Author Topic: Childrens Net Worth  (Read 4291 times)

Mister Fancypants

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Childrens Net Worth
« on: January 27, 2014, 12:12:58 PM »
To all the parents out there how do you account for you children’s net worth?

Do you include it in your family net worth or do your account for it separately?

Now I guess for a lot of people it really doesn't matter as kids don't really have much but some of you have kids with a decent sized stache so how do you handle it? I am not talking about 529 accounts as those are my assets that are listing my children as beneficiaries, my children are lucky enough to be the beneficiaries of an insurance payment and by their 18th birthday assuming no investments or any additional gifts by me or other family members each of my children will have accounts worth roughly $120k. I of course will invest it and as they get older teach them how to manage the investments themselves so it should be substantially more by the time they are adults.

I know this is just an accounting question and not of much significance in real terms, but I feel wrong inflating my worth with my children’s worth, yet as minors I manage it and I do feel responsible for it at this point so I also need to take some ownership of it.

Any thoughts?

brand new stash

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Re: Childrens Net Worth
« Reply #1 on: January 27, 2014, 12:20:16 PM »
My kids each have net worth kept in piggy banks and totaling under $20.  But I do manage an account for an elderly relative.  While I'm responsible for the account and keeping watch on it, its not my money, so not part of my net worth.  I imagine that if my kids had any significant money I would treat it the same. 

You can be responsible for money without it being your own net worth.

dragoncar

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Re: Childrens Net Worth
« Reply #2 on: January 27, 2014, 12:38:54 PM »
I wouldn't include anything with them as the beneficiary, unless it was somehow going to reduce my expenses

Nords

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Re: Childrens Net Worth
« Reply #3 on: January 28, 2014, 10:38:03 PM »
I know this is just an accounting question and not of much significance in real terms, but I feel wrong inflating my worth with my children’s worth, yet as minors I manage it and I do feel responsible for it at this point so I also need to take some ownership of it.
Any thoughts?
Yes, you should feel wrong and no, you're not the owner.  At best you're the conservator, and at a minimum you're a fiduciary. 

Ideally you should behave with your kid's assets now (when they're not capable of managing them) the way you want them to behave with yours when you're no longer capable of managing for yourself.

I don't even know my daughter's net worth, but she'll graduate in May with a job and it looks like her net worth is "good enough".  I think this one is flying out of the nest and off the family payroll.

Workinghard

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Re: Childrens Net Worth
« Reply #4 on: January 29, 2014, 04:22:27 AM »
Our son has a small inheritance that is equivalent to an emergency fund from grandparents.  We won't give it to him until he's 25.  I don't want the money used to bail him out or to meet daily needs. I want it to be a blessing, and for him to learn the value of a dollar. 

After finally getting a job yesterday, he's on his way!  He's been either over-qualified or under-qualified. At the last place he interviewed for a $10hr job, didn't get it, but his info was sent to another dept.  After that interview, he was offered another job at $16/hr and they said he would probably be taking a lead position and moving up quickly. We are beyond ecstatic.  Thankfully he had saved a lot of money during BMT and tech school training for the Guard and was able to live off that 4-5 months while applying for jobs.

"His" money is not enough to make a significant difference in our net worth although it IS in our name until we give it to him. 😊

Undecided

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Re: Childrens Net Worth
« Reply #5 on: January 29, 2014, 10:07:49 AM »
Our son has a small inheritance that is equivalent to an emergency fund from grandparents.  We won't give it to him until he's 25.  I don't want the money used to bail him out or to meet daily needs. I want it to be a blessing, and for him to learn the value of a dollar. 

After finally getting a job yesterday, he's on his way!  He's been either over-qualified or under-qualified. At the last place he interviewed for a $10hr job, didn't get it, but his info was sent to another dept.  After that interview, he was offered another job at $16/hr and they said he would probably be taking a lead position and moving up quickly. We are beyond ecstatic.  Thankfully he had saved a lot of money during BMT and tech school training for the Guard and was able to live off that 4-5 months while applying for jobs.

"His" money is not enough to make a significant difference in our net worth although it IS in our name until we give it to him. 😊

You say you won't "give" it to him until he's 25, but it's not clear that that's up to you. Depending on how it was left to him, he may have all the rights to it 18. Not saying that he does, but that it depends on the details.

Mister Fancypants

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Re: Childrens Net Worth
« Reply #6 on: January 29, 2014, 10:37:34 AM »
Yes, you should feel wrong and no, you're not the owner.  At best you're the conservator, and at a minimum you're a fiduciary. 

@Nords Let me clarify a little further, the insurance policy is actually for my wife and she receives a payment my children are also entitled to a benefit of 50% of her payment on top of her benefit (divided equally amongst all children), according to the policy we are entitled to use the children’s benefit either towards expenses for their care including things like a mortgage or rent or it can be saved in their name, we simply need to declare annually to the insurer our intentions.

As we don't need the money we have chosen to put it into savings for them, so I somehow feel like it is a "gift" although there is no gift tax implication. Also my daughters are infants not college age, so they have no concept of worth or money at this age.


I wouldn't include anything with them as the beneficiary, unless it was somehow going to reduce my expenses

@Dragoncar I choose not to use it to reduce expenses but it is at our option, we prefer invest it so that our daughters will have staches when they reach adulthood.

Workinghard

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Re: Childrens Net Worth
« Reply #7 on: January 29, 2014, 03:04:06 PM »
Our son has a small inheritance that is equivalent to an emergency fund from grandparents.  We won't give it to him until he's 25.  I don't want the money used to bail him out or to meet daily needs. I want it to be a blessing, and for him to learn the value of a dollar. 

After finally getting a job yesterday, he's on his way!  He's been either over-qualified or under-qualified. At the last place he interviewed for a $10hr job, didn't get it, but his info was sent to another dept.  After that interview, he was offered another job at $16/hr and they said he would probably be taking a lead position and moving up quickly. We are beyond ecstatic.  Thankfully he had saved a lot of money during BMT and tech school training for the Guard and was able to live off that 4-5 months while applying for jobs.

"His" money is not enough to make a significant difference in our net worth although it IS in our name until we give it to him. 😊

You say you won't "give" it to him until he's 25, but it's not clear that that's up to you. Depending on how it was left to him, he may have all the rights to it 18. Not saying that he does, but that it depends on the details.

It was nothing formal like a will or estate--just grandparents giving us the money and verbally requesting that we give it to him when we felt it was age appropriate.

kkbmustang

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Re: Childrens Net Worth
« Reply #8 on: January 29, 2014, 10:28:23 PM »
Our children, absent funds set aside for college, have low five figure net worths.  They are 9 and 11. We manage those funds but do not include them in our net worth calculations.

Bigote

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Re: Childrens Net Worth
« Reply #9 on: January 31, 2014, 03:09:27 PM »
My son's net worth is under 10k so I've never given it any thought.   Even his 529, which is ~250k, is off balance sheet as far as I'm concerned. 

MrsPete

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Re: Childrens Net Worth
« Reply #10 on: February 02, 2014, 06:41:18 PM »
My kids are not movie stars or child models, so their net worth is pretty close to zero. 

Their college money is in our names. 

Indio

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Re: Childrens Net Worth
« Reply #11 on: February 02, 2014, 07:00:34 PM »
I don't account for my children's money in my financial accounting because it isn't mine to access in. Yes, I gave them the money they earned through working for me and it is in secure accounts, but I no longer view it as my money to use. It would have to be an extremely dire event before I asked them to access it.