Money from my parents

[haapai]

My parents told me a couple of years ago that they intended to start giving my brother and me about a thousand dollars a month when they reached their late eighties.  I sorta blacked out when they mentioned it and never made any plans that involved it.  My dad told me at the time that his parents had done something similar when they reached the same age. 

Last week, dad announced that he had changed his mind and wanted to start giving sooner.  In his words, the money is just piling up and they aren't spending it.  He'd prefer to see us having fun with it now instead of after he and mom die. 

He asked for a deposit slip so that he could set things up. 

It took me five days to tell my partner about it.  I considered saying nothing but my parents want me to have some fun with this money and that puts the kibosh on just funneling it into an investment account.  It is hard to hide an extra $1000 or even $500 a month when you've been living on a take-home pay of $425 a week. 

I suspect that there are a whole lot of other middle-aged folks also getting similar gifts from their parents.  You probably know a few and you should not be hurt if they haven't ever mentioned it, or only told you about it after their parents had passed.  If I lived in the same town as my brother and parents, talking about it would also affect them.  That is, people would assume that my brother was getting a similar amount and they would speculate as to how much money my parents had.  In order to protect other recipients and the givers from unwanted attentions, I'd have to keep mum. 

In my case, the gifts have nothing to do with avoiding state or federal inheritance taxes.  My folks simply do not have that kind of money but that's pretty much the first thing that most folks would assume. 

I'm pretty messed up by this life-changing turn of events.  It's been a week and I still haven't mailed the deposit slip.  Thank goodness you guys are out there for me to ramble at.  If any of you have gotten similar gifts and wish to share some advice, I'd love to hear it.  I feel so alone right now. 

Also, could someone re-post a link to that boogleheads piece on dealing with windfalls?  I think that I need to read it again. 

[jerseygirl]

Very nice! Your parents (like us) Want to see you enjoy or make your life easier.
Just say thank you!!
If you want to save, use some of the money you’re earning and replace with the gift

[debthaven]

I don’t know how close you live to your parents but if they’re physically able, I’m sure they’d enjoy spending time with you and your partner.

Maybe you could spend a few days together doing or seeing something you’d all enjoy?

[minnesotapaintlady]

Well, for starters mail him the deposit slip!

My parents do this periodically, and if it's my mother doing the giving she's usually very specific in what she wants the money going towards.

If it's going to be a regular monthly contribution, just treat it like any other income and start at the top of your open priorities and work your way down the same as if you'd gotten a raise at work.  Since they want you to have fun with some of it, I'd add that as one of the upper level priorities and fund it with whatever amount feels appropriate to you.

[haapai]

Aug 1, 2024 13:22:31 GMT -5 debthaven said:

I don’t know how close you live to your parents but if they’re physically able, I’m sure they’d enjoy spending time with you and your partner.

Maybe you could spend a few days together doing or seeing something you’d all enjoy?

My parents live seven hours away from me by car and thirteen hours away from me by bus.  I currently share a vehicle with my partner, who works different days than me, so going to see my folks has been quite difficult.  Getting a second vehicle was number one on my list of things to do with this money.  They didn't have to mention it or attach strings.  Being able to spend more time with them was already high on my list. 

Buying a second vehicle and insuring it should soak up a lot of the first year of monthly gifts.  That buys me some time to figure out what the heck just happened.  FWIW, I have the cash on hand to buy the car without borrowing.  I've always just balked that the extra $150 or so a month that it would cost to insure it. 

There's another wrinkle though.  My mother is not the woman who raised me anymore and my parents currently have two vehicles.  She really should not be driving.  My parents might just have set this whole thing up so that I have no excuse not to buy the second vehicle and drive it away from her. 

[jerseygirl]

Use some of the money to buy plane tickets to visit them

[debthaven]

Other thought: 7 hours is quite a long drive, but 3-4h is much more doable. Maybe you could arrange to spend a few days together halfway?

[Opti]

Aug 1, 2024 13:41:35 GMT -5 haapai said:

Aug 1, 2024 13:22:31 GMT -5 debthaven said:

I don’t know how close you live to your parents but if they’re physically able, I’m sure they’d enjoy spending time with you and your partner.

Maybe you could spend a few days together doing or seeing something you’d all enjoy?

My parents live seven hours away from me by car and thirteen hours away from me by bus.  I currently share a vehicle with my partner, who works different days than me, so going to see my folks has been quite difficult.  Getting a second vehicle was number one on my list of things to do with this money.  They didn't have to mention it or attach strings.  Being able to spend more time with them was already high on my list. 

Buying a second vehicle and insuring it should soak up a lot of the first year of monthly gifts.  That buys me some time to figure out what the heck just happened.  FWIW, I have the cash on hand to buy the car without borrowing.  I've always just balked that the extra $150 or so a month that it would cost to insure it. 

There's another wrinkle though.  My mother is not the woman who raised me anymore and my parents currently have two vehicles.  She really should not be driving.  My parents might just have set this whole thing up so that I have no excuse not to buy the second vehicle and drive it away from her. 

Interesting. Giving up a car can be hard for some folks, but giving or selling it to someone they like can make that process easier.

[Rukh O'Rorke]

do you and partner split living expenses 50/50? or proportionally? Will this ongoing gifting change that?

What are your current savings plans? what is your retirement plans, money wise?

Seems some of this should be saved. And I myself would be hesitant to count on it as permanent, althought that would be difficult if it kept coming for a number of years.

Agree with visits and such with the parents as a way of thanks.

[Rukh O'Rorke]

why deposit slip? Why not zelle? or somesuch?

[resolution]

The personal finance subreddit has a guide to managing a windfall. www.reddit.com/r/personalfinance/wiki/windfall/ 
The guide references a bogglehead guide as well. www.bogleheads.org/wiki/Managing_a_windfall

My mother in law plans to give us some stock in a regional bank that is worth about $25k. She plans to do half this year and half next year so she doesn't have to mess around with extra forms for exceeding the annual gift amount. I asked her if the actual stock in it has any sentimental value, and it doesn't, so I would like to sell it and put it in an index fund at our normal brokerage. I have no idea how I am going to manage this because we are getting our health care through the ACA and the capital gains will mess up with the income that I reported. But at the same time, I feel like having stock in a regional bank is risky.

The gift is intended to try to even things up between us and his brother and sister, who keep getting subsidies. However we have been told that after this account, they will need all their extra income to go to my BIL. My nephew has some speech delays, so they are paying for private school and speech therapy to help him out.

[haapai]

Aug 1, 2024 13:57:15 GMT -5 Rukh O'Rorke said:

do you and partner split living expenses 50/50? or proportionally? Will this ongoing gifting change that?

What are your current savings plans? what is your retirement plans, money wise?

Seems some of this should be saved. And I myself would be hesitant to count on it as permanent, althought that would be difficult if it kept coming for a number of years.

Agree with visits and such with the parents as a way of thanks.

My partner is minimally employed and pays some household expenses.  It is not a 50/50 split but it may be proportional.  What he contributes to the household is far less than it would cost him to live separately underneath a roof.

He'd better not think that this is a reason for him to contribute less to the household!  OMG, that is blunt! 

If I plow enough of this windfall into addressing long-overdue maintenance in this household, he might be happy.  That list is rather long.  Yeah, money is fungible.  

[billisonboard]

Aug 1, 2024 13:59:09 GMT -5 Rukh O'Rorke said:

why deposit slip? Why not zelle? or somesuch?

Because us old folks aren't much up on some of this new fangled techy stuff (would be my guess)  

[Opti]

Aug 1, 2024 14:00:26 GMT -5 resolution said:

The personal finance subreddit has a guide to managing a windfall. www.reddit.com/r/personalfinance/wiki/windfall/ 
The guide references a bogglehead guide as well. www.bogleheads.org/wiki/Managing_a_windfall

My mother in law plans to give us some stock in a regional bank that is worth about $25k. She plans to do half this year and half next year so she doesn't have to mess around with extra forms for exceeding the annual gift amount. I asked her if the actual stock in it has any sentimental value, and it doesn't, so I would like to sell it and put it in an index fund at our normal brokerage. I have no idea how I am going to manage this because we are getting our health care through the ACA and the capital gains will mess up with the income that I reported. But at the same time, I feel like having stock in a regional bank is risky.

The gift is intended to try to even things up between us and his brother and sister, who keep getting subsidies. However we have been told that after this account, they will need all their extra income to go to my BIL. My nephew has some speech delays, so they are paying for private school and speech therapy to help him out.

Do research on the regional bank. Some are risky some are not. Most of them are more conservative lenders than big banks because they do not have deep pockets. No guarantee that index fund will do better or worse than this regional bank.

[Opti]

Aug 1, 2024 14:21:09 GMT -5 billisonboard said:

Aug 1, 2024 13:59:09 GMT -5 Rukh O'Rorke said:

why deposit slip? Why not zelle? or somesuch?

Because us old folks aren't much up on some of this new fangled techy stuff (would be my guess)  

And it might be easier for them. If you Zelle and make a mistake, it is gone. With deposit slips etc. there is a paper trail so a little more protection.

[NomoreDramaQ1015]

We are going to inherit a little over $100k from my FIL's estate.  What we did it sit down and made three lists: what we NEED to do, what we SHOULD do and what we WISH to do.

What we need to do obviously comes first above all else.  

The other two there is some wiggle room.

We get another $38k in the next couple of days.  That will mostly go to the longer term "need" items and "should" list.  However I am going to price out a Disney Cruise.  I want to take a lifetime vacation with the kids.  I will always carry with me my memories of going to Borneo in college.  I want to provide something like that for the girls.

MIL would have a conniption about it but my FIL would approve.  He wanted us to enjoy the money.  Obviously not to the point that we end up on "I won the lottery" but he didn't want us hoarding it all till we pass either.  He told DH his desire was to make sure his kids were taken care of and comfortable.  We plan on honoring that.

[MN-Investor]

Just a word from someone on the other side of this.

Years ago, when my husband and I wrote our wills, we designated nephews and nieces and one sister as our heirs. Since we didn't have children of our own, we figured we'd need all our investments in order to stay independent and to pay all bills through our lifetime. The remainder could go to the kids after we passed away.

It's now 20 years later. I'm 71 and a widow. Our investments have done great and I have more than I'll need in my lifetime. However, I see the challenges my brother's four 20-something daughters have at this stage of their lives. My brother paid for their college educations, so they don't have student loans, but it's expensive for people that age to buy a house and to start a family. I realized that it makes more sense to give money to the kids now, rather than in 20 years or whatever. It won't hurt me financially, so I've been giving them generous checks once a year. It makes my heart glad knowing that I can do that!

As far as the method I use?

For the three nieces who live nearby, I've been giving them checks.

For one of my husband's grand-nieces in Iowa who is attending college to be a nurse, I sent a check via 2-day express made out to the college for her tuition.

For my niece whose grad school I'm helping pay for - I have a Fidelity brokerage account which contains money market funds. I set up a joint account with my brother and sister-in-law at Fidelity and transferred a portion of the money market account into that shared account. They will transfer money to their bank as necessary to pay for tuition and housing. Yeah, I'll have to file a gift tax return next year, but I didn't want my niece to end up with a huge student debt and this is in my budget.

So, to me, this is all just great fun.

[TheOtherMe]

I would not use Zelle.  I will deposit to my bank account on my phone but I will not use Zelle or Venmo.  

[cronewitch]

Enjoy the money and thank them occasionally. Let them know what it means to you. Say things like we went away for the weekend thanks to you. 

I give my niece and nephew each $15K every January the past few years. I tell them it is for investing in a ROTH, spousal ROTH and taxable accounts. I transfer the money right to the investment accounts. They fund 401K from their wages. Gifts as you know have strings. They want you to enjoy the money so you can't really just save it. You can enjoy it and save other money.

I might ask dad if he minds if you borrow mom's car. Then fly to visit or take the bus or train and ask mom if you can borrow the car if you pay for the car insurance. Take the car home and never return it, pay dad if you want to buy it. Tell mom you totaled her car if you need to tell her anything. Then she can have the money you paid for it and not own a car. She will be happy to have you have her car if you don't say you totaled it. Do whatever dad wants about the spare car. 

[bean29]

Aug 1, 2024 14:26:46 GMT -5 NomoreDramaQ1015 said:

We are going to inherit a little over $100k from my FIL's estate.  What we did it sit down and made three lists: what we NEED to do, what we SHOULD do and what we WISH to do.

What we need to do obviously comes first above all else.  

The other two there is some wiggle room.

We get another $38k in the next couple of days.  That will mostly go to the longer term "need" items and "should" list.  However I am going to price out a Disney Cruise.  I want to take a lifetime vacation with the kids.  I will always carry with me my memories of going to Borneo in college.  I want to provide something like that for the girls.

MIL would have a conniption about it but my FIL would approve.  He wanted us to enjoy the money.  Obviously not to the point that we end up on "I won the lottery" but he didn't want us hoarding it all till we pass either.  He told DH his desire was to make sure his kids were taken care of and comfortable.  We plan on honoring that.

I have no concept of what a disney cruise involves and how old the kids are on the cruises. We took our kids to Universal Studios in Florida when they were 17 and 13 and everyone in the family had a great time. Same year we went to LA and stayed at the Beverly Hills Montage, went to a La Dodgers game, went sight seeing on Rodeo Drive, and we went to Santa Monica Pier. It is 95 per person to get on pier now, don’t know if they charged a lot then to or not. DS will be 31 this fall, so it was 14 years ago already.

My brother does family cruises a lot.
His kids were College age when they started. They went to Costa Rico once, and they went on an Alaskan Cruise once too. They did a Disney Cruise last year, but now all his kids have little ones.

[zibazinski]

Aug 1, 2024 14:21:09 GMT -5 billisonboard said:

Aug 1, 2024 13:59:09 GMT -5 Rukh O'Rorke said:

why deposit slip? Why not zelle? or somesuch?

Because us old folks aren't much up on some of this new fangled techy stuff (would be my guess)  

I’m old and I use zelle all the time!

[resolution]

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

[Opti]

Aug 2, 2024 7:47:04 GMT -5 resolution said:

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

What is his thought on Venmo and other apps?

[billisonboard]

Aug 2, 2024 7:47:04 GMT -5 resolution said:

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

And up this popped on CNN this morning: Scam victims on Zelle rarely get their money back. A new bill could fix that

[NomoreDramaQ1015]

Aug 1, 2024 21:59:47 GMT -5 bean29 said:

Aug 1, 2024 14:26:46 GMT -5 NomoreDramaQ1015 said:

We are going to inherit a little over $100k from my FIL's estate.  What we did it sit down and made three lists: what we NEED to do, what we SHOULD do and what we WISH to do.

What we need to do obviously comes first above all else.  

The other two there is some wiggle room.

We get another $38k in the next couple of days.  That will mostly go to the longer term "need" items and "should" list.  However I am going to price out a Disney Cruise.  I want to take a lifetime vacation with the kids.  I will always carry with me my memories of going to Borneo in college.  I want to provide something like that for the girls.

MIL would have a conniption about it but my FIL would approve.  He wanted us to enjoy the money.  Obviously not to the point that we end up on "I won the lottery" but he didn't want us hoarding it all till we pass either.  He told DH his desire was to make sure his kids were taken care of and comfortable.  We plan on honoring that.

I have no concept of what a disney cruise involves and how old the kids are on the cruises. We took our kids to Universal Studios in Florida when they were 17 and 13 and everyone in the family had a great time. Same year we went to LA and stayed at the Beverly Hills Montage, went to a La Dodgers game, went sight seeing on Rodeo Drive, and we went to Santa Monica Pier. It is 95 per person to get on pier now, don’t know if they charged a lot then to or not. DS will be 31 this fall, so it was 14 years ago already.

My brother does family cruises a lot.
His kids were College age when they started. They went to Costa Rico once, and they went on an Alaskan Cruise once too. They did a Disney Cruise last year, but now all his kids have little ones.

Abby loves Disney but the idea of going to the parks is my personal idea of hell no matter how much I love Disney I HATE amusement parks anymore. After playing around on their web site the cruise sounds like it would be the best of both worlds.  The girls get their Disney on but I won't get stabby.  Plus we get to see a lot of places we wouldn't otherwise if we had to book each as a separate vacation.

Gwen made me promise I'll lie about her age and say she is 12 so she can do the Bibbity Bobbity Boutique.  I guess she's wanted to do that since she was a toddler and I am NOT going to ruin her chance by telling them she is 14.

I said doesn't bother me my dad passed me off as 12 till I was almost 17 years old to get the children's discount.  

I've thought about doing Universal since we're probably going on the tropical cruise so we'd be in the area.  I'd really like to see Harry Potter World.  I'd have to price it out or see if we can get a package deal through a travel agent.

[minnesotapaintlady]

I've only been on two cruises so far, and both to the same place, but I'm addicted now...such a chill way to vacation.  If I wasn't drowning in debt right now I'd be booking another one for sure!

[resolution]

Aug 2, 2024 9:13:04 GMT -5 Opti said:

Aug 2, 2024 7:47:04 GMT -5 resolution said:

I listen to the Clark Howard podcast, and he is always saying that Zelle is easier to hack and doesn't have the same consumer protections as the other cash transfer apps. His recommendation is that if you use Zelle, that you connect it to a separate bank account that only contains a small amount of cash that you want to transfer.

What is his thought on Venmo and other apps?

He likes Cash App the best, but he also likes Venmo. He has a review of several cash transfer apps on his site. clark.com/personal-finance-credit/best-way-to-send-money/#h-how-safe-are-the-best-ways-to-send-money-online

[resolution]

Aug 1, 2024 14:26:46 GMT -5 NomoreDramaQ1015 said:

We are going to inherit a little over $100k from my FIL's estate.  What we did it sit down and made three lists: what we NEED to do, what we SHOULD do and what we WISH to do.

What we need to do obviously comes first above all else.  

The other two there is some wiggle room.

We get another $38k in the next couple of days.  That will mostly go to the longer term "need" items and "should" list.  However I am going to price out a Disney Cruise.  I want to take a lifetime vacation with the kids.  I will always carry with me my memories of going to Borneo in college.  I want to provide something like that for the girls.

MIL would have a conniption about it but my FIL would approve.  He wanted us to enjoy the money.  Obviously not to the point that we end up on "I won the lottery" but he didn't want us hoarding it all till we pass either.  He told DH his desire was to make sure his kids were taken care of and comfortable.  We plan on honoring that.

My parents took my sister, her husband, and three kids on a Disney Cruise about 15 years ago. The (now adult) grandkids still talk about it sometimes at family gatherings, and have a lot of happy memories from it.

[Bonny]

Aug 1, 2024 12:13:34 GMT -5 haapai said:

My parents told me a couple of years ago that they intended to start giving my brother and me about a thousand dollars a month when they reached their late eighties.  I sorta blacked out when they mentioned it and never made any plans that involved it.  My dad told me at the time that his parents had done something similar when they reached the same age. 

Last week, dad announced that he had changed his mind and wanted to start giving sooner.  In his words, the money is just piling up and they aren't spending it.  He'd prefer to see us having fun with it now instead of after he and mom die. 

He asked for a deposit slip so that he could set things up. 

It took me five days to tell my partner about it.  I considered saying nothing but my parents want me to have some fun with this money and that puts the kibosh on just funneling it into an investment account.  It is hard to hide an extra $1000 or even $500 a month when you've been living on a take-home pay of $425 a week. 

I suspect that there are a whole lot of other middle-aged folks also getting similar gifts from their parents.  You probably know a few and you should not be hurt if they haven't ever mentioned it, or only told you about it after their parents had passed.  If I lived in the same town as my brother and parents, talking about it would also affect them.  That is, people would assume that my brother was getting a similar amount and they would speculate as to how much money my parents had.  In order to protect other recipients and the givers from unwanted attentions, I'd have to keep mum. 

In my case, the gifts have nothing to do with avoiding state or federal inheritance taxes.  My folks simply do not have that kind of money but that's pretty much the first thing that most folks would assume. 

I'm pretty messed up by this life-changing turn of events.  It's been a week and I still haven't mailed the deposit slip.  Thank goodness you guys are out there for me to ramble at.  If any of you have gotten similar gifts and wish to share some advice, I'd love to hear it.  I feel so alone right now. 

Also, could someone re-post a link to that boogleheads piece on dealing with windfalls?  I think that I need to read it again. 

First of all be grateful and be thankful they have extra money and are starting to share now. I came within days of having to support each of my parents assisted living/skilled nursing facilities since they were so terrible with money. We could afford it but both of us would have been very resentful and it wouldn't have helped our marriage.

Do you keep separate accounts from your partner? This is YOUR money. If your retirement isn't reasonably funded (I seem to recall that you had a late start) you can set aside a portion of that money. Having some fun is important too. If you're worried about an income bump which will affect your ACA status take the time to talk with a CPA and explore something like double-tax free bonds.

I like PatStab's suggestions although I'd be leary about lying and stating that you wrecked the car. That could cause a whole 'nother issue about worry. Maybe mechanical failure?

Good luck and enjoy!

[tractor]

I took a little different path. We inherited over $100k from my in-laws last year. My MIL wanted it to be used towards retirement as most of the family has very little saved. She told me before her death that she knew we were set, and trusted me to decide what was best for us.

We used the money to pay off almost everything we owed, and our kids student loans. Now our monthly incomes go into savings and "fun" stuff without worrying about unpaid bills.

I might suggest you let the funds accumulate to build up an emergency fund, then make larger payments to cover debts. Once the debts are taken care of, the real fun begins.