Estate Planning Goals: Home Ownership For The Next Generation
If you have children, then sharing your prosperity with them in one or another way is probably one of your goals. Not wanting to spoil your adult children is an admirable goal, but if you have any money left in your own savings account, then you probably have not been spoiling them. Bill Gates has reportedly designated only a few million dollars for each of his children, lest they become spoiled, but you are not Bill Gates, and the phrase “only a few million dollars” is not in your vocabulary. You are a parent of young adults for whom home ownership is a much higher financial hurdle to clear than it was at your age. Meanwhile, you have limited resources. Giving your children money to put toward a down payment on a house is probably the simplest solution, rather than waiting for them to inherit it when your estate settles, and often simpler than transferring ownership of your house to them while you are alive. The annual gift tax exclusion allows you to give $17,000 per recipient per year without paying gift taxes. A Tampa estate planning attorney can help you with major financial decisions that relate to your adult children.
Set Boundaries With Your Children, and Respect Their Boundaries
When your children buy a house, it belongs to them. Let them choose the house they want, even if it is not the one they would have chosen. You might think that the house is overpriced, or you may wish that it were closer to your home, but your children have their reasons for choosing the real estate properties they choose. At the same time, you should not cave in to the pressure to give them more money toward a down payment than you originally offered, simply because your kids changed their minds and put an offer on a more expensive house than the one they originally considered buying. Be straightforward with your children about how much money you can afford to give them, and don’t let them push you into giving them more. Just as their house belongs to them, your retirement savings belong to you.
Don’t Be a Backseat Driver in Real Estate Negotiations
Money is not the only way that parents can help their adult children with home purchases. When your kids go through the real estate purchasing process, it can be a real treat for you, because it is the first time they have sought your advice this much since they were in college. Don’t get too carried away with being a know-it-all, though, just because you are an experienced home buyer. In a recent article on Curbed, real estate agents share their horror stories about the Baby Boomer dads who unintentionally sabotaged real estate deals by finding fault with the properties their kids wanted to buy or by having outdated ideas about what counts as a reasonable price for a particular property.
Contact David Toback With Questions About the Next Chapter of Parenting
A Central Florida estate planning lawyer can help you make an estate plan that is based on healthy boundaries with your adult children. Contact David Toback in Tampa, Florida to set up a consultation.