DEAR SOMEONE ELSE’S MOM: Back when we were starting out, my in-laws very generously “loaned” us some money for the down payment on our first home.
After we made less than half the payments on the loan, which we did faithfully, my father-in-law sent us a letter signed by him and my mother-in-law saying our debt was paid in full. We were pleasantly surprised and used to talk about how we would like to do the same for our kids, if we were financially able to, when it was their time to become homeowners.
Both our daughters are now in homes they bought, one on her own, the other with her then fiancé, now husband. We were happy to be able to help them out with the down payments, and now after a couple of years of their making payments, I want to return the kindness given my husband and me by forgiving the rest of the loans.
We can easily afford to do this, and I see it as a way to repay a debt to and honor the memory of those no longer with us.
My husband doesn’t agree with me, and thinks it’s a life lesson in always paying your debts in full.
I am honestly very upset with him for forgetting the promise we made to ourselves all those years ago in appreciation of his parents’ kindness and generosity.
We’re looking for some kind of compromise here. Can you think of any? --- GOOD WITH FORGIVING THE DEBTS
DEAR GOOD WITH FORGIVING THE DEBTS: Since your children have been repaying their loans, it seems to me they’re already demonstrating a good level of responsibility, so I’m not sure they necessarily need a lesson in that area.
What I’d suggest running by your husband is to consider having them continue repaying their loans, and setting up savings accounts for each household where you can deposit at least some of the repayments. These accounts could then be gifted to your children at a future point, either as part of an inheritance or an outright gift.
If you decide to move forward with this or a similar plan, it’d be a good idea to check into the best way to do this to ensure there are either no or minimal tax ramifications for you or your children. A qualified, knowledgeable accountant, financial planner, or bank officer should be able to help advise you with that.