28% of all-cash first-time buyers use inherited money

28% of first-time buyers who paid all cash used inherited money, according to the National Association of Realtors.

The association also found that a record 10% of first-time buyers paid all cash, and one in 10 first-time buyers used an inheritance for a down payment.

For advisors, an all-cash purchase that draws on a parent's money changes the parent's portfolio balance at closing. The window is before the deed is recorded. At that point, the open questions include whether the money is a gift or a loan, whose name goes on the title, who pays property taxes and upkeep, and what happens if the child sells or the parent needs the money back.

Suzanne Siracuse said a less involved female client gives an advisor an opening to propose a planning conversation, and she advised bringing the adult daughter into it. A first-home purchase gives that opening a closing date.

A parent whose plan assumes her portfolio funds her own lifetime may face an adult child buying a first home and asking whether the inheritance she intends to leave can be advanced now. The parent can gift the cash outright, lend it on written terms, or keep the assets while the child borrows elsewhere against a smaller gift. All three put the child in the house, and each puts a different risk on the parent's plan.

The next date is the closing, and the number that decides the advice is the parent's portfolio balance after the transfer. If the plan still funds her lifetime at that balance, the remaining work is documenting terms and keeping the daughter informed. If not, the conversation moves from how much the house costs to how much help the family can afford.