Totally unexpected...what to do...

MommyLiberty5013 · January 2014

My family celebrated a belated Christmas earlier in January. My grandpa came in. He gave each grandchild, great grandchild and any spouses of grandchildren, $2,500. My husband and I received a single check for $12,500. (5 of us in our family).

His reasoning was that he and my grandma had very little money and her aunt sent them $25 when they were newly-married to buy a blanket. They felt "rich." And they spent $2 out on the town for dinner and a movie. Grandpa's idea was the same in giving this gift. In the letter that accompanied the check, he did not specify what we should or shouldn't do with the gift. He also said that they never did buy that blanket.

Separately, my mom pulled me aside and said that she knew he was going to do this. Then she said that she thought he was going to write us 5 separate checks. She said that his intent is that each of us get exactly $2,500 and make each check out to each separate recipient.

DH and I have our 3 kids' savings accounts and they each have 529s, which are well-funded. We have a small personal loan to DH's parents and we are saving for a used Toyota Sienna.

With DH's job and his future guaranteed income potential there, as well as income we will get from his family's farm, DH wants to take the $12,500 fully and put it toward the loan and car savings. I feel a bit torn. His reasoning is that our kids will always have what they need and we are being diligent about saving for them. He also sees value in not dumping a ton of money on kids so they learn the value of it and learn to work hard. I do agree with him. But, I have a twinge of guilt not putting each child's supposed $2,500 into their accounts. He said we could still do like $500-$1000 for each kid into their savings. So it wouldn't be like they were short-changed.

Getting rid of this personal loan and getting the minivan will greatly help us and them as once they are done, we can save more for us and them.

So, what would you do despite the fact that my Grandpa did not lay out "terms and conditions" for the gift? The only reason this is a question is due to what my mom told me. It wasn't that she was dictating to us, she was just giving us an FYI point.

vlagrl29 · January 2014

my own personal opinion is I would make sure the kids got the money the grandpa intended, but that may be because we don't have a 529 for DD, she has a savings account. We don't donate a lot of money to it because we don't have a lot of excess cash to do it.

Xstatic3333 · January 2014

vlagrl29 said:
my own personal opinion is I would make sure the kids got the money the grandpa intended, but that may be because we don't have a 529 for DD, she has a savings account. We don't donate a lot of money to it because we don't have a lot of excess cash to do it.

Me too. I tend to keep an emotional attachment on large monetary gifts from family though, and like to use them for things other than debt. This may not be the right attitude from a MM perspective, but it's just how I feel and tend to operate.

brij2006 · January 2014

I would probably put each childs' $2,500 into their 529's, and use you and your H's $5k to pay off the personal loan and put aside for the purchase of the van.

RenoisPrettierThanYou · January 2014

I'd put the money in an account for the kids that they can access when they're 18. I had money taken off of me when I was a kid that had been gifted to me. I understand why my parents took it, but it was still sucky.

smbenevides1989 · January 2014

As other pps said, I would give each kid their $2500. I would put it in a savings instead of their 529 that way they can purchase their first car, etc. I would then take the remaining money and put it towards the loan and savings.

Money gifted to them is money for them.

Ducktale · January 2014

Agree with PP. I'd put the money in the kids accounts.

MommyLiberty5013 · January 2014

Thanks everyone! You have all confirmed my feelings.

maple2 · January 2014

Although I agree with pps for the most part, I do think it is okay to spend some money that is gifted to children in a way that directly benefits them now instead of saving everything for the future. For instance, to help pay for a family vacation or a musical instrument or a backyard play set or whatever. If I were in your situation, my inclination would be to save the money for the kids. DH might be able to talk me into contributing some of the kids' money towards the mini-van but definitely not the loan.

Sisugal · January 2014

For kids - 2K to their education fund
$1K for other items for the kids (summer camp, piano lessons, sports etc.)
Rest on goals for you and DH.

hoffse · January 2014

I think each child's share should go to their 529's in full. Even if grandpa didn't stipulate T&Cs, you know his intention and it wouldn't surprise me if he followed up with you about where that money went - just out of curiosity. You don't want to tell him that you and H took the entire thing.

Re: 529's vs. other accounts - of course this is up to you, but that money can really be put to work in a 529. I think that your kids will thank you once college becomes a thing. I don't know if you've looked at prices recently, but it's kind of breathtaking. I know that I had a different experience than a lot of people on these boards, but my education was hands down the best thing my parents have given me to date. It was better than my flute, better than my car, better than 13 years of dance lessons. If they ever got a check like that for me (and I don't think that happened), I would hope that they put the entire thing toward my education. Their ability to help me finance Vanderbilt with minimal debt - on two teacher's salaries no less - was incredibly valuable to me. I don't want finances to stop my kids from going to tier 1 schools if they can get in. And 10-15 years from now, even state schools are going to be tens of thousands of dollars each year for in-state residents.

kac · January 2014

I would use only yours and DH's share for debt. The kids should each get $2500 in whatever account you see fit. Unless your children are young and you will replace the $2500 next year or the year after that, but you would actually have to do it which I think would be hard because there is always something to save for with kids.

JuneMrs · January 2014

I would deposit each kids full amount into either their own savings/529. It wouldn't feel right to me to put the $ towards anything that wasn't for them directly.

Totally unexpected...what to do...

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