Help! I Don’t Trust My Son With My Money

Q. I don’t trust my older son with money. My younger one is fine. Is it unfair to put restrictions on the inheritance the older one gets eventually? I’m 70.
— Trying to plan

A. You’re not alone.

Many parents face the same dilemma, and not all people are good with money.

“Some children, regardless of age, need help managing their finances,” said Mary Scrupski, the director of estate planning with Prestige Wealth Management Group in Flemington and Millburn. “Also, sometimes children who are generally good with money make mistakes if they inherit a large sum of money all at once.”

If your gut is telling you that your older son needs restrictions, then it might be a good idea to investigate your options, Scrupski said.

Whether it is “unfair” really depends on your point of view.

“If you do it to protect him from himself, then there is nothing `unfair’ about it,” she said. “You might be actually helping him rather than treating him unfairly.”

Scrupski said if you are concerned about a child’s ability to handle an inheritance, you can always leave their inheritance in trust for their benefit.

If you decide to do this, you will need to name someone as trustee.

“You might not want to name your younger son as trustee for his older brother even if he is better at financial affairs,” Scrupski said. “This might cause family friction even under the best circumstances.”

Instead, you could name a trusted family friend or advisor as trustee. Also, there are financial institutions that provide trust services, she said.

Scrupski said the terms of the trust can be tailored to your older son’s needs.

“For example, you could write a trust that gives your son a fixed percentage of the assets each year,” she said. “That way, there would not be much discretion on the part of the trustee whether or not to make a distribution.”

Alternatively, Scrupski said, you could leave it up to the trustee to decide the amount and timing of distributions.

“Trusts are very flexible vehicles and can provide protection for beneficiaries who are unable to manage finances,” she said.

Image: kristian sekulic

You Might Also Like

A father and son smile at each other
Becoming an authorized user is a common tip for individuals tryin... Read More

September 13, 2021


A woman shakes the hand of the man who interviewed her.
Long-term unemployment can really hurt—and not just financially... Read More

August 4, 2021


A stock market graph, similar to the trajectory of GameStop stock, is displayed on a tablet. A blank piece of paper and a pen are next to the tablet, and all sit on a wooden tabletop.
GameStop, a dying video game retailer, has blown past epic propor... Read More

January 28, 2021