WASHINGTON — When folks ask me for advice, I have a standard line: “To be clear, you asked me, right?”
I preface my answer with this line because it’s my way of warning them they may not like what I have to say.
Then there are readers who weren’t asked for their opinion but nonetheless feel compelled to offer their thoughts. OK, so from time to time I’ll let them weigh in for a feature I’m calling “Money Back Talk.”
Let me start with an inheritance question I received during a recent online discussion.
“My father, who was extremely wealthy, rewrote his will after my mother died 11 years ago,” a reader wrote. “He used a generation-skipping technique to pass most of his estate directly to his grandchildren. The problem is, he did not include grandchildren not yet born. I’m sure this was inadvertent, as he adored our youngest daughter, who is 5. What this means for my family is that our older two children will inherit over $500,000, to be doled out when they are 18 (for college), 21, 25, and 30. The younger three will receive nothing unless the older children choose to be generous, which I don’t think is in the cards. My wife and I can somewhat equal this out but have nowhere near the $1.5 million it would take to make them all equal. The lawyer who drafted the will has died and if it were to be challenged, the answer would be that maybe my father did indeed only want to include his older grandchildren. Any thoughts on how we could sort this all out?”
I told the couple to hire an attorney to review the will to make sure they haven’t missed some law or legal language in the will that would include all the grandchildren. But if a review finds the younger grandchildren can’t inherit anything, there isn’t anything to sort out.
Don’t discuss it further, I advised the reader. The more the parents make of the unfairness of the issue, the more likely it will create a rift between those left out and those included in the will.
Well, my advice did not sit well with a reader named Bea. “Such a substantial amount of money dividing the family in half has the potential to create lasting tensions and resentment,” she wrote. “Even if legally there isn’t anything a family can do, the parents should sit down and draw up something that distributes the cash evenly among all five. No good person with morals or values (Christian or not) could inherit half a million dollars in good conscience and not share it with their siblings.”
It is not immoral for a person to accept money or possessions that were left to him or her.
It would be nice for the older siblings to share the wealth. But ultimately the decision has to be up to them.
Besides, the parents can’t know at this point if the older children won’t share. Or whether it would be the right thing to do. What if the younger siblings turn out to be financially irresponsible? What if they end up being wealthy in their own right?
But a person’s will represents his or her wishes. Even if the grandfather made a mistake, the person entrusted with the administration of his estate has a fiduciary responsibility to follow what the will and law say and not coerce other heirs to give up their money.
Now on to a column I wrote recently advising seniors against co-signing on college loans.
“Just wondering what black-sheep family member burned you so badly as to make a ridiculous blanket screed against co-signing college loans,” wrote James, a tax adviser. “When you come right down to it, just like a direct loan to a family member, you should mentally write it off at the outset and be pleased if you are indeed repaid or, in the case of co-signing, that the borrower pays everything and on time.”
Well, I’ve never co-signed for anyone, so my advice isn’t clouded by a bad experience. Rather, it’s based on interviews with experienced consumer advocates and government officials on how financially dangerous co-signing can be and has been for many people.
But ultimately, I know, based on countless co-signing-gone-bad stories from readers and workshop participants, and my own one-on-one financial counseling over the years, that many people do not understand what it means to co-sign and often find themselves in financial trouble when the primary borrower makes late payments or defaults.
So, if you ask me, my advice is still not to co-sign.