AARP members get more! Take a look at your member benefits.

Reply
Treasured Social Butterfly
0
Kudos
1428
Views

Re: Seeking opinion on possible family disruption

1,428 Views
Message 1 of 12

@retiredtraveler wrote:

    In all my years of being on this website, I never thought I would be looking for advice on a more 'personal' family situation. But, there are some pretty smart posters on these threads.

 

Ok, here is the situation:

 

DW and I are going to start financially gifting nieces and nephews. The gifts will be pretty 'substantial', and we expect to do this gifting a couple times a year. We will distribute evenly, regardless of marital status. We are fortunate in that our nieces and nephews are all 'formally' educated, or in a trade, and have decent jobs.

 

   Except one.

 

He has a job, but he is a substance abuser.  We would like to hold what we would give him in a separate account and see if he matures. He is one of the younger nephews. We think any monies would go to 'partying' at this time. Thing is, everyone likes him, including DW and myself. He comes to family functions, is outgoing. He is not a 'strung out' person by day so he is not shunned in any way. He's functional, but just doesn't know how to handle money and I'm sure some portion of any gifts would go to 'substances'. 

 

I'm really worried that I would cause a family rift. My other siblings aren't really sure on this either. I definitely discussed this with them first.

 

Any opinions?

 

 


First, congrats on your plan and your hard work that allowed you the abiltiy to carry it out.

 

Second, You have expectations on how your other nieces and nephews will use the money I assume, but you don't really know, do you?   It is possible that one of them could have a gambling problem that is unknown to others, or a drinking problem not yet bad enough to show, etc etc.  But I assume you have not put strings on your gifting.. and if that is true,  you might consider why you are making the gift.

You might consider actually discussing the situation with this person.  Asking him if such a gift could change his life or what he might do with it to improve his situation.   You might tell him that you could not in good conscious give it to him now (if that is true) but might consider it later.  It sounds as if he may find out anyway and the discussion alone might make a difference to him.

 

jmo

 

 

 

Life's a Journey, not a Destination" Aerosmith
Report Inappropriate Content
0
Kudos
1428
Views
Treasured Social Butterfly
0
Kudos
1788
Views

Re: Seeking opinion on possible family disruption

1,788 Views
Message 2 of 12

@stonesculptor - Just a comment about setting up a trust & having an "independent person" (paid) oversee it. Unless someone is talking about 6-figure gifts or larger, no one really wants to spend that much money (or effort) on setting up a trust & administering it, strictly because the recipient isn't responsible.


Registered on Online Community since 2007!
Report Inappropriate Content
0
Kudos
1788
Views
Trusted Social Butterfly
0
Kudos
1793
Views

Re: Seeking opinion on possible family disruption

1,793 Views
Message 3 of 12

Thanks for responses. Everything is on the table. I think I may go ahead and do a first gifting, but a small amount. I can find out from my sister how my nephew is going to handle things. Perhaps she can steer him into using it for something useful. 


"...Why is everyone a victim? Take personal responsibility for your life..."
Report Inappropriate Content
0
Kudos
1793
Views
Bronze Conversationalist
0
Kudos
1818
Views

Re: Seeking opinion on possible family disruption

1,818 Views
Message 4 of 12

You could set up a trust and periodically fund it.  You could appoint an independent person as  Trustee.  The Trustee acts as a gatekeeper to the funds and you can provide very specific instructions/conditions for disbursing the funds.  This way, someone else controls the money and your beneficiary will know he has to clean up his act or potentially never see the money.  Harsh, but anything else is pretty much enabling his bad habits. 

 

A couple of caveats.  First, money is fungible.  A clever person can 'play' the Trustee.  For example, he might tell the Trustee he needs to buy a new car and will use the money for that.  And he might just do that.  But if he's still using drugs and partying, he's paying for that with the money he could have saved for the car.  If he can rely on the trust for his other needs, it could encourage him to party on with his discretionary income.  One way to help with this is to set a higher age before he's allowed to withdraw any money.  Or you can condition disbursement on successfully passing drug tests periodically.  

 

Second, you probably want to avoid having another family member as Trustee because that can cause all sorts of rifts and has even been known to trigger additional bad behavior (like justifying stealing from other family members because the person feels the arrangement is unfair--not totally uncommon with people who are already making bad choices). 

 

Good for you for doing this.  Don't forget the Estate and Gift Tax limitations on tax-free giving.  Between your and your husband, though, you should be okay.  I believe the gift tax excusion is $14,000 per year right now--each of you can give $14,000 this year to each person, tax free.

 

Good luck!

 

Report Inappropriate Content
0
Kudos
1818
Views
Treasured Social Butterfly
0
Kudos
1834
Views

Re: Seeking opinion on possible family disruption

1,834 Views
Message 5 of 12

@retiredtraveler What’s the statistic about people who come into money? They lose it all within 5 years, as I recall. So this meted dispersement plan is, I think, a way to help the next generation get ahead now while lowering the risk that they will end up broke over your generosity.

 

I know you are a goal-oriented person, so the following reminder is probably moot, however I’m saying it as much for future readers as for this present discussion: get very clear about your goal. What do you want these gifts to accomplish? Know that when you gift something you are relinquishing claim to it. So there’s that. Then there's this: it's your money. Do with it as you will. Smiley Happy

 

Now, turning to the recipient with the lifestyle issues. I lean toward the trust fund with the following stipulations: maybe give this person X number of years to clean up or the trust fund goes to X charity. Or possibly stipulate that the recipient pass drug tests before allocation. Either of these will do what you can to help this person straighten up, however they will also spend your money on some level of nannying effort toward this relative. Which brings me to this: here’s what you can do to make this person straighten up … nothing. You simply cannot control the outcome. There is no external force that can overcome whatever internal force is causing this person to use drugs. The change has to come from within. You can hold out a shiny new lifestyle, you can paint the word FREE! all over it, but you cannot make this person choose to change. Still, I’m all for encouragement. But for your own health, please be realistic. (Talking out of both sides of my mouth much? Smiley Happy If it sounds like I’m hedging, that’s because my needs from the DNA set are quite different than yours, so while I would not be bothered by upset in others over a gift giving scheme, that comes with a safety valve, you might. This comfort level is for you to discern.)

 

You are not alone, of course, in considering the ramifications. This is why people wait to disperse after death. Zero blow back. LOL.

 

 

"The key to success is to keep growing in all areas of life - mental, emotional, spiritual, as well as physical." Julius Erving
Report Inappropriate Content
0
Kudos
1834
Views
Treasured Social Butterfly
0
Kudos
1847
Views

Re: Seeking opinion on possible family disruption

1,847 Views
Message 6 of 12

That's a tough one.  I've got a mentally ill (bipolar) brother, who is now engaging in destructive use of alcohol, and I have changed my financial situation so that no money goes to him (goes to his kids instead).

 

You don't have to answer here, but I just wonder what his substance abuse and/or failure to manage money looks like.  Is it possible he has ADHD, even if it's not officially diagnosed?   (If this is the case, and if he can get some formal help, his whole life might do a 180). 

 

For me, I would not give money to someone who is mentally ill and/or have a substance abuse problem severe enough that it's highly likely the money would be used to further self-destructive behaviors and/or abuse of others.   If the situation is more in a gray zone, where he's got an occasional, intermittent history of misusing money or occasional drug/alcohol abuse, I might just give him the money any way, to keep the family peace.   

 

You are a very kind person to look out for your relatives like this.  I'm sorry part of this is not an easy decision.

 

Report Inappropriate Content
0
Kudos
1847
Views
Trusted Social Butterfly
0
Kudos
1856
Views

Re: Seeking opinion on possible family disruption

1,856 Views
Message 7 of 12

@ASTRAEA wrote:

".... Do you have any opportunities to get together with this one nephew alone, and kind of get a better sense on his abilities/status now?...".

Yes. I see him on occasion. He lives in the Chicago area. I don't know if a direct confrontation with him would be the 'possible family disruption' that I envision. His mom, my sister, would be ok with it. I just don't know how he would react........


"...Why is everyone a victim? Take personal responsibility for your life..."
Report Inappropriate Content
0
Kudos
1856
Views
Trusted Social Butterfly
0
Kudos
1862
Views

Re: Seeking opinion on possible family disruption

1,862 Views
Message 8 of 12

@GailL1 wrote:

"....What is your motive for doing it now (for all of them) rather than later?....".

 

I'm assuming that by 'later', you mean after we're gone, or much older(?).  We have a 'happy problem'. Far more money than we'll ever use. We're going to donate all of our SS. The long and short of it is that due to good luck, savings, and serious investing starting in my 20's, we amassed  a great deal. 

   I would prefer to give money now because the nieces and nephews are generally, relatively young, and could use it. Many have just started families or want to. They're all doing ok, but none of them wealthy in any sense.    

 

 

 

 

 

 


 


"...Why is everyone a victim? Take personal responsibility for your life..."
Report Inappropriate Content
0
Kudos
1862
Views
Treasured Social Butterfly
0
Kudos
1866
Views

Re: Seeking opinion on possible family disruption

1,866 Views
Message 9 of 12

@retiredtraveler - Do you have any opportunities to get together with this one nephew alone, and kind of get a better sense on his abilities/status now? If you're definite about gifting all of the others, maybe you could share your concern with him, and see how he reacts .. when he's 100% clean & sober. Is he realistic enough to suggest or agree to a slightly different "program" for him, because of his current issues?


Registered on Online Community since 2007!
Report Inappropriate Content
0
Kudos
1866
Views
Valued Social Butterfly
0
Kudos
1880
Views

Re: Seeking opinion on possible family disruption

1,880 Views
Message 10 of 12

What is your motive for doing it now (for all of them) rather than later?

 

 

 

 

 

 

* * * * It's Always Something . . . Roseanne Roseannadanna
Report Inappropriate Content
0
Kudos
1880
Views
cancel
Showing results for 
Search instead for 
Did you mean: 
Users
Announcements

Roundtable Discussion:
Ask questions and get advice from fellow entrepreneurs
Now through Nov. 22

Top Authors