Author Topic: Monetary Gift for an Adult Child  (Read 2165 times)

Tenlha

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Monetary Gift for an Adult Child
« on: May 25, 2015, 09:51:21 AM »
What's a good way to give a gift of $10k in about five or eight years? I have the cash now but want to save it to give when he's ready to buy a house or get married.

forummm

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Re: Monetary Gift for an Adult Child
« Reply #1 on: May 25, 2015, 10:06:55 AM »
For a kid, you could just open an IRA for them as a UTMA. Although it sounds like you want to give it as taxable, so it can be spent.

Is the idea to have exactly $10k in an unknown amount of time? Or to invest the $10k to increase the size of the gift?

You could just invest the $10k however you normally would and then write a check when the time comes. 5-8 years is a pretty long time horizon. And if the market tanked, you could either supplement it or just give $5k or whatever.

Tenlha

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Re: Monetary Gift for an Adult Child
« Reply #2 on: May 25, 2015, 10:10:20 AM »
I should note that he is now 24.

MDM

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Re: Monetary Gift for an Adult Child
« Reply #3 on: May 25, 2015, 11:52:08 AM »
What's a good way to give a gift of $10k in about five or eight years? I have the cash now but want to save it to give when he's ready to buy a house or get married.
5 year CD?

Davids

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Re: Monetary Gift for an Adult Child
« Reply #4 on: May 25, 2015, 12:56:35 PM »
I would just put the $10K in either Vanguard Total Stock Market or Vanguard S&P 500 fund and then sell it in 5 years when you are ready to gift it.

norabird

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Re: Monetary Gift for an Adult Child
« Reply #5 on: May 25, 2015, 05:39:58 PM »
I suppose you should inves it now for him; the IRS will allow this amount as a straight cash gift when the time comes, so that part is easy.

thedayisbrave

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Re: Monetary Gift for an Adult Child
« Reply #6 on: May 25, 2015, 05:57:29 PM »
I suppose you should inves it now for him; the IRS will allow this amount as a straight cash gift when the time comes, so that part is easy.

This is my thinking as well.... the IRS gift tax exclusion is up to $14K at this point, so you can safely gift it to him when the time comes.  Since it's still a good amount of time away, I would just continue investing like normal and re-visit this topic when it gets closer to the time you want to gift him the money.  Unless for some reason you think you won't be able to scrape together $10K in 5 years' time.