Conscious Aging: Giving Money to Adult Kids

Friend and regular reader Ada suggested this as a topic for a blog post, or several.

Had lunch with a group of women, all in their seventies, the other day.  Got into a conversation about gift giving to older children.  All of us have children in their late forties and early fifties.  One woman talked about the fact that she sends each child and his/her spouse a check for $100 on their birthdays.  All gave at least $1000 at Christmas.  The “children” allhave good jobs and are financially secure – some better off than the parent.  We discussed such things as:  should one just continue;  should it depend on financial circumstances of parent and or child (one friend has two children who are very well off, but a son who is in a profession that has lower salaries, works hard but could probably use the $100);  should one return to giving presents that one can touch/hold;  should one discuss it with the children or just tell them.”

This is a topic of longtime interest to me, so here goes. Thanks to Ada for suggesting the topic.

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Anyone who faces unresolved feelings about giving to adult kids might find my first book, How Much is Enough?, a useful resource. The book came out in 2002 and remarkably to me, it’s still available on Amazon.

The book suggests that we all have “money stories”, often un-articulated, which underlie financial decisions like giving to adult offspring. Bringing a money story to the conscious level, then sharing your story with those closest to you, seems to make hard financial decisions easier. The decisions can be recognized as coming from somewhere.

To deal directly with the questions that arose during the lunchtime discussion:

I generally believe that financial independence is a key component of contentment in older age, so parents who are less well off giving to adult kids who are financially successful doesn’t make much sense — unless “well off” is relative and everyone is rich, just that the kids are richer. But I don’t believe, and wouldn’t advise, parents to put themselves at a financial disadvantage in order to make gifts to adult kids. We’re not obligated to give an allowance to our offspring forever. Kids do grow up.

The second issue is a bit harder: how do you deal with the fact that kids make different career choices and so may have highly unequal assets as they move through adulthood?  Should you give equally, regardless of financial need? Should you give more to the one who needs it the most? Should you give more to the ones who are more successful, on the grounds that they will make better use of it? Should you support the adult son or daughter who can’t handle money and spends unwisely — or refuse to reinforce bad decision making?

There’s no right answer here, and your sense of ease with wherever you wind up goes back to your own money story. I’m firmly in the “equal” camp, going back to my childhood experience where my mother played favorites and was constantly threatening to cut one of us out of her will over some imagined or real transgression. Mind, she didn’t have much money to leave. But the symbolism of playing favorites among the three of us was clear. My estate plan divides everything equally between Sara and Matt. In my annual giving to them, I do the same thing — even though Matt has a family of four and Sara and Ben are two.

Equal is easy to explain — and I’m a big fan of explaining and answering whatever questions your kids may have about your motivations. But there are reasons to give more to one kid, or leave more. I once worked professionally with a woman who had an adult daughter and two adult sons. Her daughter had been stalwart in caring for her mother in every way; the sons not so much, even though they were far better off financially. The woman wanted to leave the bulk of her estate to her daughter, with much smaller amounts to each of her sons. Once we’d worked through her feelings about how her sons might react and what the implications were for the three siblings, I supported her decision — and encouraged her to write a letter to be placed with her will describing her thinking. She didn’t feel that she could talk to the kids while she was alive, but she agreed with me that they should know why she divided the assets the way that she did.

This is a long post — I’ll continue tomorrow with the matters raised by Ada’s lunch group. Please send me a comment if there’s another issue along these lines that you’d like to hear about.

4 thoughts on “Conscious Aging: Giving Money to Adult Kids

  1. Will be anxious to see any responses. I read your book in 2002 but don’t remember what you said. Perhaps that is because it was not as “relevant” as it is now. However, I am in your camp about “equal.” We have chosen to divide our estate equally among our three children. Were we wealthier, we might have included the grandchildren, but our estate is small. We figure that if our children want to take their portion of what we leave and give to their children, that is their choice.

  2. for Ada: I also imagine you and Bob are fairly comfortable talking with your adult kids about your decisions. I think that’s important. Let me know if the blog posts trigger any other questions.

  3. for Ada: I think that openness among family members is a really healthy thing. Kudos to you and Bob.

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