Should I gift my kids fairly or equally? It’s a question all parents must answer at some point. Of course, we want to be equal with our kids but what happens when it’s time to give to our grandchildren? Imagine you have two kids, one of them has three kids of their own and the other has five, are you going to give more to the family with more children?
There is no correct answer to this question, and each family must decide what works best for them. Below are three options that have been effective for the families we work with depending on their needs:
- Give the same amount per person: the method is that each individual is equal regardless of who the parents are (for blended families or for those children who had more kids than their brother or sister). This makes it easy for tracking purposes and conversations within the family.
- Give the same amount per family: this means that if you have those two children we mentioned above, you will now assign an amount to each of their families regardless of how many children they have. Note, this will result in giving less per grandchild to the family that has more kids.
- Give per need that arises: in this example, you are giving to the child that needs it the most. Either not as much or at all to the one that doesn’t need it. This can work through over-communication, it’s important to explain why it’s done this way, or you can add an equalization clause in the trust that will deduct the gifts throughout the lifetime and equalize the inheritance at death.
No one wants to feel left out or loved any less. We recommend having a family meeting to talk about an overall gifting plan or strategy to put everyone’s mind at ease. At a minimum, there should be a lengthy conversation between the heads of the family.
Sitting the family down to talk about why you and your spouse have chosen to gift the way you have will bring transparency between siblings. You might be thinking, “Well, this is our money and we can do what we want with it.” And you are 100% correct! But after you both pass, the last thing you want is to leave behind confusion and animosity between siblings and family members only because you didn’t want to have the conversation ahead of time. It will be worth the time spent!