Adult children with problems

More and more seniors report to me that their adult children are having a difficult time. Some children are experiencing difficulty holding jobs, experiencing financial problems, and in some instances suffering from substance abuse. Often, I find that parents are embarrassed to even discuss this with me. However, this unfortunate situation has become so common place, that I would estimate that at least one-third of my clients tell me that at least one of their adult children is having such problems. What should you as the parent do to assist your child through these difficulties?

During your lifetime, you don’t want to create too much financial dependency between you and your child, or your child can lose their incentive to stay employed. Further, you don’t want to jeopardize your own financial security. Determining how much financial assistance to give an adult child can be a difficult decision to make.

But what happens following your death? How can you protect your adult child who is having personal problems? Many of my clients are establishing trusts to hold their children’s inheritances. A trust can minimize the ability of the child to lose their entire inheritance through bad decision making or reckless behavior. Also, this type of trust is protected from the claims of creditors. If your child is faced with bankruptcy or large bills, this can be a protected fund.

How does such a trust work? Following your death, your child would be limited to a monthly allowance from your assets. This would be enough to provide the child with food and shelter, but not enough that the child could live “lavishly.” The goal would be simply that the funds would last for the lifetime of the child.

Finally, this kind of Trust can ultimately protect your grandchildren. The trust can provide college money for your grandchild and further increase the possibility of an inheritance passing to your grandchild following the death of your adult child.

Tiffany can be contacted at 501-525-4401 or by email at tiffany@farrarwilliams.com. She can answer any questions you have about this subject.