I’m glad your son was gifted the same amount. He worked hard. My son and I spoke about his needing $ to buy a house. We spoke of an official loan, a private paper, etc. either way, the $ would be co mingled. My lawyer has several children, and offered suggestions that she has used, in case of death or divorce.
I’ve known people where the wealthy parents of the daughter buy a house, but keep it in their name. The SIL pays the mortgage and repairs and updates, but walks out with nothing.
Life is just complicated
Both H’s mom and my parents have helped our siblings over the years. We never needed it and there is no feeling of inequity.
H had the task of getting his mom’s substantial estate into a trust. She was paralyzed because there were many complications and she wanted it to be fair to all. He had to explain to her that it was then the worst case scenario. This was mostly about his mentally ill brother who would likely take his proceeds and buy a private jet or scam craigslist vintage car, when he needs that money to live since he can’t work.
He finally got her onboard when the deal was: let’s do the best we can. We can always change it. H would handle BIL’s disbursements as needed. She had way more money than she could ever spend, but had a depression era mentality that it could all go away. Finally convinced her to gift to the grandkids’ college funds, which ended up being a win-win. She enjoyed being able to help, and the kids all were very gracious and grateful.
In NYS, a house that is jointly owned by a married couple is not necessarily split 50-50 in case of divorce. “Equitable distribution” means that the courts look at who has been the greater contributor, etc.
As opposed to California which is a community property state.
Interestingly, in real life, a few couples broke up immediately upon moving to California because it was massively in one party’s favor to do so.
But me…I would never let one of my siblings, or my spouse’s sibling, help me with a house (unless a loan or an investment). I would be really embarrassed.
In general, I do believe in doling it out equally regardless if Child A makes more than Child B. Child A make make a lot, but may also have more expenses. Child A may have a devasting illness while child B may win the lottery, etc. after I am gone. (But I think Shwbridge’s example if diff than mine.)
So I guess for me, giving or leaving my children equal shares is because I love them equally - it has nothing to do with their financial situations (or how I perceive their financial situations).
As Shawbridge wisely pointed out, you never know what life could throw at you.
Of course, if I had a child with special needs, for example, that is a different story.
I am late to this discussion but here is my story:
My mom was from a hard scrabble background in which education was the way out. She wanted to pay for all of our college and grad school educations then let us make it on our own, barring some big catastrophe. My dad was from a comfortable background and only wanted to pay for what he wanted to pay for (ie school close to home only; he wanted to keep control over us). In the end, they paid for college but not more.
H’s folks were refugees who had lost everything but managed to amass a good amount of wealth over the course of their lives. He is their only child and they poured all their hopes and dreams into him. They paid for everything for him and were very generous about the extras, like a car and nice place to live. They would happily have bought us a house or anything else we wanted when they were alive, but we demurred.
Our kids? We paid and will pay for any higher education. After that, H and I diverge. I want kids to make it on their own. If something big and expensive comes up, and they need help, we can help. But kids should pay for cars, housing, etc. in the absence of some surprise. H is like his folks, very generous, and he will pay for anything and everything. I ended up putting my foot down when S1 was in college because I thought he was living too high. I made him get a job for expenses beyond tuition and rent and basic food costs.
Luckily now they both have jobs and are living on what they make with no help from us. S2 makes a comfortable income, while S1 lives on a public school teacher’s salary. They have not asked for help, but both are single and childless. We will keep negotiating this.
ShawWife and I went to a wedding of a friend’s D. The friend has a few kids from his first marriage and then a couple from the second. We picked something up from the D’s house – doing a favor. While I was sitting outside, I looked the house up on Zillow and it had been purchased a few months ago for over $2.5 MM. We saw the POB (parents of bride) that day (we were dropping of a present) and ShawWife complimented her on how beautiful the house was and MOB volunteered that they had bought a house for each of their kids. That is some serious gifting.
Hope the kids can pay the taxes too!
Reminds me of when Oprah gifted her audience new cars–and then got the backlash because most couldn’t afford the gift tax.
There is no tax payable on receipt of gifts as far as I know. In the US, I thought the tax obligation fell to the grantor of gifts and not the recipient, but there is a $22 M lifetime exclusion at the moment. So my friends have been using up their lifetime exclusion.
Maybe this is different if it is a gift from a relative and a gift from a commercial show like Oprah.
In the case of the latest gift, the house is in a city so the yard is pretty minimal and the house is newly renovated. Property tax is likely substantial. Fortunately, the bride is an associate at a major law firm and the husband does data analytics (or something close, probably not as high-powered as she is but decent income). I think they can cover property tax. They won’t be slackers. They will likely just save what they would have spent for rent/mortgage/accumulation of downpayment.
Now that I’ve recovered my jaw drop at the extravagance of the gift…and wishing I could participate…lol…(although I’m not really sure…)
My questions:
Do you think it was good to gift the couple the house?
Do you think they should’ve “earned” it in some respect?
Do you think they “appreciate” the gift? Or it’s just expected as part of a lifestyle that is engrained by this point?
Do the parents expect “gratitude” in return or certain behavior?
Do you know the aftermath?
My friend (not QUITE in that league) would happily buy her kids a house but it would need to be to “her standards”. Her husband (who could afford whatever) would say NO WAY. Kids need to learn to build their own life. Make their own choices. Earn their own way.
And I side with him. There is a joy in making your own way. But it is almost impossible to get her to see it that way.
(The kids haven’t asked for anything at any time. This is all about mom wanting to give gifts and wanting for her own pleasure to give them things).
No taxes on gifts to the recipients. Oprah gave what was considers a prize which is taxed like income. No tax to the giver until millions and millions given ( though you need to report gifts over 15k.
Our family thinks of gifting totally differently than some here. Money ( when you are fortunate enough to have plenty) is in my family’s eyes “ family money”. Large gifts are given to preserve wealth. No one expects not to also work and make enough to support themselves, even if they technically don’t need to. When my daughter who is a nurse was gifted with money from her hospital to pay for Ubers at the beginning of the pandemic ( a donor had set up a special fund for nurses) she ended up gifting back that and more from our family charitable trust. She made us do it in our names though as she didn’t want anyone to know.
@gouf78, I know the parents and the bride pretty well. Very strong work ethic among the parents and all of the kids. He is well past retirement age (above 70 and maybe closer to 75) and works very, very hard. I think one kid works in his business but the others I know work in high-end high jobs.
Was it good? Well, they were likely to get the money eventually, but upon the death of the 2nd wife. Why not give it earlier when it can affect their lives. Back to someone’s comment, the gift was made with warm hands and not cold ones.
I don’t know that they earned it. The kids I know do not behave in a particularly entitled way.
I don’t see the parent-child relationship as transactional in this family but I expect that the parents would want the kids to feel grateful for the hand-up they had received. I don’t know how the kids actually feel.
Aftermath? All the kids seems happily married and ambitious in their careers (maybe not the one who works in the business). Several grandkids were flower children.
If I had accumulated that much wealth (and I know the parents have done some major philanthropy as well), I think I would give it to the kids but maybe a little bit later. I would not want a kid thinking that they didn’t have to apply themselves, but if they have the proper work ethic, I think I’d rather make it easier for them rather than wait until they are in their 50s or 60s or 70s before they inherit.
