Difficult Decisions: Estate Planning to Provide for Troubled Relatives
You know you are officially an adult when you look at your pay stub and, instead of daydreaming about using what is left after your bills to splurge on purchases for yourself, you imagine saving it for your children, even if you do not have children yet. One of the happiest moments in a parent’s life is looking at a sleeping baby and imagining what he or she will do with the money you have set aside for your child when he or she grows up. Of course, adorable babies grow up and turn into shopaholics, party animals, deadbeat dads, and serially unlucky entrepreneurs, among other financially insolvent characters. How do you, as a financially stable parent, save your troubled children from themselves without enabling their financially irresponsible or otherwise unhealthy behaviors? There is no one-size-fits-all answer to this dilemma, but an estate planning lawyer can help you decide the best course of action for your family.
Ways to Avoid Perpetuating Your Adult Children’s Poor Financial Habits
Just as there is not one universally correct answer about how best to make your estate help your children with problems that money alone can’t solve, families differ from one another, while the parents are alive, where they draw the line between helping and enabling. It is difficult enough when the problem is simply that your adult son or daughter has yet to find employment that pays enough to put a dent in his or her student debt; when your adult child’s financial problems are related to addiction or mental illness, every transaction you make for your child’s benefit feels like a soul search. At least while you are alive, you can change your approach as needed. How do you decide how your estate will best help your financially troubled child when you are no longer there to decide on a case-by-case basis which requests for money you will grant? Quentin Fottrell of The Moneyist recommends setting up a trust.
The beauty of a trust is that every trust has its own rules. You can specify that your child will only be eligible to receive money if he or she stays sober and undergoes periodic drug testing. You can decide that the money can only be used for education and employment-related expenses. You can even set up the trust so that the trustee can use their discretion as to when your son or daughter is in a position to use the money responsibility. Another option is to have the money paid out in installments, so that even if your child spends money irresponsibly, they at least can’t spend it all at once and go broke when you can no longer help them.
Let Us Help You Today
It is painful to see your adult children struggle with money problems and other issues. An estate planning lawyer can help you decide how to use your wealth in the most productive and helpful way for them. Contact a Washington DC estate planning lawyer at Tobin, O’Connor & Ewing for help.