Amazing Gift & question?

[McD]

Okay so last night I get this phone call from Zac's mom. ( Zac's mom was raised by her Aunt Jane after her mom passed away. As a result, Great-Aunt Jane views Zac's mom as one of her kids and Zac as her grandkid, etc. ) So, apparently, Great AUnt Jane came into some money lately and has decided to open Iowa 529 plans (savings for college) for her six great-grandkids. That includes Zac and I's little monster, Wesley. Aunt Jane, who we have not seen in 3 years and who has only met Wesley ONCE, is giving Wesley 10,000$ for college. Obviously, this is a HUGE blessing to us and to Wesley. We are beyond thrilled and amazed at the generosity/love of Great Aunt Jane. What a gift! We are writing her/calling her to tell her thank you tonight! (Would have last night but it was really late when Marty called and told us.)

This got Zac and I to wondering though. Do we tell Wesley about the gift? We want him to be as appreciative/grateful as we are....but we don't want him to feel 'entitled' or like he doesn't have to try as hard to get scholarships or to save his own money for school. We talked about not telling him until he was about 17 and getting ready for college, if that's what he decides to do....but that somehow seems unfair to the generosity of Aunt Jane. We want him to know what this amazing woman has given him. So we are kind of at standstill. We aren't sure what to do. What do you all think/suggest?

[Russ]

Wesley the 2 y/o is gonna say... ok, whats for snack? He is not going to understand college or how much $10,000 is. What he will remember is getting to know Aunt Jane over the next 17 years and then he will appreciate the donation when told.

[Cricket1]

Don't get me wrong--this is a marvelous gift that anybody would be happy to get. But, by the time Wesley goes to college, $10,000 will be a drop in the bucket so I don't think that you need to worry about him feeling "entitled" as there will still be so much more money he needs to come up with. I say tell him when he's old enough to be appreciative and grateful.

[imforpeace]

I would say that Aunt gave you this gift to help pay for your college. Have him color a thank you card and/or call. You don't need to say the amount, and at his age he won't even have a concept of money or college!

[McD]

I don't think I phrased this right. I don't mean what do I tell him right now, because obviously, he's two. I meant as he gets older and starts getting the concept of money, college, etc.

[Russ]

When he gets old enough to understand it, I would tell him his Aunt "started" a fund for him for college. As mentioned, $10K is a drop in the bucket.

[alarosalpn]

I agree with rcannon. I have a savings account for my son that I won't tell him about until he goes to college if he goes. IF not then he won't know about it until he gets married. Then I will turn it over to him. What a great wedding present!
Anyway, I wouldn't tell him until he is older and until he actually gets accepted into college! If you plan to have him pay for his own college then this will be a HUGE surprise!

[geckoace]

yeah i would tell him that his aunt started a college fund for him, i think you have enough years to raise him to be a gracious/ grateful person and he will be just fine

[suki]

I was in a similar situation and understand your dilemma. My ex-mother-in-law gifted my girls a similar plan. I chose not to tell them for a long time. I wanted them to work for their educations. I also knew that while this was a tremendously generous gift for which I was grateful, it would only cover tuition and books, fees, room and board would be the greater expense. My girls still needed scholarships.

I think they were about 9 or 10 when their dad told them that Gramma has paid for your college. Honestly, they quit trying as hard. They seemed to develop the attitude that college was something they were expected to do and it really didn't matter what they thought, how they did or what they wanted. So, around my oldest's 9th grade year, after seeing this attitude worsen, I started searching for colleges that would inspire them to try harder. At first I showed them the acceptance requirements, saying, if you don't have the grades it doesn't matter if it's paid for... well, they found that there's always a college somewhere that will take you. Finally, I found a school they loved... an expensive private school. But, if they got the grades, there were great scholarships. It worked. They have great scholarships and the gramma money is a tremendous help. But, I really wish my ex hadn't told them. I think it would have made a better surprise at or near graduation.

And Wes is 2? That 529 will grow well beyond $10K in the next 16 years... that's the point! It should be close to enough to cover tuition at a state school. That's a very generous gift. You and hubby should pen a thank you and leave it at that for now.

[Lady_V]

Oh do I know what you mean Suki!

My outlaws have a fat college fund for my DD. They told me that basically it's enough to send her all the way through med. school...

DD just turned 8... I've known about the fund for 6 years. I refuse to tell her about it now. I am afraid (like Suki) that she will think 'it's free, why work so hard' when she gets older. I can not stop THEM from telling her though...but they are starting to come around to my way of thinking... they have seen the damage they inflicted on their only child by letting him know he has a 'free ride' his entire life because of their wealth.

I know, a bit off-topic, but, it supports my next statement...

I don't think you should tell him until he is at the age where he is serious about college. In the meantime I would try to get some pictures of Great Aunt Jane for him to 'get to know' so he will appreciate it as a personal gift, and not just 'money some rich aunt gave me when I was 2'.

[Dancing Lotus]

When he gets old enough to understand it, I would tell him his Aunt "started" a fund for him for college. As mentioned, $10K is a drop in the bucket.

I agree, but 10,000 shouldn't be looked at like a drop in the bucket. My dh attends a state university and 10,000 is the different between him being able to go and not being able to. Use the 10,000 to invest in a prepaid program your money will go a lot farther that way.

Thats great news by the way, Both my girls have prepaid planes and taken care of by grandma and let me tell you that takes a lot of weight off my shoulders.

[heartofmine]

I agree that you should wait to tell him when he's older but also let him know he still has to work hard for the scholarships. $10,000.00 won't cover the tuition for one year at most colleges. It will be more by the time he's ready for college but college will also be more expensive to.The lady deserves a huge thank you from you and your husband on behalf of your son.

BTW I have 2 in college so I know how expensive it is. If it were not for scholarships and grants they would neither be able to go.

[Dancing Lotus]

Pardon my spelling I meant to say plan not plane....

[McD]

Thanks Suki and Lady V! That was exactly what we were kinda looking for! You validated what we were thinking. And I think that 10,000 is quite a bit. Especially since it has 16 years in the 529plan to be invested and grow tax free.

[suki]

You're welcome. The plan my daughter's have was $8,000 when their gramma bought it. It's paying out around $7,000 per year now. Which is the equivalent of in-state tuition in the state of Texas. This was an unusually good plan that was put in place before 529's existed and has since been replaced by the 529 plans... but, they are still performing quite well. Room and board is usually much more than tuition! So, save your money and earn scholarships to cover those expenses... plus books and fees.