Gift Suggestions for Adult Children From Senior Parents
By Space Coast Daily // August 28, 2020
Although your children may be grown, you still want to provide for them as much as possible. Providing cash is an obvious option; however, giving cash to adult children could generate undesirable tax liabilities.
By contrast, obtaining life insurance can ensure that your final expenses are covered without generating tax liabilities.
Likewise, non-monetary gifts may be the most appreciated by your adult children, while costing you little or nothing.
Cash Gifts for Adult Children
Many young adults struggle with saving enough money for a standard 20 percent down payment on a home along with covering rent, car payments, and providing for their children.
The IRS allows each parent to give each adult child up to $15,000 annually without incurring tax liability. If each parent contributes the maximum amount, that adds up to $30,000 — which translates to a substantial down payment.
Many young adults with families find it difficult or impossible to afford expensive vacations, opting for “staycations” instead.
One alternative to a direct cash gift is paying for airfare, accommodations or both for a family getaway. Many adult children would also appreciate having a parent take over at least some of their car payments.
If your adult child would benefit returning to school, the IRS allows parents to make unlimited gifts toward covering an adult child’s educational expenses, but there’s a catch.
The money must be paid directly to the educational institution — not given to the child. The IRS also allows parents to provide unlimited funds to cover an adult child’s medical expenses, with the same limitations as those for educational expenses — the money must be paid directly to the medical provider or institution, not given to the child.
Covering Your Final Expenses
No one likes to think about the end of life, however, obtaining a life insurance policy is one of the best ways to ensure that your children won’t bear the financial burden of covering your final expenses. Life insurance policies can be applied to outstanding debts, as well as used for funeral or cremation costs. And unlike cash gifts, life insurance policies are not subject to income tax obligations.
Depending on your circumstances, you may opt for a term life insurance policy with a coverage length of up to 30 years, or a permanent life insurance policy with an unlimited coverage length.
Term life insurance policies are cheaper; however, permanent life insurance policIes build cash value that policyholders can borrow against if needed.
It may be a cliché, but many of the best gifts in life really are free. If you live close by, offer to babysit your grandchildren to allow the parents to enjoy a date night for just the two of them.
A home-cooked meal is another tasty gift that gives your adult child a night off from kitchen duty — and one you can share along with them.
Gifts for Your Adult Children
As a parent, you always desire the best for your children. If your financial means allow, you can provide your adult children with substantial cash gifts to help them afford a new home, train for a new career or get relief from a car note or medical bills.
Obtaining a life insurance policy can ensure that your final expenses won’t be a financial burden to your children. On the other hand, some of the best gifts you can give your adult children, such as babysitting your grandkids, don’t cost a penny, and are often the most appreciated gifts of all.
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