Attach Strings For An Impulsive Son
Kimberley received a beneficiary IRA when her mother died. She also received a small part of the estate. She wants to share some of it with her son. What's the best way to give it to him?
QUESTION: Kimberley in Las Vegas received a beneficiary IRA when her mother died. He also received a small part of the estate in addition to the IRA. She wants to share some of it with her 24-year-old son. What’s the best way to give it to him?
ANSWER: I don’t like hearing he’s impulsive, and you’re going to hand him the money. I don’t think giving him money is going to solve his problems. I appreciate your sentiment. I think that’s a nice thing to think about doing. The question you’ve got to ask yourself is, are you helping the young man by giving him money? You could just keep it, and someday later, you could give it to him. Or you could give it to him with some stipulations and some strings attached that, as he meets those guidelines, then you will gift him some money. In other words, try to get some behaviors out of him that are going to be good for him in the future. For instance, if this were my 24-year-old son, I might tell him I inherited some money and that I’d like to do something for him, and we’re thinking of buying his wife a car. We’d do that when he and his wife completed Financial Peace University. I’d want to see that he’s doing better with money than he’s been doing. If he doesn’t want to do that, then I’d just keep the money and give it to him someday when he’s able to handle it.