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Ask Dave

Honoring A Fallen Soldier With Responsibility

Steve's son left a $100,000 insurance policy for his brother. Steve hasn't told him about the policy. Could Steve invest it for him without his knowledge to prevent him from blowing it?

QUESTION: Steve in Raleigh lost his older son in Afghanistan a year ago. Steve's son left a $100,000 insurance policy for his younger brother. But the younger brother is irresponsible, so Steve hasn't told him about the policy yet. Could Steve invest it for him without him knowing yet and prevent the brother from blowing through the money?

ANSWER: It's a delicate road to walk because legally, there isn't anything you can do. The only influence you really have is he lives in your house and you're his dad. This is a blessing from his brother, the hero, and he needs to honor that memory with the way he behaves. I don't mind guilt-tripping him with that at all because that's what he needs to do. He needs to man up. Manning up means doing responsible things that honor his brother as a result of him having his name on this as a beneficiary.

To the extent that you can influence him, you can strong-arm him if you have to for his own good—not because you want the money or are going to end up with the money. You've got to help him behave with this money. I would lay out a budget for the money that you're strongly suggesting to him. The budget is we're going to give some of it, we're going to spend some of it, and we're going to invest the rest. I think it would show great maturity, class and masculinity on his part were he to give some of it to something in his brother's memory.

The problem is when we add $100,000 to the word "irresponsibility," it goes into orbit. What you've got here is a good kid with a good heart, but he's not shown skeletal structure in his character yet. We've got to help him with that as his dad. I think he needs to give some of it to something he designs, and you can walk with him on how to honor his brother's memory. It could be something that means something to both of them maybe. He needs to spend some of it and enjoy some of it. If he needs a better car or something, you might put $10,000 toward that. Then he needs to invest some of it.

Let's pretend he invests $50,000 at 21 years old. At 71 years old, if he invested the money into decent growth stock mutual funds and left it alone, this could be as much as $19 million. If he waited only until he was 61 years old, it would be about $6 million. He has the ability with this to completely change his family tree—again, honoring his brother, but also doing what's right.