Financial Future for our Grandkids

by | ImPower for Individuals

NOTE: This article written by Suzanne originally appeared in the March 2017 edition of Grey Power magazine

Our children’s children are living in a world where debt is becoming the norm and the hope of ever owning a slice of New Zealand ‘paradise’ is becoming more of a pipedream.  It’s not surprising really – just look at the country’s high house prices and the student debt ‘noose’ that the younger ones are facing.

 

This worry about the future generations has been a discussion point with a number of our older clients.  They are usually pretty confident that their own children are reasonably placed financially for their future but they are concerned about how the grandkids are going to fare & wonder what they can do to help.

This is a tricky one as every family dynamic and circumstance is different so it’s not a ‘one size fits all’ approach.

If this is something you’ve been pondering, here’s just some of the considerations I think you should keep in mind:

1. Fairness

  • Is treating every grandchild the same, an issue or priority for you?
  • How can you treat them fairly when each are so different?
  • Would there be any issues of fairness with your own children?
  • Would it cause any family disharmony?

2. What would you like to do for them?

  • Define how you want to help them?
  • What can you reasonably afford to do?
  • Age of the grandkids

3. Would the grandkid’s age affect the purpose of why you would be doing it?

  • Would you put any age restrictions?
  • Purpose and/or Limitations

4. Are you going to specify a purpose?

  • What, if any, limitations would you impose?
  • How can you monitor it?

5. Structure

  • Is this a formal or informal arrangement?
  • Does each of your children know what every grandchild is getting?
  • What if the grandchildren are a little older and have partners?

6. Location

  • What if your grandchildren are spread across the globe?

7. You

  • How does this affect you financially now and in the future?
  • Would there be any gifting consequences?
  • If you have a partner – are they on the same page as you?
  • What if your partner is not the biological grandparent?

8. How involved in the process do you want your own kids?

  • Do you want and trust your kids to manage whatever you decide to do or do you want to do it yourself?
  • Are there any pride factors to consider e.g. would your children get offended if you helped financially?

9. Knowledge

  • Would you like the grandkids to know how you helped?
  • Would they actually be grateful?

As I mentioned above, it’s very tricky.  There is no right or wrong and in some cases there maybe a number of options and a number of competing factors to consider.

You don’t have to do anything but if you do consider doing something, it’s extremely important to ensure that you do not compromise your own situation, welfare and standard of living now or in the future in the process.

 

Suzanne Baldwin is the co-owner of ImPower Limited. Suzanne is an Authorised Financial Adviser and Certified Financial Planner (CFPCM) and her disclosure statement is available free of charge on request by emailing Suzanne at zn.re1553394259wopmi1553394259@niwd1553394259lab.e1553394259nnazu1553394259s1553394259 or by calling her on 027 274 9756

Suzanne Baldwin

Financial Impowerment Specialist

Suzanne Baldwin is the co-owner of ImPower Limited. Suzanne is an Authorised Financial Adviser and Certified Financial Planner (CFPCM) and her disclosure statement is available free of charge on request by emailing Suzanne at zn.re1553394259wopmi1553394259@niwd1553394259lab.e1553394259nnazu1553394259s1553394259 or by calling her on 027 274 9756

 

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