Financial Dilemma

[WeezyBengal]

My wife and I both make good money. I am a software engineer/developer and she is a school counselor. Her parents are VERY well off.

She had a family meeting with just her and her family over the weekend and came home and told me that her parents are going to be giving her/us $2,000 a month. I guess they have so much money they don't know what to do with it and they want the ones around them to live a better life. They think this will help and free us up financially. Her dad wants us to have the things he couldnt afford or couldnt have when he was our age (30).

I am honestly not sure what I think about it. We don't necessarily need the money (we save money each month and live comfortably) but more money is always good. I HATE handouts and its almost emasculating in a way. I want to provide for my wife and my daughter and dont want anyone else's money. I am really struggling with it. Part of me is appreciative and it will make life easier, but part of me doesn't want any part of it.

If anyone else ever found out about this (family/friends/etc) im not sure how I would feel. I would be totally embarrassed.

What are your guys' thoughts?

[fredtoast]

If you had money what would you rather do than give it to your children?

Take it and be happy. They are just doing what most parents would do in that same situation. They know you will get it when they die, so instead they want you to have it to enjoy right now.

If you were broke or struggling I could see you feeling "emasculated" but this is nothing like that.

[WeezyBengal]

(04-01-2019, 05:09 PM)fredtoast Wrote: If you had money what would you rather do than give it to your children?

Take it and be happy.  They are just doing what most parents would do in that same situation.  They know you will get it when they die, so instead they want you to have it to enjoy right now.

If you were broke or struggling I could see you feeling "emasculated" but this is nothing like that.

Thanks for the honest input. 

That is definitely a good way to look at it...it just feels "wrong" to me for some reason. I will say, I have NEVER asked their family for anything in my life and im proud of that. They have given us plenty of things before (go on vacation every year, pay for dinner, etc) but never have I asked them for anything. 

[Vas Deferens]

take it and put it in a rainy day account for your daughter. just stash it away.

i wouldnt feel bad about it unless it was somehow negatively impacting them or keeping you from providing for your family.

having a big rainy day fund is ultimately allowing you to live a better life, through mere confidence that if something went wrong you could cover the expenses.

and any friends of yours that would treat you badly or think differently about you as a result of putting 2K away for your daughter each month should be reevaluated.

[fredtoast]

BTW if they have millions then they could be giving it away while they are alive to avoid possible estate tax when they die.

It has been a while since I looked at the exact numbers, but here is the way it works.  As a taxpayer you are entitled to a "unified credit" worth a few million dollars.  If you wait until you die then that is the amount you can leave in your estate without triggering any estate tax.  If you give that much away in a big chunk while you are alive you pay no "gift tax" but your entire estate is taxed when you die.  So you can use that tax free unified credit to dispose of your assets tax free either while alive or at your death.  But if you just give away a little bit each year (it used to be $10K per person per year) it does not reduce your unified credit.  So if you start early you can give away a lot of money while you are alive without ever reducing your unified credit and you can still leave millions tax free when you die.

[XenoMorph]

(04-01-2019, 05:04 PM)WeezyBengal Wrote: My wife and I both make good money. I am a software engineer/developer and she is a school counselor. Her parents are VERY well off.

She had a family meeting with just her and her family over the weekend and came home and told me that her parents are going to be giving her/us $2,000 a month. I guess they have so much money they don't know what to do with it and they want the ones around them to live a better life. They think this will help and free us up financially. Her dad wants us to have the things he couldnt afford or couldnt have when he was our age (30).

I am honestly not sure what I think about it. We don't necessarily need the money (we save money each month and live comfortably) but more money is always good. I HATE handouts and its almost emasculating in a way. I want to provide for my wife and my daughter and dont want anyone else's money. I am really struggling with it. Part of me is appreciative and it will make life easier, but part of me doesn't want any part of it.

If anyone else ever found out about this (family/friends/etc) im not sure how I would feel. I would be totally embarrassed.

What are your guys' thoughts?

if they want to give it.. Take it.. 

If you don't want to spend it put it all in an account for your daughters college.  ///  super rainy day fund...   (or just invest it)

take that vacation you been thinking about.  home improvements etc...



Worst case ill give you a forwarding address to send the checks too.

[XenoMorph]

(04-01-2019, 05:13 PM)WeezyBengal Wrote: Thanks for the honest input. 

That is definitely a good way to look at it...it just feels "wrong" to me for some reason. I will say, I have NEVER asked their family for anything in my life and im proud of that. They have given us plenty of things before (go on vacation every year, pay for dinner, etc) but never have I asked them for anything. 

probly why they are offering you money....


I'm in the same boat with my inlaws. kinda... I'm the only son In law that never lived in their house at all  (the others 5+ years each)

Only ever borrowed money twice and paid back in full...  They recently gave us money to help with my wifes hospital bills... even though they are both retired.  which made me iffy on taking it but it made them feel good to help their daughter.

[fredtoast]

(04-01-2019, 05:22 PM)XenoMorph Wrote: if they want to give it.. Take it.. 

If you don't want to spend it put it all in an account for your daughters college.  ///  super rainy day fund...   (or just invest it)

take that vacation you been thinking about.  home improvements etc...



Worst case ill give you a forwarding address to send the checks too.

If I receive money as a gift I usually spend it on something I would not buy with my own money.

If you really need it for your retirement planning or something like that then just invest it, but I am sure they would like to see you spend it on something just to enjoy.  In fact whenever I took a nice vacation or bought a new car I would tell them that it was "from them".

[fredtoast]

BTW you could multiply that $2K a month by using it to create an income/investment stream.

$2k a month would pay the mortgage on some nice commercial rental property.

[CKwi88]

It sounds like they're gifting money so their estate wont be taxed (maybe as much) when they die, depending on how well off they are. I think the gift limit is 13 or 14k a year, so 2k a month floats right around the limit.

Consider yourself lucky it's happening now that you're 30. I've seen people starting to get it as a teenager. You'll make better decisions.

[SunsetBengal]

My advice would be to simply take it gracefully. If you don't really need the money, just put it with your other money and let it grow. Maybe do something nice for the family with part of it, like sponsor a family vacation and invite your inlaws to be your guest.

Besides, if you let it be known that you're not completely comfortable, you risk hurting people's feelings. My family is not quite as well off, but they give away stuff like perfectly good furniture, year old premium electronics, heck they even once gave my sister a two year old car, just because they wanted a new one. My Dad has gifted me more of his garage items, good quality stuff at that, than most guys ever buy, and most of it used maybe, once.. Weather I want/need it or not, I always accept it with a smile. Some of it I keep, some of it I donate to people that really need it.

[Benton]

(04-01-2019, 05:04 PM)WeezyBengal Wrote: My wife and I both make good money. I am a software engineer/developer and she is a school counselor. Her parents are VERY well off.

She had a family meeting with just her and her family over the weekend and came home and told me that her parents are going to be giving her/us $2,000 a month. I guess they have so much money they don't know what to do with it and they want the ones around them to live a better life. They think this will help and free us up financially. Her dad wants us to have the things he couldnt afford or couldnt have when he was our age (30).

I am honestly not sure what I think about it. We don't necessarily need the money (we save money each month and live comfortably) but more money is always good. I HATE handouts and its almost emasculating in a way. I want to provide for my wife and my daughter and dont want anyone else's money. I am really struggling with it. Part of me is appreciative and it will make life easier, but part of me doesn't want any part of it.

If anyone else ever found out about this (family/friends/etc) im not sure how I would feel. I would be totally embarrassed.

What are your guys' thoughts?

Would you rather take the money and pay modest taxes, or wait until they die (not being crude, it's just life) and have the same money heavily taxed?

From my own experience, my folks are fairly well off. They worked hard and invested well, and received a pretty big chunk several years ago through inheritance. Anyway, from time to time my dad or my mom will hand me an envelope with several thousand dollars in it. At first I took offense. I always liked the fact that I started out with nothing, and even though I don't have a lot now, I earned it. But they kept doing it and finally I understood when my mom told me they'd rather see me use the money to do something good for my brother and I (take the kids on a vacation or invest it or whatever) instead of just knowing they were leaving a stack of money behind. 

Take the money. It's not so much about you and her, it's about them. 

[fredtoast]

My parents worked hard and saved well but they also lived at a great time. They bought a modest home in 1960 for just a few thousand. They paid it off in 7 years, made a few improvements and sold it in 1980 for 7 times what they originally paid for it. We will never see home prices go up like they did back then.

[*michaelsean*]

(04-01-2019, 05:20 PM)fredtoast Wrote: BTW if they have millions then they could be giving it away while they are alive to avoid possible estate tax when they die.

It has been a while since I looked at the exact numbers, but here is the way it works.  As a taxpayer you are entitled to a "unified credit" worth a few million dollars.  If you wait until you die then that is the amount you can leave in your estate without triggering any estate tax.  If you give that much away in a big chunk while you are alive you pay no "gift tax" but your entire estate is taxed when you die.  So you can use that tax free unified credit to dispose of your assets tax free either while alive or at your death.  But if you just give away a little bit each year (it used to be $10K per person per year) it does not reduce your unified credit.  So if you start early you can give away a lot of money while you are alive without ever reducing your unified credit and you can still leave millions tax free when you die.

I always thought it reduced your lifetime allotment, but now I find out that it's only reduced by the amount over $15,000 in a year.  

[*michaelsean*]

Seems like they are doing a nice thing, and parents want to help their children. It would be almost rude to turn it down.

[NATI BENGALS]

Time to get a gambling problem

[Beaker]

529 for your daughter

Roth IRAs for you and the wife

Then spend some to travel while youre young.

Be sure to thank them for it.

[Stewy]

(04-01-2019, 05:09 PM)fredtoast Wrote: If you had money what would you rather do than give it to your children?

Take it and be happy.  They are just doing what most parents would do in that same situation.  They know you will get it when they die, so instead they want you to have it to enjoy right now.

If you were broke or struggling I could see you feeling "emasculated" but this is nothing like that.

(04-01-2019, 05:13 PM)WeezyBengal Wrote: Thanks for the honest input. 

That is definitely a good way to look at it...it just feels "wrong" to me for some reason. I will say, I have NEVER asked their family for anything in my life and im proud of that. They have given us plenty of things before (go on vacation every year, pay for dinner, etc) but never have I asked them for anything. 

I agree with Fred. 

My opinion is that I think you're being prideful and NOT thinking about what's best for your family, but what's best for your ego.

A little story.  I went to Miami of Ohio from 1988 to 1992.  At the time it was known as the Notre Dame reject school (maybe still is).  My Freshman class was at least half Catholic, ultra conservative and Republican (Mass Com Department always did Freshman polls).  Almost without exception, these were guys from Ignatius, Xavier, etc. that couldn't get into Notre Dame academically.  However, there was one friend of mine, that got accepted to ND, but his parents couldn't afford it, so he ended up at Miami.

So......save up the money, put it in a College fund, have your daughters entire college paid for ahead of time so she can go wherever she gets into even if you couldn't personally afford it.  One part about being a good parent is about wanting MORE for your kids than you had, not about what you provide being good enough.

[BengalHawk62]

God, i'd literally give my left nut to have someone give me $2000 a month for the rest of their lives.  We're middle class folks.  make enough to stay alive and pay our bills.  not much after that though.  It can get pretty tight some months, especially if we have to do something to our vehicles or home projects.  but that's what we have a little savings account for I guess.  So my advice is to swallow your pride and take the damn money.  there is a lot more people out there way worse off than we are, but if my wife's folks wanted to do this for us.....Hells Bells, i'd smile all the way to the bank with it. 

[Truck_1_0_1_]

(04-02-2019, 01:00 PM)fredtoast Wrote: My parents worked hard and saved well but they also lived at a great time. They bought a modest home in 1960 for just a few thousand. They paid it off in 7 years, made a few improvements and sold it in 1980 for 7 times what they originally paid for it. We will never see home prices go up like they did back then.

Unless you live in Canada

lol, anyways, we have a lottery up here in Canada that is $1,000.00 per week, for life, a month, for life, etc., thus you've basically just won an even more difficult, highly focused lottery.

With $24,000.00 a year, I'd save half immediately, split amongst various savings accounts, investments and something for your daughter, take 6 of the remaining 12, put it as a mortgage principal payment (if you indeed have one, Weezy) and use the other 6 for a family vacation (a NICE one) and for various odd things around the house.

That's just me