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Dear Quentin,
My 34-year-old son is getting married this summer. We have an on-and-off relationship, which is especially complicated by the fact that he was dependent on us financially throughout his 20s. We are bitter that he is ungrateful for the support we gave him. He is bitter because he thinks we try to control him with money. We are middle-of-the-road economically, if this matters.
Our financial support didn’t create major economic stress, but it did have a slight impact on our retirement target date. We no longer give financial support, but I know that he and his fiancée are not stable financially, and also not very industrious in trying to solve that problem. For the record, part of the financial support was for an apartment and tuition and expenses when he went back to school after dropping out, and his degree makes him quite employable.
For their wedding, we want to give a nice-sized gift (maybe around $10,000), but we don’t want to return to the patterns of the past. We are worried that he/they will just use up whatever we give for their current lifestyle, and maybe even expect to be back “on the payroll.” Is there a way to give a financial gift that can’t be touched for at least 10 years?
Do you have any other suggestions on how to give a gift given the complexity of finances in our relationship?
The Father
Dear Father,
Gifting money with the expectation that your son’s demeanor or behavior will somehow alter is a mistake. Will he thank you for the gift? (Let’s hope so.) Will he call you more than once a month? Or invite you for dinner more often? Whatever the roots of this schism, don’t expect $10,000 to change that.
People are who they are, and they show love and gratitude (or choose not to show it) in their own way. If you give your son and his wife $10,000 with the expectation — an emotional place that is dangerous ground for parents and children alike — for something in return, don’t give it.
If you do give him $10,000 as a gift — and it is a generous one — do so without strings. Otherwise, you are repeating old patterns. You may be waiting for him to respond in a way you deem inadequate, and he may feel increasingly disgruntled over your perceived control.
Drama and the feelings of anger it produces can be addictive. You may be setting yourself up here to prove your thesis by gifting your son and his wife $10,000 with instructions on how they should use the money — knowing deep down it will trigger all of these past resentments.
On a practical level, the annual gift-giving exclusion is one way to transfer wealth to the next generation. It currently stands at $17,000 per year, or $34,000 if that money is coming from a married couple. Educational expenses and medical bills do not count toward that limit.
Larger gifts do not incur tax liabilities if they are calculated as part of the Internal Revenue Service’s lifetime estate and gift-tax exemption of $12.92 million in 2023 for individuals and $25.84 million for married couples filing jointly.
So what do you do? Make sure that you are not compromising your own ability to save for retirement, please ensure you have enough money set aside for emergencies, and be careful about setting a precedent where your son expects $10,000 from you on a regular basis.
But it’s a wedding and guests — parents included — often give cards with a monetary gift. You could split the difference: give him $5,000 for miscellaneous expenses, furniture for their new home etc., and tell him you would also like to get him a gift that he needs: a sofa or bed etc.
Oftentimes, tricky scenarios are solved by picking up the phone, or inviting them for dinner and talking face to face. It may be that you are both as stubborn and/or proud as each other or, even better, that you both have some misunderstanding about the other’s motivations.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.
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