<p>I agree with Hunt. But many elderly people who were traumatized by the Great Depression and now by the “Great Recession” are fearful of giving away their money. I know many elderly people who eagerly open their statements from their accounts each month, counting every penny even if those ‘pennies’ add up to seven figures. Enough is never enough for them. So the idea of giving large amounts away is painful even if the children and grandchildren will suffer when the taxman takes a huge chunk of this money away after death.</p>
<p>even if the children and grandchildren will suffer when the taxman takes a huge chunk of this money away after death.</p>
<p>How are children & grandchildren suffering exactly?
Nothing is being * taken away* from them- they just may not get as much $$ as they hoped for.</p>
<p>( and only if estate is worth more than $5.12 million- is estate tax due)</p>
<p>“Nothing is taken away from them”? by the IRS? Are you kidding? For the adult children a more comfortable retirement is being taken away. For the grandchildren college tuition could be taken away. It’s not the government’s money it’s the family’s money, particularly if the money comes from businesses built in prior generations. </p>
<p>But I do sympathize with the women I was referring to. They outlived their husbands and now in their 80’s are handling finances for the first time in their lives. (In their generation, husbands handled money). They have heard stories or know people who have outlived their money. They have seen prices and inflation skyrocket over their lifetimes. (They remember when a loaf of bread was a nickel and a chicken was 10 cents and gas was 30 cents a gallon, etc.) They are frail and afraid.</p>
<p>Where do you get the idea that it is the parents responsibility to provide for retirement for their children & to cover college tuition for their grandchildren?</p>
<p>Back when most of us parents were college age, I’d guess that no one thought about grandparents helping to pay for college. That was a time when it was far more possible for a student to pay their way through college on their own steam. Nowadays, combine higher costs, smaller families, and a large generational transfer of wealth and we might be seeing a change in how families which are fortunate enough to be able to pass on inheritences fund college. </p>
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<p>It’s a worrisome bet to place. LTC policies are a relatively new insurance product compared to e.g. life insurance. Like life insurance, there’s a lengthy period between initial purchase and payout. Unlike life insurance, there’s no fixed and predictable payout. We’re not convinced that the insurance underwriters have properly calculated risk and cost, or that regulatory agencies are doing enough to protect the purchasers. Which is a pity, because we’d really like to have that peace of mind. My parents have a policy; my inlaws had one then dropped it when premiums skyrocketed.</p>
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<p>Then you’d love certain members of the branch of my extended family who don’t believe in the idea of older relations/parents providing support for children/younger relations and tend to criticize others for having such ideas…unless it comes to their own children. </p>
<p>They talk about money matters to the point it seems they have a single-track mind, are prying excessively, and get quite miffed when some people refuse to discuss anything pertaining to themselves as they probably share my opinion this matter is none of their business. </p>
<p>I also wonder about the lack of discretion and good common sense of such folks as I’m of the view one should keep personal details such as one’s financial condition close to one’s chest unless it is a relative/friend who can be trusted to not turn it into a subject of dinnertime/party conversation with unvetted extended family/strangers. </p>
<p>It’s one reason why I and some relatives try changing the subject or pretend there’s an “emergency” in order to leave whenever they start up about that topic of discussion. If nothing else…it really gets stale after a while…</p>
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Nowhere. The point is that most people would rather pass their assets on to their children and grandchildren rather than to the tax man. But as TatinG points out, some elderly people are too fearful to take the steps that would maximize how much they can pass on. I’m experiencing this exact situation since my father died. He understood the tax consequences and made annual gifts to his kids to reduce the amount that would be left in the estate. My mother has trouble understanding why she should continue to do that–even though she is more than amply provided for. Of course, she can do whatever she wants to do with her own money, but she doesn’t have a clear understanding of her assets and her goals. She will (sometimes) listen to the advice of her accountant, if not to that of her children.</p>
<p>My father is very old now and has never offered a penny for any of my kids college education or even small gifts of spending money. His house will all end up going to capital gains and money to his end of life care. It is a shame but some people are simply not able to part with their money. </p>
<p>On a side note I would have loved to have asked my dad but I never did. I never wanted him to think that I was looking at his money. Now, even at 90 his money is a secret. My sibling knows all the details and is on all of his accounts in joint but I stay clear away from all of that. He always made me feel like his money was his money and it was not my business. I will not be surprised when there is nothing left of his expensive home or accounts when he passes. He made it clear by never discussing it that he had plans for his money that were not my business. I deal with it but I don’t like it especially since I take care of him and do his shopping, laundry, and house cleaning not to mention the time spent just being his daughter and taking him for walks, lunches, and being good company. </p>
<p>I would say it is not our place to ask our aging parents to pay for any part of college but it would be nice if they are sitting with money to make the offer.
My kids will never wonder what is going on financially with us. They will have complete knowledge of what we have and if I could give it to them when they need it rather than when I am dead that would be my preference. I want to die just short of poor.</p>
<p>One of the good things about being able to pay off mortgage of an accessible home is that you have space for caregivers, who may be interested in lodging in exchange for reduced income. McMansion may need to be retrofitted to allow for such contingencies, which will also add costs.</p>
<p>Many folks do NOT qualify for long term care insurance at any price. IF folks are disciplined enough to save their money that they would have paid for long term care, they can “self insure” to a significant degree. </p>
<p>Often such funds are spent on other things though & the family home ends up being the insurance policy, for better or worse. I can think of much worse scenarios. The person getting care can still get appropriate care & the lifetime assets of the person getting the care are paying for it instead of the taxpayers. My sister thinks its awful but to me it makes sense–no one is OWED any inheritance after all.</p>
<p>Yikes, what a firestorm has developed here. I almost feel bad re-routing this back to the original topic instead of estate planning, extended care, recession, etc.</p>
<p>I have asked myself, really, what was my original question? Do I really feel entitled to MIL’s support of MY kids’ education? If so, why? I have never presumed that she’d support any other financial obligation of mine. </p>
<p>There are two things I’ve recalled and realized since the other day. First, I recall reading an article about college planning back when my kids were small and the prospect of funding their educations really terrified me. I was barely funding my 401k at the time. And the article specifically recommended sitting down with GP and GM and suggesting to them, when the kids are tiny, that they set up or contribute a NOMINAL AMOUNT to 529s on the kids’ behalf. There was no implication that I got that this would be a sacrificial amount. It seemed more akin to the old days when the kids might get a savings bond on each birthday. And the beauty of it was that GP/GM could do this at a time when the parents were struggling with babies or toddlers and more than likely couldn’t afford a dime for education. The interest accrued over 18 years, even with modest contributions, could result in a nice jump start for, what are we calling them? Muffy and Biff?
I remember liking the article!</p>
<p>A second thought I’ve had has been echoed by a few (and I mean a few!) of you here. That this is an opportunity for GP/GM to create a real LEGACY for the grandkids. Certainly it would never be my wish or expectation that MIL jeopardize her situation for the benefit of my kids (or me, as might be the case). I just thought, gosh, wouldn’t it be awesome for her to establish THE GRANNY SCHOLARSHIP by which she could support these kids’ education to the tune of a few thousand dollars.</p>
<p>Of course we see that we all have different POVs on funding education. There’s the Make The Kids Pay/Borrow camp. There’s the Make Them Work camp. There’s the I Want to Pay for My Kids camp. There’s the I Never Got a Dime for My College camp. I don’t really think there’s an objective right or wrong here. It clearly goes directly to our values about money and family.</p>
<p>For my part, I feel a strong obligation to educate my kids and send them into the world with as little debt as possible. The prospect of them graduating with marketable degrees and no debt is really exciting to me as a parent. Unfortunately, it hit a bit of a snag but I’ll figure it out. And when I become a grandparent, you can bet that yes, I’ll be there creating a 529 on their kids’ behalf, even if I put $100 in it once a year. I think the gesture alone speaks volumes.</p>
<p>Yea, gestures sometimes get derailed. My dad said he bought some things for my S when S was born toward college. College for S has come & gone & none of the funds were ever offered. I never asked about them and dad never mentioned them. Suspect they were consumed by other needs.</p>
<p>Sorry, didn’t mean to sidetrack or derail your thread. It sure does seem to bring up a lot of thoughts and opinions, since most of us have kids and parents. Good luck working things out for your family!</p>
<p>Just to add a note of levity …</p>
<p>My grandparents didn’t believe in helping to fund their grandchildren’s educations. They built a very lucrative business which was sold when they passed. When my own mother passed most of the money I inherited was left over from the sale of their business which I am using to fund, you guessed it, my own children’s educations. (So my grandparents are helping to fund the educations of their great grandchildren.)</p>
<p>You never know what is going to happen to your money.</p>
<p>Do you have a good understanding of inlaws’ financial situation? Has there been ANY estate planning discussions btwn your wife and your inlaws? Do your inlaws intend to name their children/grandchildren as their inheritors - or elsewhere? If your inlaws are well-situated financially, then a max $13,000/year cash gift to grandchildren and/or children is often good estate-planning practice. Your inlaws, for instance, could perhaps distribute $5000 to those five individuals for a given year ($25,000).</p>
<p>People are sometimes tone-deaf concerning financial assistance to their children and granchildren. Perhaps your inlaws would be happy to help. if they knew it 1) wouldn’t be offensive to you/wife; 2) would be welcomed by you/wife/grandchild; 3) would be truly appreciated/reciprocated (in-kind). Time to talk to your wife. Then time to re-assess situation. I’d ask my parents (who can easily afford cash subsidies) but not my inlaws (who can’t).</p>
<p>So, Beastman, did you/are you allowing kids to take out Gov. guaranteed loans?- AKA,“Skin-in-the-game”</p>
<p>Beastman, my parents generously jumpstarted my kids 529’s back when they became the wise choice. My niece and nephews are 8 and 11 years younger than my oldest, so they started funding them more modestly with the intent that they wind up with a similar amount (adjusted for price increase I assume).</p>
<p>You are right about all the different camps. I can say that of my older son and his friends he is the one doing the best. He has worked close to full-time (is now officially full-time) and is a year behind, he is a second semester junior. Between a few bad classes and dif things he lost some time, but he has SAVED an ton of money. We don’t make him pay for school as long as he is saving and going to school. We did make him pay for a couple of classes that he withdrew from at CC. I think that finishing a year late is a great trade for the $$ he will have saved toward a home of his own. </p>
<p>My point is that we wanted him to go to school because it is the best bet for his future.</p>
<p>My friend’s husband believes that since he had to pay his way, so should his kids. So his son is in the marine reserves, never deployed and it’s been over 3 years since HS. It seemed great at the time he went to boot camp, they were so proud! He did it because he didn’t want college. Now he is a night-time security guard making $10/h (maybe a bit more now) and has ZERO college…no $ in the bank. The daughter has been to school on and off, currently off…I think if they were more supportive of the education the kids would have made different choices. I don’t get why some parents think the kids should suffer because they did. I think the fact thatmy hubby had to pay for his own school is the very reason he wants to pay for our kids (as much as we can…)</p>
<p>Finally, I’m not saying GP’s SHOULD pay, but if they have it, why not.</p>
<p>btw, the beauty of the 529 for grandparents is that they can assess the situation when it is time and decide if they think they will NEED the $ after all. They don’t have to ever give it to the kids if they will need it in their old age. What’s not spent from my kids (and it will probably be spent…but say if they had a scholarship or something) will roll down the the cousins. Too late for the OP situation, but something others should bring up if they have little ones.</p>
<p>“Back when most of us parents were college age, I’d guess that no one thought about grandparents helping to pay for college.”</p>
<p>Some did. In families where the grandparents had all the money, they paid for things. Some future grandparents earmarked funds for Walter’s kids when Walter was still in elementary school. Back in the day, when tuition was really cheap, the grandparents might have paid for the grand tour or a big wedding or other expensive rites of passage. This is an old, old pattern.</p>
<p>My only advice to the OP is to consider having your spouse speak to relatives on that side of the family rather than doing it yourself. Sometimes in-law relationships become closer than the blood relationship – this has happened in my family. But a lot of older people would feel more comfortable getting a financial request from their own child than from the child’s spouse. The mother-in-law may still view the spouse as an outsider, even after 25 cordial years, kids, etc. You don’t want your motives to be misinterpreted.</p>
<p>LongPrime, re: skin in the game. Not in the form of loans, no. At least not yet. Of course, D hasn’t even started college so there’s no telling. I’m 1.5 yrs into a 6 year process! Ugh. Wish I hadn’t done that math.</p>
<p>The skin I asked for was as follows: “Son the engineering student, get a co-op job and the proceeds go to the cause.” Son says OK. (Of course he needs to get the job but is is taking steps towards it). “Daughter who plans to study fashion (no hope of paid internships there), get good grades and test scores so you can get scholarships.” Daughter does this and gets half-ride at school of her choice. Her education can be funded 4 years with what’s in the 529 for her. </p>
<p>I might also point out that my kids understand that college is vocational training for them, not a journey of self-discovery. The goal is to be employable. There are no liberal arts programs for them. Even the fashion program will be combined with a MBA or minor in marketing, combined with internships with (if necessary) a customer of mine in NYC. This is skin, too. Expectation.</p>
<p>Some of you are asking if we have frank conversations about money with my wife’s parents, and the answer is no. They have a will, they have done some estate planning. I don’t know the details and neither does my wife. I know we need to do it, but when…</p>
<p>I think this topic has been beat to death but I will add one more thing. When I was a new graduate from college many years ago and my then fiance couldn’t buy a car on his own even with a cosigner, it was MY grandmother who loaned him the money which he religiously paid back. He was so grateful that she trusted him enough - we weren’t even married then - to make that loan when no one else was either willing or able. I think that if anyone asks the grandparent for any money it should be the child and only with the intention of paying back every cent. If grandma wants to offer it at that point as a gift that would be gracious but not expected.</p>
<p>Beastman, really, you are mentioning some really “high class” problems. Most of us are lucky if we don’t have to support our parents in old age much less have them help with college costs. I would never ask or expect such a thing. I also want my kids to graduate debt free. But, to do that, I’m willing to take on a small debt of my own with god willing to keep me healthy and productive.</p>
<p>I’m a bit confused as to why the money is going to Buffalo wings. Tell the kid the next time granny sends him money to put it in a jar marked “book money.” Make the kid responsible. Who says money sent directly to kids gets to be wasted on nonsense? Tell him you expect him to pay for 10% through summer jobs and saving his vaious gift money. If your wife would like to explain to her mother that not quite all of everything has already been covered that would probably be a good idea. If she doesn’t want to then respect the balance of their relationship and let it go.</p>