Carrie Schwab Pomerantz

In its purest form, money is a resource. A tool, if you will, that provides choices. Money also has a lot of symbolic power. To some people it becomes a metaphor for success or self-esteem, and for some families money becomes a way to exert power and control - or even a symbol of love itself.

This seems to be particularly true when it comes to passing on wealth to future generations. This point was driven home for me recently when a friend told me that her mother had decided on a drastically uneven split of her assets in her will. Her mom wanted to give the bulk of her estate to my friend and a considerably smaller share to her brother, since the mother considered him to be irresponsible. Adding to the situation, the mother also wanted my friend to take control of the assets she planned to leave to her son. Needless to say, this put my friend in a very uncomfortable spot.


I wanted to say to the mother, "How will your son feel when he discovers your plans? Your actions will say that you don't trust him, and whether you intend to or not, you'll be saying that your daughter is more deserving. Do you really want to create such a gigantic rift between your children? Do you want that rift to reverberate long after you're gone?"

Of course, the mother wasn't soliciting my advice, so I encouraged my friend to talk it out with her mother. I suggested that she let her mother know that this decision was putting her in a difficult position, with the potential to seriously damage her relationship with her brother (not to mention her brother's emotional ties to his mother). And if the mother remained adamant, I encouraged my friend to ask her mother to explain her reasoning and rationale directly to her son. In other words, she should tell mom: "Don't put me in the middle of this!"

Now let me point out that the mother might have legitimate concerns about her son's ability to handle money. But if that's the case (if her decision is based on an accurate assessment of her son's financial maturity and acumen), she does have options. She could, for example, establish a trust that would limit his access to the inheritance; the terms could specify an annual payment for life, or that the money could only be used for health care, to buy a house, or to educate his children. She could, in other words, give him the money with conditions. If she pursues this option, I'd also suggest finding an independent trustee so the daughter doesn't have to control the purse strings. This kind of financial structure is not uncommon, but it does require specialized expertise from trust and estate professionals.


Carrie Schwab Pomerantz

Carrie Schwab Pomerantz is a Motley Fool contributor.

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