old parents of LetsRun - do you feel obligated to help struggling kids in adulthood?

el salvador wrote:

Wife and I raised 4 kids together, 2 turned out great, 1 is so-so and 1 struggling big time with money and mental health issues.

We made 300k+ per year for most years of their lives, so they wanted for nothing. 2 of the 4 make under 50k well into their 30s. It's heartbreaking to see them struggle financially and know they can't start a family with the same standard of living they enjoyed growing up.

Perhaps I'm in the minority, but I feel somewhat obligated to help them out. My wife and I are worth about $3-4 million (home equity included) but we have simple lives. I feel like an extra $10,000 / year could make a world of difference in their lives. What to do?

Where do they live? Buy them a simple 250-500K starter home to take the burden of rent off them. Now if homes start at 1 million in their neighborhood, that might not be feasible.

Gift them the max per year without tax penalties...think it might be $13K per kid. Less you have to worry about passing on after you die.

thegiftthatgives wrote:

Gift them the max per year without tax penalties...think it might be $13K per kid. Less you have to worry about passing on after you die.

you don't pay taxes if it's above $13K, or whatever the limit is, you just need to report it to the IRS if you do.

OP: yeah I plan on setting up trusts for my kids. I only have one so far and she's only 2, but have similar assets, and have given it some thought.

That said, I also won't be raising head cases who can't fend for themselves either.

I never got a dime from my parents after I turned 18, but they didn't have the money to lend either.

I help out my kids when they ask for it, but it's not always a chunk of cash. Sometimes it's better to give them advice and time rather than money. Every situation is different.

If they're struggling at their current income levels, then you didn't raise them to be very smart financially. Are they unhappy?

If you prop them up, they will never learn to survive on their own.

It would be a mistake to give them a stipend every year. They would begin to depend on it and get upset if you didn’t do it every year. It would also cause strife among the siblings who might have other ideas about how you should divy up your money. You would be better off paying for a family vacation every year at some nice resort. Also, treat them to dinner at a fancy restaurant once and a while. These things will improve their quality of life without making them dependent on you.

3 mil in the bank wrote:

That said, I also won't be raising head cases who can't fend for themselves either.

You have NO IDEA how your kid will turn out. All you can do is raise them the best you can and hope for the best.

To OP,

Tough call but do what you feel comfortable doing. Just don't jeopardize YOUR finances.

Perhaps contributing to education/training (so-so) or helping with counseling/treatment (struggling big time) would be a better investment.

You may end up enabling bad behavior if you just throw money at them.

3 mil in the bank wrote:

... I only have one so far and she's only 2 ...

That said, I also won't be raising head cases who can't fend for themselves either.

You have a lot to learn, buddy.

compressed wrote:

3 mil in the bank wrote:

... I only have one so far and she's only 2 ...

That said, I also won't be raising head cases who can't fend for themselves either.

You have a lot to learn, buddy.

LOL. Indeed.

Why wouldn't you? Is it better to wait until you're dead to give your children money?

I'd probably give him/her the money unless I thought s/he would use it for something harmful. I would be unlikely to give money to a kid with a substance abuse problem, for example.

Is it me or does 2-3 million seem like a very low networth for 300k income for 2-3 decades? Kids are expensive I guess.

Meant 3-4 million sorry.

I'm probably older than you. I changed my mind about waiting until I died before my kids got any money. For example, this year I paid down one kid's student loan debt while setting up a Roth for the other. I agree with the poster who said not to just throw money at them but to help with specific issues that you can directly contribute to. It's a tough decision. Just my .02 cents. Good luck.

BTW, the maximum gift exclusion for 2018 is $15,000, up from $14,000.

John D Rockefeller wrote:

I'm probably older than you. I changed my mind about waiting until I died before my kids got any money. For example, this year I paid down one kid's student loan debt while setting up a Roth for the other. I agree with the poster who said not to just throw money at them but to help with specific issues that you can directly contribute to. It's a tough decision. Just my .02 cents. Good luck.

We did this also but I wouldnt use the word obligated. Our son doesnt make much money but he saves and has never asked us for anything. Because of that we often want to help him. Similar to JDR, we paid off his student debt after he had been paying it for 5 years, we gave him a down payment on a car (Yaris) and we will help with his upcoming wedding.

thegiftthatgives wrote:

Gift them the max per year without tax penalties...think it might be $13K per kid. Less you have to worry about passing on after you die.

The father is likely 66-68 years old. Perhaps 20 more years to live. 4 kids X $13K = $52,000 per year.

If they were making $300K while they were working, they likely need ~$120K to live now.

If they can maintain a 6-8% RoR for the long term I guess that would be feasible? If they live 20 more yrs and give all four kids the $13K it would be $1.04M but spread over 20 yrs. His portfolio should earn $180,000 a year very conservatively over the long term. I guess he could fund his own lifestyle and the GIFT to each child indefinitely assuming there is not a long term downturn.

elite hacker wrote:

Where do they live? Buy them a simple 250-500K starter home to take the burden of rent off them. Now if homes start at 1 million in their neighborhood, that might not be feasible.

Have you ever been out of California? In 90% of the country a $500K home would have three BDRM/ 3 baths and a great ROOM and a 2-car attached garage, two stories and a finished basement.

I live in an MTSA of 450,000 in a capital city, BIG 10 city, and you can get a very nice home (if it is 2 of you) for $200K.