In Defense Of Cash Gifts
If you are old enough to think about retirement and about your estate plan, then you are old enough to know that you cannot solve all your children’s problems and that money cannot solve all problems. You are probably also painfully aware of how many obstacles stand between your children and the standard of living you enjoyed at their age. The first time you received a quarterly statement from your employer-provided retirement fund, you probably daydreamed about sharing the money with your children in the future. Many families have mixed feelings about parents giving cash gifts to their adult children; some consider it emotional blackmail, while others think that it makes it harder for young adults to become independent of their parents. This year, though, young adults are in a difficult spot financially, and a cash gift might be just what they need, even if your family does not normally exchange cash gifts. In 2022, you can give cash gifts of up to $15,000 to a virtually unlimited number of relatives and friends. A Tampa estate planning attorney can help you make decisions about giving some money as gifts and keeping the rest for the future.
On Giving Cash Gifts to Financially Responsible Relatives
Most people under the age of 50 immediately know how they would spend $15,000, and it would not be on splurges. If you give your kids cash gifts this holiday season, it is most likely that they will either spend it on paying down debts, or else on paying upfront for expenses such as college tuition, home repairs, or medical care, for which they would otherwise have to borrow. If your kids are really doing well financially, and they do not have an immediate need to spend the money, they can always keep it in savings for their own retirement or their own children’s education.
On Giving Cash to Spendthrift Relatives
If your young adult children have not yet developed the skill of managing their finances, better that you find this out now. If your young adult children have never made a major financial decision, for example, if they are still in college or have always lived at home, the first cash gift gives you an idea of what they would do with $15,000, at least for now. It could be a learning experience about how quickly $15,000 can disappear (better that they should find this out now than with their inheritance), or it could be the first step to financial independence. If you are truly horrified with how wastefully they spend the money, don’t offer it again next year, and if they ask next year, it can be the beginning of an ongoing conversation about finances.
Contact David Toback With Questions About the Little Decisions That Add Up to Your Estate Plan
A Central Florida estate planning lawyer can help you invest and spend your money so that you have some to keep and some to share. Contact David Toback in Tampa, Florida to set up a consultation.