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Lending Money To Children?

Jilly's picture

How do you feel about lending money to your children?

This is about my own son and not my stepchildren.

My son is 37, and is in the middle of a divorce and the lawyers fees cost a lot of money. He wants a loan from me. I do not feel this is the right thing to do as I helped him out for three months (not paying rent or housing costs) when he moved out from his wife's house who will soon be his ex wife. My husband and I gave him space to get on his feet for three months so that he could save and get his own apartment.

Now he wants assistance with his divorce costs and I am of a good mind to tell him NO. He got himself into a mess with his wife and his divorce, now he can get himself out of it.

Would you lend your child money? Even if he promises to pay you back?

Comments

Tuff Noogies's picture

for this, if i had it, i would. where i am, attorney's cant work on a contingency for divorces, they are required to be paid as they work. not sure if that falls under law or ethics, but either way. i've been through one shitty divorce and it would have been incredibly helpful if i'd had some financial support.

if you feel u've helped him enough, hey, it's YOUR money to use however YOU choose.

Ljcapp1's picture

I've never been the lender, but I have borrowed money from my parents. Not for a divorce but for first and last month's rent one time. I hated to ask...it's not easy to ask for money from your parents. I imagine if he's asking he really needs the money. Maybe you can agree to have him pay back X amount per month.
If your H and you have combined finances is he ok with lending?

Justme54's picture

No, I strongly advise you to not do it. 3 months of free rent is a big help. He got that help indirectly from your Stepdaughter as it is her house.

hereiam's picture

If in your gut, you don't feel it's the right thing to do, don't do it.

Three months of no rent should have allowed him to save something, other than just money for an apartment. He will have to figure something out.

LONGTIME SM's picture

Since you previously said money was an issue for you and you felt it would be hard to put up 20% of the condo cost - NO - you should not loan him the money.

twoviewpoints's picture

that's actually been my self 'rule' with my own children and SS. I don't loan money. I may however hand cash over free off any strings attached. My second part of the 'rule' is , no I will not enable, If I felt they expected it/felt it was their due right and/or were doing nothing to help themselves my pocketbook wouldn't even think of opening.

twoviewpoints's picture

If you decide to loan/help out your son 1)it should be your own personal money and not your husband's 2)you should make absolutely sure you can live without the cash you hand out. Meaning if it shortens your ability to pay your own share of living cost, don't hand it out. If it never gets paid back, will the loss hurt you financially 3)make repayments reasonable. Realize that as a new divorced man he will have housing cost along with child support plus any possible debt that needs settled in the split between his 2bex and he.

If you can't do all of the above, keep your pocketbook closed. It's perfectly ok to simply tell your son that retired living on a restricted budget means just that. You don't have extra money to spare. Your son may have to get a second job to find his way.

Glassslipper's picture

No.
My parents never lent me money, ever.
I never asked either.
I've made it on my own, without help.
My divorce costed 10,000+.
I paid it myself, while moving out of my house and paying rent and buying 1/2 the furniture I lost in the divorce, and raising 2 kids and only working part time while looking for full time and making a car payment and 1/2 the $60,000 my ex ran up in credit cards spending all our money on his girlfriend.
I did it without mommy and daddy's help and I'm a smarter spender and saver for it too!

kathc's picture

Based on how you've told us about your son getting in your SD's face about the house that he was living in rent-free I would suggest you NOT loan him any money. If you want to GIVE him money, and you can afford to do so, that is your business. But I can't imagine someone who would act like that would actually repay you on a loan. What I see as a more likely scenario based on his past behavior is you ask him to repay you after waiting patiently for the money and not getting it back and he throws a fit and attacks you for daring to ask for the money you loaned him.

Sweet T's picture

I had to cash in 401K to divorce my loonatic ex. I have a rich aunt and never would have asked her to help..even though ex thought I did and actually complained about that in the divorce paper work to the judge. You son should do that or a 401K loan.

BethAnne's picture

My father loaned my husband and I some money to help towards purchasing our house. He offered, repeatedly while we were house hunting and we thought about it, but in the end it made sense to take the money. We came up with a repayment plan that my dad approved and we all wrote down and signed. I know that my dad can afford to lend the money. I know that we will repay the money, on schedule, if not before. As such I know that it will not be an issue in our relationship.

If you feel any doubt about lending the money don't do it. You will only grow to resent it. I've been bitten before lending money to friends, so am very wary of it now.

My personal list of things to consider are:

1. do you want to?
2. can you comfortably afford to?
3. what repayments would you expect, are they reasonable for your son to afford, do you want interest, is your son ok with that?
4. does your son have a good history of repaying his debts, do you trust him?
5. is there an alternative way for him to get the money that would work out more beneficial for him or not be too detrimental?
6. does him having the money now significantly help him out and save him money/stress in the long run?
7. will you feel resentful if he takes the loan and then goes on holiday or buys expensive toys while you feel he should be living a more modest life and paying you back as quickly as he can?

If any of these could cause issues, then don't give him the money. Just let him know that you don't want to complicate your relationship and are happy to help him out in other ways, like you have been with a rent free place to stay, but that you don't want to lend him money. Don't tell him you can't afford it (or he will just resent you when you buy your condo, or spend money on other things), tell him the truth.

DaizyDuke's picture

I have NEVER asked my mother or father for money and don't to intend to ever do so. But with that being said, if BS5 asked to borrow money in the future (BORROW) being the key word, depending on the way he was conducting himself (living within his means, working, being decent) I would loan him money if I had it to loan. However, it would be clear that it was a loan to be paid back within a specific period of time and this would be a one strike and you're out deal.... if terms were not met, then don't ever come to me for money again because then it just becomes enabling.

Jsmom's picture

Depends on the kid. If he is trustworthy and will pay you back, do it. If not, no. He can take it out of his 401K or if he has a whole life policy, take the loan out. I did that once when I was trying to buy a house.

If it was mine, I would, but honestly, if he was that age, he should have the means by now to do it himself.

Abby1979's picture

I agree with others in only doing it if you can afford to consider it a gift. Personally I would.

misSTEP's picture

There are ways that you can lower a lawyer's costs. Has he inquired on that at all or just taking the first attorney who made it sound like he can get everything and ex will get nothing?

ltman's picture

Aren't you and Dh trying to buy a new condo? Tell him your cash is tied up in that venture. Son needs to get himself out of his own mess.

MidwestStepmom's picture

He's 37, he should be able to do this on his own. If he doesn't have the means then he will have to figure it out like a big boy. I stopped asking for money when I was 18.