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Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!) Dear Pay Dirt, I want to give a recent inheritance to my two daughters—$100,000 each. The oldest just bought a house and needs to invest a lot of money fixing it up. This money will make a very big difference to her. The youngest lives at home, has no real expenses, and not a lot of financial acumen as far as I can tell. For my oldest daughter, is there any difference, tax or otherwise, between giving her money or paying for housing upgrades? For my youngest, besides the expense of setting up a trust, what can I do to help her keep this money for important future purchases? —Sharing the Wealth Dear Sharing the Wealth, It’s lovely of you to share this inheritance with your children when they need it. And, you recognize that your kids are at different places in their lives, but are willing to find a way to make things as equal as possible. Let’s look at how you might work with each daughter: For your oldest daughter: There’s no tax difference between handing her $100,000 or paying contractors directly—both are gifts to her. She won’t owe taxes either way, since gifts aren’t taxable income to recipients. On the other hand, you’ll need to file IRS Form 709 to report gifts over $19,000 (which is the annual exclusion amount for 2025) or $38,000, if you and a spouse are giving her a gift together. But you won’t owe gift tax unless you’ve already burned through your $13.99 million lifetime exemption under 26 U.S. Code § 2505. The practical difference? Paying contractors directly gives you control and ensures the money goes toward the house. Handing her cash respects her autonomy as an adult. Start with a conversation and talk through the options. Let her tell you how she prefers to handle contractors and the cash. For your youngest: I’d skip the trust. It’s expensive (really, overkill) to set this up for $100,000 and someone living at home. Instead, think about how this could be a teaching moment. Consider setting up a financial advisor consultation before she gets the money. Maybe even make it a condition of the gift. A one-time comprehensive financial plan costs around $1,500 to $3,000 and could save her from disastrous decisions now and down the line. If she’s working, you could set up a Roth IRA and put up to $7,000 (2025 contribution limit for those under age 50) and put the rest into a brokerage account, so she can put into practice some of the lessons the financial advisor passes along. You might also consider a staged distribution: give her $25,000 now, with the rest coming in chunks tied to milestones like a house down payment, graduate degree, or turning 30—whatever fits your family and, more importantly, her life. You could also give her some ongoing financial education alongside the money by providing a few of the best-known financial advice books. (This would be a nice addition to your older daughter’s gift, too.) The real gift, of course, isn’t the money. It’s teaching your children how to use it and invest it wisely so it helps them get where they want to go in life. —Ilyce More Money Advice From Slate I’ve been engaged to my boyfriend for six years. We thought we would get married sooner, but between moving to another state and establishing ourselves in our fields, it has taken us several years to be financially stable. Recently, I mentioned to him that I wanted to start planning the wedding and he dropped a bombshell saying that he wants to keep living together but he doesn’t really believe in the formality of a wedding and that the government shouldn’t intervene in our lives, it’s an antiquated sexist custom, it’s a needless expense, etc.
