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Show them the money!


Gifting money to your adult children can come in many forms but always starts with a discussion

We frequently have clients asking us how they can best gift some money to their adult children, so we thought, why not write an article about this? After all, you worked hard for your money over the years, likely with the hope that you could use some of that money one day to help your kids pay for their wedding, finance their first home or buy a car.

But where do you start?
You probably want to start thinking early on about how you’re going to discuss this money transfer with your adult child. Although gifting money to a child can be a wonderful event for everyone involved, money is always a potentially sensitive topic. You should be ready with answers to questions like: “Why now?”, “How much are you thinking of giving?”, “Will you be okay financially if you give me this money?” and “Are all my siblings getting the same amount?”

Some key decisions
An important and somewhat obvious decision you should consider is how much you can afford to give. It’s probably not a good idea to dip into your retirement savings for this money, but to consider some of your discretionary cash. From that pot, you should consider a percentage that might make an impact on their life, but will not have a significant impact on yours. If you’re concerned that your child may not handle a lump sum wisely, you can always give them smaller amounts in regular intervals, rather than the full amount all at once. Again, be sure you can explain your reasoning behind the amount you’re giving to assure your adult child that you can live comfortably without this money.

Another big decision is when to give. Often a big life event is the perfect time to make a positive impact. They’re worried about how they are going to pay for their wedding? Give them money to reduce this concern. Buying a new home? Help them with their down payment.

If your adult child doesn’t have any immediate financial needs, but you’d like to give them some money to enhance their lives, consider putting that money into some type of investment that can potentially grow over time for them. It’s the same as having the money, but with the benefit of putting it to work for them until they need it.

There are many things to consider when gifting money to your adult kid, including potential tax consequences. Contact our office today at to hear more of our ideas on how to get the conversation started.

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