Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho
Alice and George bought a house for their daughter, Ellen, four years ago. Ellen is divorced, has a six-year-old child and works at Target as a clerk. She has not paid the property taxes, so Alice and George just paid two years of taxes to help Ellen. The parents are uncomfortable helping Ellen and not helping their other two children, Sam and Jim. They decided to gift an equal amount to the two sons so everyone is treated equally.
What is the problem? Alice and George are retired and cannot replace this money. They are not well to do.
It is hard for a parent to see an adult child struggle financially. Sometimes parents will even go into debt or co-sign on a loan with a child to get them out of a jam.
What is the solution? The parents need to talk with their children and explain that they cannot support them. The children are adults and need to figure out how to support themselves and live within their means. If the parents keep gifting, the children will end up supporting the parents when they run out of money.
