situation hasn't arisen yet for us though (and may not) ....

So far, we've just made equal small gifts, even to the one whose response was "Thanks, but what am I going to do with this?" :-)
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Jonathan
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Re: How to make this fair: gifting to kids with different me

Post by Jonathan » Fri Feb 06, 2015 12:50 pm

"Trouble settling down" usually implies to me that Kid B was having fun while Kid A was working towards his future. Nothing wrong with that, but, if it's true, then it's going to be very difficult to give asymmetric gifts without punishing Kid A for being more responsible.

Your example doesn't mention whether these kids currently have or are planning to have their own kids. If so, one strategy might be to setup something by which the grandchildren are given gifts, and not the children. As a broad example, if a grandparent were to offer to pay for all grandkids' educations, even if one kid has 4 kids of his own, and the other only has 1, I believe it would be less likely to be perceived as unfair. It also incentivizes the production of additional grandchildren.

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Re: How to make this fair: gifting to kids with different me

Post by BigJohn » Fri Feb 06, 2015 12:56 pm

Toons wrote:Speaking for myself I would give them equal amounts,regardless,a gift means just that.It is their money to do as they please.
+1

jstrazzere
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Re: How to make this fair: gifting to kids with different me

Post by jstrazzere » Fri Feb 06, 2015 12:57 pm

Parental intent is to not "punish" kid A for making more money that kid B - just to help out kid B earlier in life.

How would you do this to be fair to kid A in 20 or so years? Would it matter that kid B's gift money had been invested for that much time, or not because kid A is also investing that much and more for those 20 years and money is fungible? I really can't decide...
I don't believe it's mandatory (or even important) to balance out gifts to our children. Some may get more, some may get less - so it goes.

That said, if you feel the need to balance out your equation, just take the same amounts you gift to kid B, and set them aside in a separate account for Kid A. You could choose to put it in a trust. No need to notify either A or B what you have done, until you are gone.

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Watty
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Re: How to make this fair: gifting to kids with different me

Post by Watty » Fri Feb 06, 2015 1:23 pm

One thing that you might consider doing is to set you accounts up so that the higher incomer person would inherit a Roth account, and the lower income person would inherit a taxable IRA. With their differences in tax rates they could end up with roughly equal spendable money that way.

BuckyBadger wrote:Lets say you want to start gifting to your kids before your death. You're a little hesitant to give too much away, though, as you're still healthy and active. If you need all your money then this all comes off the table and you spend your money!
Unless you are in a situation where you could live to be 105 and still have plenty of money even if your investments do terrible then it would be too early to start giving them much money. The odds of it are remote but it is not impossible that you might need to live in a Alzheimer's center for a long time and that could be expensive. In the worse case you could give money to one kid now, then the other one ends up having to support you someday.

I know several people that are having to financially support their parents and that situation is hard on both the parent and kid. One of the best gifts you could give your kids now is to be financially secure enough that they never have to worry about supporting you.

BuckyBadger wrote:You want to give the kid B enough money to fund a Roth every year
Looking at the math it might be better to keep the money and let them inherit it some day. If the money is in a taxable account now then they could inherit it someday at a stepped up cost basis, or it might delay you needing to spend down your retirement accounts. If it is in a retirement account now you might have to pay taxes on it now to free up the money to give to them.

There is also a chance that if they end up getting divorced or dying before you then their ex might get half or all of the Roth

If you do want to give them a significant amount of money it would be best to get professional estate planning to find out the best way to handle it.

barnaclebob
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Re: How to make this fair: gifting to kids with different me

Post by barnaclebob » Fri Feb 06, 2015 1:28 pm

Seeming as you know enough about your kids finances you may want to just ask what they would prefer. Kid A is probably smart enough to know that its better to inherit the money to get a step up in basis.

derosa
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Re: How to make this fair: gifting to kids with different me

Post by derosa » Fri Feb 06, 2015 1:33 pm

The kids are equal right - you and your wife both contributed 50/50 to them.

A gift is a gift.

You give the same to both with no strings attached. If you do anything else you are playing games - games with your kids and games with yourself.

Who is to say that child that had trouble settling down (your words) isn't your fault as a parent? Ohhh my.

What is to say that in 5 or 10 years the situation is significantly reversed? Now where are you - taking money away from one and giving to the other? What a mess.

Give the same to both. You don't ask what they do with it. Once a gift is given it is no longer yours.

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Re: How to make this fair: gifting to kids with different me

Post by ShiftF5 » Fri Feb 06, 2015 1:35 pm

Another vote for equal amounts. Anything different can have serious unintended consequences.

anil686
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Re: How to make this fair: gifting to kids with different me

Post by anil686 » Fri Feb 06, 2015 1:39 pm

+5 on the equal amounts and agree that I see a fair number of families have issues after a loved one passes due to these arrangements. It seems like equal ends up the best as it is hard to argue favoritism wrt this IMO...

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Re: How to make this fair: gifting to kids with different me

Post by choices » Fri Feb 06, 2015 1:44 pm

I'm also for equal amts. We have a kid who did everything right, one who is now very stable and another who may finally be on the right path. I have set up a 2050 account POD for each. If I need to raid them, I can. I can also add to the accounts and move them around. It ain't easy to be a parent, those little suckers did not come with instructions!

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Re: How to make this fair: gifting to kids with different me

Post by Van » Fri Feb 06, 2015 1:45 pm

It also incentivizes the production of additional grandchildren.[/quote]

Apparently you think this is a good thing. IMHO, the world is over populated already.

letsgobobby
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Re: How to make this fair: gifting to kids with different me

Post by letsgobobby » Fri Feb 06, 2015 1:47 pm

We plan to give equally, with the possibility that truly extenuating unlucky circumstances would change things - major medical, disability, divorce with kids, etc. We wouldn't give differently based on career choice, how good they are with money, etc.

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Re: How to make this fair: gifting to kids with different me

Post by JW-Retired » Fri Feb 06, 2015 1:49 pm

BuckyBadger wrote:Lets say you want to start gifting to your kids before your death. You're a little hesitant to give too much away, though, as you're still healthy and active. If you need all your money then this all comes off the table and you spend your money!

Your kids a quite different - one went in a "traditional" track and makes quite a bit of money and saves a lot (kid A), one had more trouble settling down and makes enough to have a perfectly decent life but you'd like to encourage that one to save more (kid B).

You want to give the kid B enough money to fund a Roth every year (assume that the child does this as encouraged). Kid A doesn't really "need" that money right now (is saving WELL more than that amount already without parental help) but you want to make it fair in the end by bequesting more to kid A to make up for the previous yearly gifts to kid B. Parental intent is to not "punish" kid A for making more money that kid B - just to help out kid B earlier in life.

How would you do this to be fair to kid A in 20 or so years? Would it matter that kid B's gift money had been invested for that much time, or not because kid A is also investing that much and more for those 20 years and money is fungible? I really can't decide...
We annually gift IRA contributions and more to the kids. One needs it more than others but we do precisely equal gifts to all. We think that's the only way to avoid possible hurt feelings.

IMO, a promise to even it all up 20 years later wouldn't mean very much to a kid A.
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john94549
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Re: How to make this fair: gifting to kids with different me

Post by john94549 » Fri Feb 06, 2015 1:50 pm

We have two beautiful and wonderful (and responsible) children, both with families of unequal size. Until very recently, one had three children (our grand-children) and one had one child (now, recently, two). The quandary came (always) at Christmas. Should we, in effect, penalize the three grand-children by buying them the total same amount as the one grand-child in the other family? We solved the problem by allocating an equal amount to each family, and an equal amount to each grand-child.* In effect, the more prolific parents took the hit, not their children.

That said, as a general rule, allocating equally to each child, or each child's family, is what I would suggest.

*E.g., $1000 to each family in total. Family with three children, $200/grandchild and $400 to their parents. Family with one (now two), $200 to the grand-child, the balance to the parents.

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Re: How to make this fair: gifting to kids with different me

Post by GoldenFinch » Fri Feb 06, 2015 2:04 pm

Equal is best. Unequal can lead to unintended and unspoken negative feelings among siblings.

You also don't want to enable less-resposible-kid's behavior. Those who are enabled, usually only learn there is someone who will bail them out.

One way to help is to try to educate him or her about finances.

Also remember the kid is an adult. :D

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Re: How to make this fair: gifting to kids with different me

Post by randomguy » Fri Feb 06, 2015 2:18 pm

john94549 wrote:We have two beautiful and wonderful (and responsible) children, both with families of unequal size. Until very recently, one had three children (our grand-children) and one had one child (now, recently, two). The quandary came (always) at Christmas. Should we, in effect, penalize the three grand-children by buying them the total same amount as the one grand-child in the other family? We solved the problem by allocating an equal amount to each family, and an equal amount to each grand-child.* In effect, the more prolific parents took the hit, not their children.

That said, as a general rule, allocating equally to each child, or each child's family, is what I would suggest.

*E.g., $1000 to each family in total. Family with three children, $200/grandchild and $400 to their parents. Family with one (now two), $200 to the grand-child, the balance to the parents.
I am perfectly happy with the solution of giving each kid the same amount of money and each grand kid the same. Personally if anyone complained that their siblings family got 1600 spend on them and their family only got 1200 because they had 2 less kids, I would solve the problem by spending 200 on that family next year.

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Re: How to make this fair: gifting to kids with different me

Post by LeeMKE » Fri Feb 06, 2015 2:19 pm

We have two beautiful and wonderful (and responsible) children, both with families of unequal size. Until very recently, one had three children (our grand-children) and one had one child (now, recently, two). The quandary came (always) at Christmas. Should we, in effect, penalize the three grand-children by buying them the total same amount as the one grand-child in the other family? We solved the problem by allocating an equal amount to each family, and an equal amount to each grand-child.* In effect, the more prolific parents took the hit, not their children.

That said, as a general rule, allocating equally to each child, or each child's family, is what I would suggest.

*E.g., $1000 to each family in total. Family with three children, $200/grandchild and $400 to their parents. Family with one (now two), $200 to the grand-child, the balance to the parents.
I really like the logic of John94549. This seems such an elegant, easy and fair approach.
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letsgobobby
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Re: How to make this fair: gifting to kids with different me

Post by letsgobobby » Fri Feb 06, 2015 2:23 pm

When my grandfather died he left:

$60,000 to each of 3 adult children
$30,000 to each of 4 adult grandchildren

one of his kids has no children. So each "family" did not get the same amount (two got $120k, one got $60k), yet it all seemed equitable and nobody complained.

Regarding the Christmas gift giving, I would not consider giving less to a child because he had more siblings. That's almost weird to me. Also I wouldn't give gifts to my adult children, and we've asked our parents for years to stop sending us gifts. We're too old for this.

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Re: How to make this fair: gifting to kids with different me

Post by tyrion » Fri Feb 06, 2015 2:24 pm

As an *underachieving* child, I had no problems telling my parents they should provide for us equally in all cases - inheritance, yearly gifts, whatever.

I personally think splitting Christmas gifts by family is going a bit far. I would think giving each person an equivalent present would be sufficiently fair, no need to penalize the parents who had additional children (or reward those who didn't)

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Re: How to make this fair: gifting to kids with different me

Post by Cuzz35 » Fri Feb 06, 2015 2:31 pm

As a person with siblings, I would have no qualms with my parents giving more money to my brothers if I were well off on my own and the others were not. I don't understand how that is punishing to the child who is doing better. I suppose it depends on the magnitude of the gifts and wealth and income differentials.

Child A makes $1 million a year, and has millions in savings.

Child B makes less than 6 figures but works hard and just wants to provide for his family.

If your gift is $20k to each, I would think it would matter very little to Child A if you gave all $40k to Child B. However, Child B might be a little troubled if you gave Child A a $20k share.

However, if you're giving $1 or $2 million each, I would say split it 50/50.

Just my take. I don't think there is a right or wrong answer.

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Re: How to make this fair: gifting to kids with different me

Post by Independent » Fri Feb 06, 2015 2:32 pm

We've got a similar problem, but it's three kids instead of two.

In our case, it's not just a "lifestyle choice", it's brain chemistry the kid didn't ask for.

We've provided some financial support for C while we've been alive, that didn't go to A or B. Yet, the current will says the remaining money will be shared equally. No trust in the will, but I think C would be reasonable with a lump sum today, given C's current circumstances.

The only thing I know for sure is that I don't have a magic formula.

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BL
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Re: How to make this fair: gifting to kids with different me

Post by BL » Fri Feb 06, 2015 2:34 pm

At Christmas we give equal amounts to each child and equal amounts to each grandchild (including steps).

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Steelersfan
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Re: How to make this fair: gifting to kids with different me

Post by Steelersfan » Fri Feb 06, 2015 2:35 pm

I vote for equal, which is what I do.

Two kids who are dual income families with kids. They put their gift money into 529 plans for their kids. I think. That's what they've said.

Third kid is single and likes to travel. She uses her's for that, maybe saves a little too. Maybe not.

It's their life to figure out and live. I'm just glad I can help them out a little along the way.

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Re: How to make this fair: gifting to kids with different me

Post by Pat » Fri Feb 06, 2015 2:41 pm

choices wrote:I'm also for equal amts. We have a kid who did everything right, one who is now very stable and another who may finally be on the right path. I have set up a 2050 account POD for each. If I need to raid them, I can. I can also add to the accounts and move them around. It ain't easy to be a parent, those little suckers did not come with instructions!

What is a 2050 Account?

choices
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Re: How to make this fair: gifting to kids with different me

Post by choices » Fri Feb 06, 2015 4:01 pm

Pat, it is a target date fund . Should have been more precise.

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StormShadow
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Re: How to make this fair: gifting to kids with different me

Post by StormShadow » Fri Feb 06, 2015 4:21 pm

Toons wrote:"Your kids a quite different - one went in a "traditional" track and makes quite a bit of money and saves a lot (kid A), one had more trouble settling down and makes enough to have a perfectly decent life but you'd like to encourage that one to save more (kid B)."

Speaking for myself I would give them equal amounts,regardless,a gift means just that.It is their money to do as they please. :happy
+1

Kid A may just give the money back. Let them decide. Best way to maintain peace and harmony among the siblings.

With regard to trouble settling down, I plan to keep my home open to my (future) kids to stay as long as they want. :beer

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Re: How to make this fair: gifting to kids with different me

Post by Jeff7 » Fri Feb 06, 2015 4:41 pm

Speaking here as a "differently-meaned" kid, it is likely going to depend a lot on them.

- I graduated and went right into the job market, working in engineering. Student loans were fully paid off in under 3 years, 401k and Roth are maxed yearly, new car that's paid for, etc etc.
- Sister is going for a Ph.D. She got plenty of scholarships, but also has a lot more debt than I ever had.

As a result, monetary gifts from our parents have tended to favor her.


The thing is, I'm fine with that arrangement.
1) I value post-grad degrees in the sciences, so I'm glad she's pursuing that route.
2) I'm in a better financial position than she is. Right now, she would value a gift of $50 far more than I would. So, it simply makes more sense to funnel more money in her direction.
3) Student loans at 6.8%. Ugh. Anything to help pay those down is a bonus.

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Re: How to make this fair: gifting to kids with different me

Post by Gnirk » Fri Feb 06, 2015 4:50 pm

We always keep it equal. I've seen too many hurt feelings when done otherwise.

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Re: How to make this fair: gifting to kids with different me

Post by dolphinsaremammals » Fri Feb 06, 2015 5:06 pm

letsgobobby wrote:
Regarding the Christmas gift giving, I would not consider giving less to a child because he had more siblings. That's almost weird to me.
I would not do that either.

In terms of inheritances, my sibs are in line for equal amounts from me, regardless of the number of children they have. Both are doing reasonably okay, one better than the other. I suppose if one were in dire straits, I would have to figure out something, but I think the other would be okay with that.

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Re: How to make this fair: gifting to kids with different me

Post by surfstar » Fri Feb 06, 2015 5:06 pm

Ask kid "A" about it.
As the one of three who is doing better financially than my siblings, I am all for them getting any extra help and none for me. I'm fine and happy with what I have, and if I made a good bit more, I'd be more inclined to help my siblings out vs keep it for myself.

Make it "progressive" and say you modeled your system after the IRS. Its your money, though, so you are free to do with, as you please.
Again, maybe kid "A", if asked, would say "I'm good, why don't you give my portion to ___ (charity)".

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Re: How to make this fair: gifting to kids with different me

Post by Meg77 » Fri Feb 06, 2015 5:11 pm

I haven't read all the responses, but in my family this has always been handled by giving equal amounts. You'll drive yourself crazy trying to figure out who "deserves" what. Besides fortunes can turn. What if kid B strikes it rich later or marries well, and kid A loses it all in a horrific divorce or gets disabled? Besides, if you plan to make it even for kid A later in life with your estate anyway then why not just make it even from the beginning?

My grandparents had four kids and simply gave the maximum allowable amount to each kid and his or her spouse every year for about a decade starting in the late 90s. When the economy got tough they quit giving for awhile, then they did a few sporadic larger gifts in the last few years. My parents have 4 kids too and have always treated us as close to exactly the same as possible. The oldest got a used Volvo at graduation and each other kid got the same make and model the same number of years old at their graduations. The first to marry spent X, and the other three of us got exactly X to spend when we got engaged. Etc. We've always all appreciated the fairness, and even though we all make different amounts and live in different parts of the country, keeping dollar amounts equal prevents resentment or feelings of inadequacy among us siblings.

I vote that you just start giving each kid $5500 a year (or whatever amount you can afford right now or want to give) and tell them the idea is that it's enough to fund a Roth IRA or backdoor Roth IRA. What they do with it is their choice of course, but whether you continue to give each year is up to you too.
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Re: How to make this fair: gifting to kids with different me

Post by FelixTheCat » Fri Feb 06, 2015 5:15 pm

Toons wrote:Speaking for myself I would give them equal amounts,regardless,a gift means just that.It is their money to do as they please.
+1 I would give to the kids equally.
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Re: How to make this fair: gifting to kids with different me

Post by DonCamillo » Fri Feb 06, 2015 9:13 pm

letsgobobby wrote:When my grandfather died he left:

$30,000 to each of 4 adult grandchildren

one of his kids has no children. So each "family" did not get the same amount (two got $120k, one got $60k), yet it all seemed equitable and nobody complained.
Significant bequests may be okay for grandchildren, if their parents are past childbearing age. I think it is crazy for great-grandchildren.

My father left somewhat more than that to each of 9 grandchildren and 6 great-grandchildren. All of his children were somewhat uncomfortable with the gifts to the great-grandchildren, because it benefited the babies and toddlers he knew over those who would be born later. The two oldest children, which included me, were favored because we had all six grandchildren. One of our younger siblings has since had two grandchildren, and the youngest still has unmarried children in college. Both of us older siblings have since had more grandchildren. We have no idea how many more will come in the future. I plan to set aside a roughly equal amount for my grandchild that did not get a bequest. I assume that child will not be out of college by the time I die, so I will just keep the money in a separate account at my broker with the youngest child as the beneficiary.
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Re: How to make this fair: gifting to kids with different me

Post by ralph124cf » Fri Feb 06, 2015 9:44 pm

If one child is an investment banker and the other is a social worker or public school teacher, then I would certainly give to the lower paid one. How much of an income discrepancy before doing this is a judgement call.

Ralph

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Re: How to make this fair: gifting to kids with different me

Post by Statch » Fri Feb 06, 2015 9:49 pm

Independent wrote:We've got a similar problem, but it's three kids instead of two.

In our case, it's not just a "lifestyle choice", it's brain chemistry the kid didn't ask for.
This is the situation with relatives. The parents are leaving the money in equal amounts for each child, but one child will also get the house free and clear to make sure she has a place to live. The other kids know this up front and don't have a problem with it (and some will probably give her at least part of their share).

I don't think giving different amounts to the kids based on their means is a good idea...just setting up problems for the future.

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Re: How to make this fair: gifting to kids with different me

Post by Alchemist » Fri Feb 06, 2015 11:19 pm

Have you considered not giving gifts of cash at all? Maybe take the family on a vacation instead? My parents did something like that when they officially retired. Paid for me and both my brothers to go spend a week with them (and all the grandkids of course) in a group of cabins in the mountains. I myself enjoyed that experience way more than I would a check from mom and dad.

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Re: How to make this fair: gifting to kids with different me

Post by stlutz » Fri Feb 06, 2015 11:29 pm

Have you considered not giving gifts of cash at all? Maybe take the family on a vacation instead? My parents did something like that when they officially retired. Paid for me and both my brothers to go spend a week with them (and all the grandkids of course) in a group of cabins in the mountains.
For many families, this sounds like a setup for a reality show gone bad. :D

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Re: How to make this fair: gifting to kids with different me

Post by TravelforFun » Sat Feb 07, 2015 12:03 am

Our kids are all different. Two are more successful than the third one and we give them differently.

So in this example, I would explain to A that we're so proud of his/her accomplishment and wish that B had been more accomplished but since he/she is not, we feel we would need to help him/her a little more. Hey, it's our money!

denovo
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Re: How to make this fair: gifting to kids with different me

Post by denovo » Sat Feb 07, 2015 12:07 am

I know some families where some children were better off financially and actually requested that the parent leave the inheritance to the children that were less well off, no ill feeling. Maybe your kids feel differently.
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Re: How to make this fair: gifting to kids with different me

Post by TradingPlaces » Sat Feb 07, 2015 12:53 am

Have you asked the kids if they want the gift?

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Re: How to make this fair: gifting to kids with different me

Post by stilts1007 » Sat Feb 07, 2015 1:28 am

I would think about it as a "want" vs "need thing too..If child A is doing fine while child B is struggling to make ends meet for his/her family, then some extra money child B's way is fine, and I would hope that child A would, in the spirit of sibling-ship, be OK with that. If you are just giving fun money or estate money, it seems reasonable that it should be equal.
My older sister is in a low-paying job field and has had some substantial health problems (along with crappy insurance from her low-paying-field job). I know our parents help her and her family out from time to time, and I'm glad they do. They don't give me financial support beyond the small birthday/xmas presents, and I don't expect or want them to do anything beyond that.
I think if it were a matter of "want" instead of "need" with my sister I might feel a little jealous that it seems they were favoring her, regardless of whether they promised to "make it up" to me in 20 years or not.

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Re: How to make this fair: gifting to kids with different me

Post by ccieemeritus » Sat Feb 07, 2015 1:59 am

I am kid a.

My sister is kid c (total financial disaster, even after significant extra support from parents).

I have no objections to my parents helping sis/kid c more than me (no need to point out the dangers of "help" enabling further bad financial decisions--that's not the subject of this thread).

So +1 to asking kid a about whether it is necessary to be "fair".

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Re: How to make this fair: gifting to kids with different me

Post by investingdad » Sat Feb 07, 2015 8:38 am

My kids are in grade school right now, but if this situation arises for my wife and I...we'd gift them the same.

My wife and her brother are very close to what the OP describes. In this case, we already know that her parents intend to give us certain items of value rather than money. Which is fine for us because we do not need or expect inheritance.

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Re: How to make this fair: gifting to kids with different me

Post by Mike Scott » Sat Feb 07, 2015 9:30 am

A different approach advocated by someone I listen to is that since their kids are all adults and stable they have told the kids that they will get very little inheritance. The bulk of the inheritance will go to charity. Gifts are given by choice and current need without undermining the family members. This requires that you know your family fairly well. Fair in one family may mean that a special needs child gets everything in trust for their lifetime care. In another family fair may mean that none of them need it and it all goes to charity. Also remember that whatever you decide today can be changed as time goes by and circumstances change. The bottom line is that it is your money and you get to decide what to do with it.

In my family, I expect nothing because I am responsible for myself and my family (and there is nothing to inherit). My dad has surprised us by giving our kids some small amounts of money to help with college expenses. Giving these gifts has given him great pleasure. My inlaws surprised us a few years ago by telling us that they had been holding a small amount of money for my wife from some relative who died several years ago. We told them to keep it and get the roof on their house fixed.

I am a strong advocate for teaching kids how to make their own way in life and then staying out of their business and letting them do it. After arrangements are made to take care of my wife long term; we may decide to give some gifts while we are alive but there will not be much left after that.
Last edited by Mike Scott on Sat Feb 07, 2015 9:50 am, edited 1 time in total.

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Re: How to make this fair: gifting to kids with different me

Post by adam1712 » Sat Feb 07, 2015 9:39 am

In my experience, it's impossible to be perfectly fair. For my two siblings and me, things improved when my parents dropped the idea of some ledger that equaled out. Instead seeking to help out when they saw the opportunity and being open and honest about their intentions and reasoning. This showed they cared about and viewed us equally more than some ledger could.

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Re: How to make this fair: gifting to kids with different me

Post by BuckyBadger » Mon Feb 09, 2015 9:21 am

Thanks for the replies, everyone. I'm actually "kid A" and it's my father who is trying to come up with a way to make everything fair - or at least as equal as possible.

Looks like there is no simple answer - I'll keep telling him that whatever he does will be fine, but it's up to him how much he stresses over it I suppose.

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Re: How to make this fair: gifting to kids with different me

Post by Dandy » Mon Feb 09, 2015 9:58 am

Fair is not always simple or automatically mean equal. One child may need tutoring another may not. Should I give some money to the child that didn't need tutoring -- to be fair? One may get a scholarship the other may not. Should I give the amount needed to send the non scholarship child to the scholarship student -- just to be fair?

I focus on what my children need not the equality of my time or money. My married daughter had two older cars and have a bit of a financial strain with a house and 2 young children. I wanted them to get a safer car to transport them and my grandchildren - gave them some money. Spend time minding grandkids on occasion when they need it and helped them with down payment on a house. The other daughter I'm helping with grad school and funding her Roth since her artistic career was a dream fulfilled but not a money maker. Help pay for health insurance while she needed it.

The key to me is that both are responsible adults especially with money. So I don't keep track of making sure the money, time and favors are equal. Neither should have any complaints.

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Re: How to make this fair: gifting to kids with different me

Post by lthenderson » Mon Feb 09, 2015 10:16 am

I'm kid A and my brother is kid B. My parents wanted to help my brother out with a significant gift once but they sat down with me to explain their reasoning first and making sure I was okay with it. I think I was in my 20's at the time. I was happy to agree with them because I didn't need the money and I knew it would perhaps make his life easier. They gave him the gift and I got their gratitude.

Now twenty years later, my brother is also a kid A having learned the value of what some money stashed away for 20 years can do. It reaffirms that it was the right decision.

If I'm in that situation, I would consider unequal gifts but I would set down with kid A first to make sure there wouldn't be any hard feelings. Hopefully both of my kids will end up as A kids and I won't have to worry about it.

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