I've offered to buy my parents a home, but they want the cash instead. They've always been financially irresponsible. Am I wrong for saying no?

Cora wants to purchase a $300,000 home for her parents, as she feels it could be an investment for her and provide them a safe place to live. Unfortunately, her parents don’t think the place she’s buying is big enough. They want to use the $300,000 as a down payment to buy a bigger home in their own name.

Cora doesn’t want to do this, but she’s being pressured, as her parents don’t believe there should be strings attached to the $300,000 gift they consider theirs. So, what should Cora do?

Saying no is absolutely OK

First, Cora must know that she has every right to turn down their request for the money.

“One of my old and early supervisors always used to say, ‘No is a complete sentence,’ and so it doesn’t need any big justification,” Christian Bumpous, LMFT, LPC, and founder of Therapie, told Moneywise.

Bumpous explained that, “if you want to decline, you don’t have to explain yourself and you don’t have to earn the right to say no. If you’re not comfortable doing the cash, being able to say, ‘Hey, I’m still glad to help out with the house, but I’m not going to give you cash,’ is a complete sentence, a complete answer and doesn’t need any justification.”

Bumpous referred to the situation as a “classic boundary issue,” and said, “If they end up pushing back, you can stick with the answer and you can repeat that answer rather than getting into a struggle or justification match with the parents. I think ultimately, an explanation just invites further negotiation and if it’s not up for negotiation, there shouldn’t be an explanation.”

Approaching the conversation correctly can protect your relationship

While Cora can be firm in her commitment not to give her parents the money, she can also approach the subject in a manner that helps preserve the relationship.

Erika Wasserman, a certified financial therapist, recommends Cora start off with something simple, perhaps saying, “It stresses me out worrying about you every day and where you will live. For my peace of mind, I would like to buy you a house outright.”

She also recommended that Cora use the ‘Money Mindset Method’ to structure the conversation, which means:

• Making the conversation comfortable by having it at the right time
• Asking One question at a time, like where the parents hope to live for the next 20 years
• Nurturing shared goals like getting safe housing for her parents
• Evaluating all the options available to see if there may be a better compromise home
• Saying Yes to compassion and recognizing that the conversation and situation may be difficult for her parents.

If they’re open to this type of discussion, Cora can work with her parents to identify a solution.

Structuring ownership smartly

Finally, if Cora decides to stick with the original plan of buying her parents a home, she must ensure it’s actually an investment and not vulnerable to losses due to her parents’ bad choices.

“When purchasing a home for parents who may not be financially responsible, the most important consideration is how the property is titled,” Claudia Cobreiro, an attorney and the founder of Cobreiro Law, told Moneywise.

Cobreiro explained that purchasing the house and putting it in the parents’ names would give them the greatest flexibility but she warned that “this method also gives the parents unrestricted control over the asset that someone else paid for.”