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Location: Was Midvalley Oregon; Now Eastside Seattle area
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PRO.
OP, IMO, your plan, for whatever reasons, is acceptable.
Paying off SIL student loan is a relatively small amount to your overall remaining 529.
If asked, we would probably pay off the Loan, if asked or pro-offered. Our DIL and DS are more than self sufficient. DIL and DS are Onlys, and will inherit something from respective parents. My thinking is to rid a lot of our legacy to the extent possible.
disclaimer,
We still have a PLUS (25yr, scheduled payments; 2.5yrs remaining to age 79; current balance ~$27,000). DS paid the payments for first 15 years while we struggled to care for, 4 parents and spectrum BIL.
YMMV
Last edited by leastprime; 10-20-2023 at 12:05 PM..
Interesting!!! I had no idea / expectation of the amount of pushback on this concept. I really was looking for the pros / cons on a strictly numbers approach. But this opens a whole can of worms!
It touches on my whole ignorance of family money.
Well, no matter how hard you try to look at it strictly from the numbers perspective it just isn't that simple. People are emotional beings for better or worse, not calculators. The vast majority don't make decisions based on dollars and cents alone. Especially decisions that involve family members. There's all sorts of history that plays into it: expectations, misunderstandings, assumptions, dependencies, hopes and fears involved. Better to consider them instead of dismissing them.
My father left me and siblings a sizeable amount from his purchase of philip morris back in the 50s. (actually, he set up a trust and we got 1/3 of the shares when I turned 30, 35 and 40). But he never said what he'd suggest / expect us to do with the money. And I realized after he was gone, that we never took the initiative to ask. He worked till days before he died, never took vacations, etc.
From a legal point of view, your father would have had to stipulate any conditions on the money in his will. Given that he didn't, legally speaking, the money is yours to do with as you please. Morally speaking, again, if he had expressed a desire on how it should be used, it would be proper to follow that desire, or at least have a really good reason why you didn't. But he didn't express any desires on how it should be used. Therefore, again, it's yours to do with as you please. I'm sure you could think of ways that you could use some or all of the money in ways that would honor your father's memory and his generosity.
With the divorce rate as it is, be very wary of losing control of your money. I have had some friends really burned by paying major house downpayments only to have the DIL or SIL walk off with half the money after a divorce settlement.
Tough crowd, already plotting the daughter's divorce. Sure, it could happen. But the kids might also remain together for the rest of their lives, and the OP might love the son-in-law as his very own son. Either way, when one is giving money, one should base the gift on how things are now, not the worst case of how they might turn out later. If the OP desires to provide money to his daughter and SIL, let him. And once it's out of his wallet, it's out of his hands, and he need not worry about what happens to it after that.
529 plans a huge waste of investment $. It's better to buy a house or a portfolio containing just the top ETF money and let it grow. 529 is locked and it only benefits these management companies. With high divorce rates and future kids changing their mind on future goals.
Interesting!!! I had no idea / expectation of the amount of pushback on this concept. I really was looking for the pros / cons on a strictly numbers approach. But this opens a whole can of worms!
It touches on my whole ignorance of family money.
My father left me and siblings a sizeable amount from his purchase of philip morris back in the 50s. (actually, he set up a trust and we got 1/3 of the shares when I turned 30, 35 and 40). But he never said what he'd suggest / expect us to do with the money. And I realized after he was gone, that we never took the initiative to ask. He worked till days before he died, never took vacations, etc.
So we have a bit of a stigma about enjoying it / using it - we didn't earn it.
I would like my kids to use it / make their environment better. So again, their money / my money is a bit of a foreign concept for me. I would look at things strictly on a numerical basis.... factoring in taxes, etc., what's the best way to pay off his student loan.
If your daughter inherited money, would you have the same negativity to them using some of the money to pay off the SIL's student loan?
Admittedly, its fungible. Use the inheritance and have 10K left in savings. Or use savings and have 10K more in the inheritance. it's their money either way?
It seems you want others to justify you doing this, but at the same time you are determined to do it. OK, that seems off. You seem to seriously brag about being well off, and that they are doing exceptionally well. I wondered just how long the couple has been married, and probably about how old everyone is in this scenario, as over time, I have seen a lot of changes in "situations".
There is a difference in inheriting the money, and asking for money from the in-laws. Why? I would think that would be obvious. I'm thinking you may not know the whole picture of their financial situation, and what's going on with them. Maybe he didn't ask, and if not, maybe he would want to pay off his own debt, and be embarrassed that she asked for the money. Of course, myself and my husband paid off our own student debts, and I could never have imagined asking either set of parents to chip in.
Quote:
Originally Posted by evening sun
Isn't the 529 for the gks education? Do they have some kind of financial problems where they cannot pay off the debt themselves? It is very strange to ask a parent pay off debt, if they are doing Ok financially.
You and I are thinking along the same lines. I think there may be "more to the story", and that would probably help the OP to know that, just to be comfortable with the situation. I would think with times changing that the grand kids may need the help with expenses with housing, etc. skyrocketing.
Quote:
Originally Posted by InvestorWithQuestions
OOOW!!! Almost hostile now! : )
again, different views and way deeper conversation than I envisioned!
The money is fungible. 529 has tax advantages to use for someone's education. Checking account has no tax advantages.
Take 10K from savings or 10K from 529, it's still $10K gone in 1 place, $10K still in another place : )
And both places are 'theirs' in my view. I AM still owner, daughter is still beneficiary. I was against using the 10K from 529 for his loan because of the steps to change beneficiary, potentially trip up on small print and my thinking that the $10K in the 529 will grow tax free.
Never was a question of him leaching off us!! And I am not sure, but would think it was my daughter that brought up the idea.
I think there is more to the story. If they are going along fine financially, I am just not sure why she would ask. So, you aren't sure who brought up the idea? Make your decision, but if it were me and I was seriously considering it, I would bring up the grand kids, and how I hoped the money would be there for them, and see where that conversation goes. The way I am understanding it, once transferred, they could just spend the money and the pot would be empty for the grand kids, right? I would just knock it around in a conversation. You didn't mention a mother, so I am guessing the decision is totally yours, as having input from another close family member who understands your situation might be more helpful to you.
Quote:
Originally Posted by evening sun
Well do what you want, give him 10k, but leave the money in the 529 for the gks. Are you sure they are doing OK financially?
My concern would be if there might be an addiction that is draining their finances, as something seems off.
My issue is that some of us are middle Americans and middle income. We don’t know about East or west coast money. Some of you have big numbers in play, but most of us do not.
529 plans a huge waste of investment $. It's better to buy a house or a portfolio containing just the top ETF money and let it grow. 529 is locked and it only benefits these management companies. With high divorce rates and future kids changing their mind on future goals.
Not in my experience. We paid into one, for our youngest and it paid for his college expenses. An associates degree that took 3 years, lol.
It seems you want others to justify you doing this, but at the same time you are determined to do it. OK, that seems off. You seem to seriously brag about being well off, and that they are doing exceptionally well. I wondered just how long the couple has been married, and probably about how old everyone is in this scenario, as over time, I have seen a lot of changes in "situations".
There is a difference in inheriting the money, and asking for money from the in-laws. Why? I would think that would be obvious. I'm thinking you may not know the whole picture of their financial situation, and what's going on with them. Maybe he didn't ask, and if not, maybe he would want to pay off his own debt, and be embarrassed that she asked for the money. Of course, myself and my husband paid off our own student debts, and I could never have imagined asking either set of parents to chip in.
You and I are thinking along the same lines. I think there may be "more to the story", and that would probably help the OP to know that, just to be comfortable with the situation. I would think with times changing that the grand kids may need the help with expenses with housing, etc. skyrocketing.
I think there is more to the story. If they are going along fine financially, I am just not sure why she would ask. So, you aren't sure who brought up the idea? Make your decision, but if it were me and I was seriously considering it, I would bring up the grand kids, and how I hoped the money would be there for them, and see where that conversation goes. The way I am understanding it, once transferred, they could just spend the money and the pot would be empty for the grand kids, right? I would just knock it around in a conversation. You didn't mention a mother, so I am guessing the decision is totally yours, as having input from another close family member who understands your situation might be more helpful to you.
My concern would be if there might be an addiction that is draining their finances, as something seems off.
It's only 10k. It hardly matters if you use the 529 or write a check. I admit I would be mortified to have an in-law paying anything for me.
5 degrees is interesting. Are they all in a related field or has he been a "professional student?"
Personally I would keep the money with the intent to use for the grandchildren. I know too many people supporting their adult childrens' lifestyles to be enamoured of giving adult children money.
No telling if the grandkids will be scholars or burnouts, but it's nice to have it for them if they need it.
As for the 10k, pay it off if it makes you happy. See if it's the end of them asking for money.
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