Why I’m Giving My Children Some of Their Inheritance Now

In Social Security and Retirement On

We now have a little bit of extra income. And because we are hopelessly middle class, there isn’t anything outlandishly expensive that we want to spend it on. For example, we would feel uncomfortable taking a three-month vacation, even if my wife could get away. And we like the cars we have just fine and don’t feel compelled to upgrade to something that would cost 80 times more, although Alison does drool every time — twice so far — she sees a McLaren P1 LM on the street (sticker price: $4 million).

So we have made a decision that gets some people to look at us strangely.

We have started to give our children some of our money.

We are not setting up substantial trust funds. Heck, we are not even fully taking advantage of the tax code that says I could give each kid $14,000 a year, and Alison could, too, so that we could end up gifting each of our four children $28,000 a year with no tax consequences to either us or them.

We are not even averaging half of that. But for the last four years, right around the holidays, we have given them checks — along with traditional presents. So far the total allotted in aggregate to the four of them adds up to about three years of higher education at a good private college.

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