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Ask Dave

Irresponsible Parents, Hope For The Kids

Michael is ready to take care of his nieces and nephews with educational savings accounts, but there's a twist.

QUESTION: Michael and his wife are working their debt snowball and doing well. His sister and sister-in-law both have kids, and Michael wants to start an educational savings account for each of them. One of the couples spends everything and is facing foreclosure. How can he set it up?

ANSWER: Make you and your wife the custodians. Do that for all of it, so if anyone brings it up, just say that’s how you do things. That avoids any awkwardness in the conversation. You need to get the kids’ Social Security number. You can only put $2,000 per child per year in there, so bear that in mind in case the parents want to put any in.