Between a big house and bigger family expectations, should I say yes to my in-laws’ hefty inheritance down payment?

A Reddit user is facing a tough dilemma right now — but it is a problem most people would give anything to have.

The poster explained that his in-laws are willing to give him and his wife $1 million toward the $3.5 million home that they bought,  but they aren’t sure whether to take the money or not.

Here’s why the Redditor is so unsure about taking the funds, along with some advice on whether to accept the gift. 

The details of the million-dollar gift

The situation with the Redditor is that his in-laws do not like debt, and they’re worried about the fact that the original poster (OP) and his wife are moving from a home that was paid off into a home they have to borrow money for. So, they are willing to give them $1 million towards the house to lower their mortgage — with the caveat that the couple also contribute to paying the debt off early.

Specifically, the couple is going to be selling their paid-off $1 million home, and the OP and his wife were planning to invest that money. However, his in-laws want him to put the money down on the home instead. The OP doesn’t think they’re putting this pressure on him because they are controlling, but rather because they simply don’t want to see the couple with such a large mortgage — particularly since the OP is the only earner.

Beyond the fact he won’t be able to invest, his other concerns about taking the money include the fact that he and his wife want to feel like they “made it” on their own, plus he and his wife wish that his inlaws would spend more on themselves and he’s afraid that if he takes their million, they’ll be even less likely to do that. 

On the flip side, his wife is the only child and his parents have told her she will inherit everything anyway, so it’s just an advance on the funds and his in-laws don’t invest, so he thinks if he doesn’t take it, it will just sit in an account somewhere anyway. 

Should you take a large gift from your in-laws?

Based on the details provided, there seems to be very little reason not to take the money here. There’s no problem between the in-laws and the OP, and the money doesn’t come with any strings that the OP is very uncomfortable with. Of course, it’s true he won’t be able to invest his own million he was planning to, but since he is getting a free million if he agrees to put the money in the house, he’s essentially earning a risk-free 100% return. Plus, it may make his in-laws happy to get to see their daughter and her family enjoy the money while they are still alive. 

There are certainly times when taking a lot of money from family could be a problem and should be avoided — despite the temptation to grab the cash. This could be the case if there’s a history of conflict or if the in-laws are using the funds to force decisions the couple doesn’t want. But this doesn’t seem like one of those situations. 

The family may want to talk with a financial advisor, though, about the best way to structure the gift to minimize potential tax consequences, considering that the gift is well above the annual exclusion to the gift tax. An advisor can work with them to ensure the transaction goes smoothly and that everyone is on the same page about how the gift is made.  

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