Pay Dirt is Slate’s money advice column. Have a question? Send it to Lillian, Athena, and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
So my marriage got annulled because my husband was a cheating pile of garbage who got two women pregnant while we were engaged. I found out after our honeymoon. I was very lucky I didn’t put the bastard on the deed to my house. I did return his mother’s engagement ring. My question is do I have to return his great aunt’s handmade quilt? She made it for both of us but use fabric from my late mother’s wedding dress among other personal items. And it is gorgeous.
The problem is her daughter asked me to return it for her own child’s future wedding as her mother’s health is failing and another quilt isn’t coming. Our names and the date are stitched into the quilt but it would be easy to cover it up. I feel bad but I am not the one who screwed up here. She wouldn’t be asking me this if her nephew wasn’t a pile of garbage, but it isn’t her fault and the family is really wonderful. Would it be awful to return the quilt but ask that they pay for another one to be made? I have fabric left over from the wedding dress and my emotions are all over the place. I lost much of my maternal heirlooms after a house fire.
—A Gift
Dear Gift,
I’m sorry for how your marriage ended, but it sounds like you dodged a bullet. As for giving the gift to your ex-husband’s cousin, say no. I think it’s pretty brazen of her to even ask.
In my opinion, her request is way out of line. This quilt was handmade FOR YOU, with your mother’s wedding dress! Despite your marriage not working out, it still has family heirlooms that belong to YOU and not your ex’s family, even though her mother technically made it. I’m 100 percent certain his great-aunt can pass down other heirlooms. If quilts are a big deal, the daughter can give away one of her own or try making a new one while sitting by her mom’s bedside. That way, there can still be the sentiment behind it without the great-aunt having to sew one from scratch.
Explain to your ex-cousin-in-law that while you understand her wanting a quilt to be given to her daughter, it was specifically made with material from your mother’s wedding dress, and you cannot part with it. Then cozy up on the couch with your quilt and drink some wine.
Dear Pay Dirt,
Right before the holidays, my cousin’s house burned down. She and her husband barely made it out alive, they lost their dog, lost all of their belongings, and all of this was in addition to a string of other recent traumas. I would like to give them a substantial monetary gift—I’m thinking 10 percent of my annual salary/15 percent of my net worth. My salary is quite modest, but I came into a decent amount of money recently. Here’s my problem: I’m the youngest of my family and a semi-recent college graduate. My guess is that mine would be the single largest donation. First, does this sum seem adequate? Should I give more? Second, how do I go about actually giving it? I’m pretty close to my cousin, but I don’t want there to be a fuss. I’d also rather nobody else know how much I donate. Nobody in the family is ill-intentioned, but I just don’t want to add any stress and I have no idea about the etiquette here because I am young and didn’t grow up with money.
—Baby Cousin
Dear Baby Cousin,
The list of tragedies that happened to your cousin is heartbreaking. I can’t imagine that kind of loss. My heart goes out to her and her husband. As for the gift, that is a very generous amount you are giving her with no strings attached—I’m sure she will forever be grateful for it. For any gift over $17,000, you’ll need to fill out gift tax form 709, but you would only need to pay if you surpass the lifetime gift tax exemption, which is $12.92 million in 2023.
Ask her to meet you for lunch or coffee (your treat), so you can tell her about your gift in person. Try saying something like: “I love you, and you mean so much to me. I’m sorry for all of your recent hardship, and while I can’t imagine how you are feeling, I still want to help. I know you and your husband can manage, but please accept a gift from me to help you get through. I’d like to give you (X amount).”
She’ll most likely take your token of kindness and allow you to help her. But if she seems uncomfortable with the money, offer to help her in other ways, such as providing gift cards for groceries or toiletry items, or asking her to create an Amazon wishlist as a way you can purchase new items for her next home. After you’ve decided how to help, express to her that you’d like to keep your gift a secret. It’s really no one’s business in your family what you do with your money, but you can still express that you’d like to keep it between you both because you only have this type of relationship with her. I have a hunch she’ll understand.
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Dear Pay Dirt,
In October 2019, I “took advantage” of Apple’s Mastercard because I was young, didn’t have a credit score, and wasn’t eligible for a regular credit card. I was good about paying off my bill at first. During 2020, things got bad and I maxed out the card to pay my rent and only recently (end of 2022) became financially stable. My account is “closed” and I owe about $1,200 on it. I want to start making payments but I don’t know which way would impact my credit score. Should I save up and pay it all off at once or chip away at it? And once it’s paid off should I start using the card again or should I close the account completely? It’s my only debt and I want it off my chest!
—What’s a Credit Score Anyway
Dear Credit,
I’m glad your finances are doing much better. The pandemic wasn’t kind to anyone, so I’m hoping you’re not still beating yourself up over what happened.
Call Apple and make a payment arrangement with them so that you can repair your credit sooner rather than later. If you had the cash, I’d say just pay it off, but since you said you would need to save up for it, the payment plan is the way to go. These payments will show up on your credit report, which will help prove you are trying to fix your previous mistake.
You mentioned that the account had been closed, so just be aware that a creditor does not have to reopen it once you’ve paid it off. Since you have what sounds like a limited credit history, I’d inquire if opening a new account is indeed something they are willing to do. When I had cancer in 2017, I got behind on a credit card bill, leading to an account being closed and turned over to collections. However, the same financial institution offered me another card a few years later, with a higher limit, so not all is lost.
Dear Pay Dirt,
I know this is a problem that I’m lucky to have. My daughter is heading off to college next year, and while we have some saved in a college savings account, we (obviously) don’t have enough for one year, let alone four. My mother has very generously offered to cover $25,000 each year, which we are extremely grateful for. What we can’t figure out is the best way for her to do this without any of us incurring tax penalties for “gifts,” and without jeopardizing any aid my daughter might get looking at our household income and her merit. Is it really as simple as my mom sending a check to the college directly, rather than using us as a middleman? Believe it or not, it’s surprisingly difficult to find an answer to this question! (Don’t worry, we indicated her intentions on our CSS form.)
—Grateful for Grandma
Dear Grateful for Grandma,
What a generous gift! I called Robert Farrington from The College Investor for his added expertise (Editor’s note: I have written previously for this publication.)
“Paying tuition directly to a school or college is a great way to gift without triggering the gift tax rules,” Farrington said. If you pay tuition on behalf of a student, it’s exempt from gift tax reporting. You can also pay for tuition for a student attending kindergarten through twelfth grade, which doesn’t apply to your situation but is good for our readers to keep in mind.
Farrington also suggests that planning to pay tuition in advance can also help your mother with her estate planning. It’s best she consults her estate attorney for more information as laws are different from state to state. I’m excited for your daughter and her next adventure!
—Athena
Classic Prudie
My boyfriend’s family lives about an hour from us, and he likes to make weekend visits every other month. They are kind, welcoming, generous people. Their house is … not clean. When we open the front door, we are greeted with a wave of the smell of urine. And it gets worse.