Can a parent spend the kids' inheritance?
by Jeanne Fleming, Ph.D. and Leonard Schwarz
Question: Two years ago my father left a large inheritance to my brother's young girls – that is, to his grandchildren. Recently my brother used all of it, plus some of his own money, to buy a vacation home for his family (he says there are good deals out there these days). Was this ethical, or did Michael cheat his kids?
Answer: Not only did Michael cheat his kids, but he betrayed his father. Whatever his rationalization may be – that the whole family benefits from the vacation home, that the kids wanted to do it, that he'll reimburse them someday – his what's-yours-is-mine attitude toward his daughters' inheritance is unethical. If your brother desperately needed to pay the heating bill, that might be one thing. But raiding the girls' nest eggs to buy a vacation place? In our book, that's stealing.
We hope you'll contact a lawyer in your area for some advice. Even if you can't take Michael to court – or can't bring yourself to – we hope you'll try to shame him into putting his daughters' names on the title to the house.
Finally, we have a suggestion: If you have designated your brother as the executor of your will, say, or as your children's guardian in the event of your death, it's time to get out an eraser.
Questions? Email Money Magazine’s ethicists – authors of “Isn’t It Their Turn to Pick Up the Check?” (Free Press) – at FlemingandSchwarz@right-thing.net.
If you mean "secretly," with YOU being the one from whom secrets were kept (and your mother was fully aware of what she was doing) your brother and she had every right to enter into a relationship – and keep that fact secret from you, the "administrator," (by which I assume you mean "executrix,") of your father's will.
Once the property is your mother's, its hers, and you are out of it.
If, however, Brother scammed Mother, you are likely liable as an accomplice. Get a lawyer.
My dad is deceased. He had a will, and I was the administrator of the will. Now my mom is deceased, and my brother secretly bought all the land from my mother. Is that legal?
I have not noticed any of you suggesting that the vacation home could be used for income producing purposes. Often people will rent the vacation home on the weeks it is not being used by the owners to pay for the home's mortgage. If the vacation home is located in a tourist destination, not only would it appreciate, it'd be an income producing item. There is not enough information in the post to make a judgment call. The sibling does not state if the brother has any plans to title the home in his daughter's names or to sell it at an appreciated value before the daughters come of age. If he planned to keep it in his name only and never give them a cent, then yes, that'd be unethical.
"Wally," if that really IS your name – makes some rational sense. "Asya," sets up the proverbial straw man (usually reserved for Chicago Bob) – this is NOT Christmas money, but rather dollars to be invested in an asset that will eventually become the girls' own (either as cash, an education, or the home itself).
Bart, whoever you are, I wish you would write more and often – you make good solid sense everywhere I have seen you.
Growing up, my dad would take my Christmas and birthday money and spend it on things for HIM claiming it was for all of us (a motorcycle, sailboat, a fence). A child's money is not the family money! Definitely talk to your brother. His daughters could have put that money towards college expenses!
I agree with some comments here – those who believe the father is looking after his daughter's interests well.
Given the banksters and other grabbing every dime, getting some use out of the old man's dollars before they are taxed into oblivion makes sense.
About college – someone – an idiot – on here actually said the father couldn't even spend "the daughter's" money on college for the kids!
Give me a break!
I think Grandpa would be happy with this, and whoever wrote the letter in is just whining.
Interesting comments – particulary you, San Antonio, for bringing some rational analysis to the scene.
Wonder why many liberals here don't get it? Dad has to invest SOMEWHERE, and frankly a beach house beats the markets on many, many fronts.
Better this than the Obamanators stealing every dime, which is what is happening to you and me as we speak!
How much do you want to bet that all the people who think the dad did the right thing are Baby Boomers?
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Joannah
Oh, my! J. Blow, what a big mouth you have!
The issue here of course is what the girls will receive once they come of age and are thus legally entitled to dispose of these funds as they see fit.
In the meantime, Dad has not only the right, but the OBLIGATION, to deploy these funds to the best advantage of girls in question – and a vacation home for now followed by a sale (and cash) later is at least not unwise, and at most does not entrust these dollars to those incompetent to manage them (i.e. Fidelity, Oppehheimer, a hedge fund, Congress, J. Blow, or anyone else wrong-headed).
Unless the initial letter was edited, I saw no statement re who owns the vacation home in question; who can use it; or what Dad's big plan for its disposal might be.
Given that Dad had access to the funds at issue, it would appear that Grandpa allowed such access via the terms of the will, so any legal issues are settled out-of-hand.
Suppose our letter writer had indicated Dad had invested with Madoff and "all the funds were exhausted," or that Dad had given the money to the girls – young girls – to use as they saw fit, and they bought an expensive pony. Doubtless all you here would second guess either one and apply the "moron!" label to dear old Dad.
No one has been cheated here, and at worst, Dad will have made a poor investment. He could hardly do worse over the next 10 years than my own 401K – invested with Fidelity – has done over the last 18 months.
Low "Blow," on the drugs comment, by the way, J.!
He betrayed his father's wishes and did not use [the bequest] accordingly. It is up to the grandchildren to decide (when they are of legal age)what's in their best interests on uses of the money.
Was this ethical? I don't have the answer but with confidence I could say that in today's economy, if your brother leaves the money in the bank, the children could be robbed of the inheritance.
Let's face it, pay attention to what is happening to our currency.
I think the columnists are jumping to conclusions and making assumptions without knowing enough details.
While it could be a risky investment and a waste of money, it is quite possible that a vacation home could be a worthwhile investment if it's the right deal / location. It could also provide the entire family with enjoyment and relaxation that the parent could be saving for otherwise.
If the children are young, as the writer suggests, the house could appreciate in value in the long term, and be sold for college costs, down payment on a house for the children, etc.
As long as the parent is responsible with finances in general, there is no way to assume this is a bad thing to do with your child's money. In the end, the pot of money is family money, and as long as you are a responsible parent, and plan on supporting your child when they need help, I don't see an issue.
I just went through the estate planning process. Grandpa could have left the funds in a trust with a trustee, not his son, to insure the money would be used as he saw fit. For reasons that are his own he did not.
He clearly left his son in charge of the inheritance until the children come of age. The only thing to do at this point is put the children on the title to the house.
If there is some legal remedy. the other siblings should use it, but otherwise it is a lost cause. That is why this is called estate planning.
By the way, Bart, having gone through the estate planning process, it was not Grandpa's intent that his son blow the inheritance for his grandkids on a vacation home.
There appear to be a large number of legal eagles out there all too willing to split hairs and justify the actions – probably are also jealous that they aren't the owners of the vacation home.
For those who might still have a gram of decency, the intent of the will was for the girls to use the money and not necessarily on college. The reason dear old grandpa left the money to the grand-daughters is he knew his son would blow it before the girls saw any of it.
The "crying shame" is that Grandpa should have entrusted it to Madoff vs. his own son – probably would have lost less in the end.
Yes, as others have duly noted; this is exactly "why the US is going to Hell in a hand-basket."
So posters Bart and Matt, what did you spend your children's inheritance on – drug deals perhaps? I have to wonder because you cannot seem to grasp the concept of being a good steward of your children's inheritance? Probably not, because you are too invested in taking a position to consider the plain truth before you. Or let me put to you in a simple question.. Do you really believe the grandfather or the children would want the money to be spent on a vacation home? If you can honestly answer yes – than you must be on drugs…
Once AGAIN Fleming & Schwarz get it wrong, wronog, WRONG!
The money is legally and properly the father's to dispose of as he sees fit, provided the two girls both benefit and retain that lasting benefit (in this case, own the vacation home – which goes unstated in both the question and answer).
In point of fact, why on EARTH is the father LESS justified in buying a vacation home his daughters will own and use than "stealing," to pay the light bill? Thievery is thievery, and this man has not committed this or any other crime.
Also, one has to wonder…would it be stealing for Dad to speculate in the stock market? Buy bonds? Keep the dollars in a money market fund, where Obamination's will destroy its value via inflation?
How about this … is Dad justified in "using," these funds for college expenses for the girls, WITHOUT their consent? Or must he keep these monies sacrosanct and inpoverish himself to pay the tuition bills?
By the way, should a parent be OBLIGATED by society to pay for college?
Come off it, you two generally stick to the most liberal, whackbrained analyses I have seen yet – psyche majors, perhaps?
Can a parent spend the kids’ inheritance?
It all depends upon the stipulations of the will. Whether it was ethical or not really doesn't matter.
If the will was lax enough to allow this, then sister can just voice her opinion to her brother (rather than the rest of us) and let it go.
If this is a violation of the will, then yes, there are steps one can take to contest it.
And a house is a liability, not an asset, not an investment.
Some of you people are incredible! This is theft, unethical and a morally corrupt decision by the father. Investing in a piece of income producing property could be a good long term investment, but that isn't what he did. This guy went and bought a VACATION home…for his own reasons. There is NO guarantee that this property will be worth what the guy paid for it. A house is only worth what you can sell it for. AT at 18 when his kids head to college and need tuition and he can't sell the house, what then? And to the folks that say the kids owe the father for braces, school, food, etc…you should be ashamed. The kids didn't have a choice when brought into this world, the parents made that decision and the parents owe them, legally and morally, the support inherent in raising a child. By your rationalization, you should have a kid and let the infant swipe their credit card to pickup the delivery tab on the way out of the hospital. There is a place for tough love, which my parents practiced. I have sacrificed 8 years of my life to get through school, 4 years earning the GI Bill to help pay for school and 4 more working and going to school full time. I appreciate the work ethic they have instilled in me and ultimately am thankful. This guy is not making this decision to have such an effect. Granted there are some facts missing from the case, but you can derive some of them from context clues. The writer wrote "young kids" thus the assumption they are "grown and doing well" is absurd, not to mention the grandfather would have probably given the money directly to the grandchildren had they been of legal age. Additionally, if you think "young kids" are capable of making a "joint decision" then I pray that you are NOT a parent. And if you are, I am sure I will be able to spot your kids because you let them choose to eat candy and ice cream for dinner every night and not brush their teeth. Kids, and young kids at that, are not capable of making monetary decisions like how to invest some inheritance. This money should have been put into a college savings plan and, if by chance, the father already had one in place, then he should have invested in the market, bought bonds, or bought a real investment property…one that produces income nearly all year round. I'm astonished at how morally bankrupt some of the readers/responders are. I'm ashamed, but it certainly explains why our country is swiftly heading down the proverbial crapper. Good day.
I've come to believe that this ethics column is probably contrived, and the author's conclusions seem hastily presented and poorly thought out.
If this isn't contrived, perhaps the authors should consider placing at least a little blame on good 'ol grandad. What kind of idiot leaves a substantial amount of money to a minor without designating a trustee or similar agent to ensure that the child's money isn't used improperly?
Once the blame game is done, then it seems the ethicist should at least address the potential issues in some depth. The author states that the Michael has betrayed his father– would the opinion be different if we knew that grandpa made this money investing in real estate, or that it was the proceeds of the sale of a vacation home?
The scenario doesn't specify that the grandchildren are minors, but we are lead to believe this. If they aren't minors, then they can reasonably consent to take part in a real estate transaction with their dad.
If they are minors with a significant inheritance and authority over the money has not been established by the terms of the inheritance, then there COULD be misconduct on the part of the father, but not necessarily. If the father had invested in bonds instead would that have been OK? If so, why is that OK? What about stocks? If he lost 40% in the stock market is that somehow more ethical than losing the same amount on a real estate transaction? If the childrens' guardians are supposed to oversee the investment of this money for the child's gain, it isn't necessarily unethical to invest in something that has some degree of risk.
It certainly would seem less ethical to ask a young child to decide for herself how to invest the money.
The suggestion that the sister involve an attorney is laughable. Since the authors have already convicted the father of stealing, why not just handcuff him and lock him in the basement for 7 years?
Beyond the simplistic model of "transfer money to dad's account; buy house; screw kids out of inheritence" presented here, there are contractual and legal ways to make such a transaction while recognizing and protecting the ownership/investment interests of the children. Before you sue your brother on behalf of his children (good luck on the family relations after that one), perhaps it would be reasonable to talk to your brother about your concerns. If he hasn't appropriately recognized the childrens' interests in the house, you could suggest that he do this. One way to do this without sounding like a backstabbing jerk of a sister is to politely suggest that he should legally recognize the childrens' interest in the investment so that they are adequately protected in the case of the father's death, and so that any future taxes that might result from the sale of the property can be properly evaluated.
This is stealing, pure and simple. It exemplifies everything that is wrong with society today. Next week, he'll probably take money out of their piggy banks to help pay for utilities. What a guy!
This is a simple case of justification, greed and theft. It has nothing to do with the vacation home appreciating or depreciating. The father is the steward of his children's inheritance and he selfishly spent/invested(?) on something he wanted for himself.
Dad did the right thing.
You only live once. What is the point of keeping money in some investment account, hoping it grows into some huge sum? Haven't people learned from this financial crisis that delayed gratification is a waste of time? There are so many people who invested large sums of money over many years, only to watch a great deal of that money evaporate into thin air.
I would rather have the vacation house than use that money to pay for college. Whose to even say that his daughters want to go to college? What if they go to college and flunk out after the first semester? What if they go for four years and only end up earning 50 credit hours?
People work so hard planning for tomorrow that they forget to enjoy the present. It is pretty ridiculous how most people work on a daily basis and live paycheck-to-paycheck. Even people with salaries of $100,000 or more are in so much debt that they will NEVER be able to pay it off. People work hard and still don't enjoy themselves. That makes absolutely no sense.
But hey, hard work is its own reward, right? I mean, why enjoy yourself when you can work your whole life and make others rich from your "morals" and "integrity"? Doesn't it make more sense to have a pile of money to spend when you are too old and tired to enjoy it? Isn't it better to save, save, save, and let your kids and grandkids squander your hard-earned money on nonsense?
Live now. Tomorrow is not promised.
Sounds like a disgruntled sibling to me who is venting out at a brother and may not know all the details of what the grandfather wanted for his grandchildren. There are too many "what ifs" here to give a real conclusion to any of this. Were there any stipulations or guidelines on when or how the money was to be kept until the kids got it? Did the grandfather tell the father what he wanted done with the money? Just so many questions. As far as the authors of this article saying "contact a lawyer". They sound just like arrogant people who think you should sue over everything. Why don't you get all the facts before making judgement. I hope this father and family enjoy the vacation spot.
Also, some people go to their vacation homes every weekend.
First question: is he the custodian of funds with an obligation to invest these funds?
Second question: if he is the custodian, he has to consider all asset classes whether it be stocks, bonds, cash, commodities, or real estate and the amount of time with which the investment can be made. I'm not sure why some of you are so high on stocks and bonds given their recent performance (I guess past performance is no guarantee of future results though). I don't see the particular problem with an investment in any of the asset classes above – there are billionaire investors in each asset class with which to emulate.
Third question: If he isn't the custodian but purely the guardian – this investment is criminal and he should be sued in accordance with the law – period – forget the investment class he put it in.
Fourth question: – does everyone see the importance of a will with conditions when you bequeath wealth to minors!!!
Using money in a trust to buy real estate that benefits the beneficiary can be a very smart move. The beneficiary gets a current tax free benefit from the trust and, in theory, the real estate can appreciate to the ultimate benefit of the beneficiaries over time. Compare with the stock market, where capital gains and income may well be taxable.
While we can question the validity of buying a vacation home with this money as an investment — and state law where the father resides might place restrictions on what type of investments he can make — the biggest issue is whether or not the home is being held in trust for the kids, formally or informally. If so, then it is OK. If not, then I see a bigger problem.
However, even if the house is held in trust for the kids, and benefits them in that they can take vacations there, there is a conflict of interest in that the father bought something that benefits HIM as well. Unless he is also a beneficiary of the money, this would probably provide a basis for challenging his decision if the daughters are so inclined.
The money was left to the brother's "young girls." This description almost certainly means, less than 18 years of age. The only way the brother could have gotten hold of the money was through a uniform gift to minors act law, or the like, in the state in which they reside. These state laws prohibit the investment of assets for minors in [anything other than] conservative investments and the vacation home (or generally any real estate investment for that matter) would not qualify. The brother is a scumbag as well as the majority of readers commenting on this story. It is illegal and unethical to invest a minor's money in a manner that benefits the guardian/trustee.
This is the problem with society today. We are quick to judge people based on inadequate information. For instance, what if the girls were out of school, married, and doing very well? What if dad and the girls had lots of money and they made a joint decision to do this. The question doesn't state any of this. How about dad got a great deal on the house and thought by the time his 3 and 5 year old daughters are ready for college it would be fully paid for by appreciating value. Dad figures, wealth in the US is accumulated by innovation or real estate. Smart dad!!
Boy, we are in a READY, SHOOT, AIM society!!
Sounds like jealousy from the brother. Dad gets to enjoy a vacation house, thanks to POP, while the brother is stuck in a trailer park while on unemployment dealing with his estranged wife and drug habit!
See what I mean?
I keep seeing people write about how a vacation home is a great investment in the kids future…if that were the case it would not be a vacation home, it would be an investment property and would be used as such. To be an investment property the family would need to rent it out and not use it for more than 2 weeks a year. The rationalization by people that kids are expensive so the father can do whatever he wants with the money is incredible to me. All you people should go have your kids under 16 go work and take all their pay.
You should definately give the guy a break. I see nothing wrong in investing in "his" children's future. So the grandfather left the money to the grandkids. We don't know any of the circumstances of "why".
Personnally, my father never gave me a dime (not for clothing, gas, car, insurance or even college). When I was 17 and going to college, he said have a nice life I never wanted a kid anyway. He was/is sitting on millions of dollars. I paid my way through college(student loans of course), bought myself a car, first condo, etc.
Now, he has grandchildren and gives them anything and everything (still giving me nothing, as I pay for private school and their essentials). My husband & I disagree with this entitlement they get from him. I think everyone should make their own way for a while to learn how to spend money and take care of themselves.
That being said, if by chance, he should leave everything to my children, I will not let them know about it until they are at least 30. I think people that have parents pave their way are somewhat ungrateful and have no idea the value of money. I also would look at ways to invest the money and if real estate seemed appropriate, I also would spend a portion of the money on it. Not only in the long term would it be great investment but a fun place for my family to vacation.
I do not think he blew the money. If he gambled it away, bought an expensive car, or something that was just for him then he should be held accountable. Otherwise, as his sister, go on vacation with them and get over it.
Don't be too quick to assign an investment motive to buying the vacation house. What do you think this guy is going to tell his brother when questioned about his new toy? Something along the lines of, I did it for the children. If he was saving for their college education, 9 times out of 10 he's going to do so with some vehicle meant for that purpose. Hint, a vacation home isn't one of them. No, based on what information we have, this is not altruistic, it is opportunistic. Don't be naive, we're talking about families and money, inheritances are notorious for bringing out the worst in people because it is unearned money.
Investing in a vacation home? What a great idea, hopefully they also leveraged it up to 80-90%. This whole family will be broke in two years, but at least they will have some fun in the meantime. Kind of the way this whole society operates – live for today and hopefully the government will bail us out tomorrow when we wasted everything on materialist things. No one does the right thing anymore…it's too tough and why bother when we are all spoiled and selfish.
That is an investment decision that someone has to make. To say this is wrong is to say it is wrong to invest the cash in a vacation home. There is no story here.
What a scum bag. Has he ever heard of COMPOUNDING? That money would have snowballed into a nice bit of retirement or whatever money…I dont know how he can live with himself. THAT'S STEALING PLAIN AND SIMPLE.
Well said, Anonymous.
By the way, just wait until 65% of the cars on the road are being driven by people who can't see or even think straight. Scary.
For the love of God, let's have driver's licenses expire at age 70, and from that point on, they are renewable for 1 year at a time with a driving test required first and a doctor's approval.
I think it's a great idea! When they grow up that house may have appreciated, maybe not- but in the meanwhile they can enjoy the money (house) NOW vs the uncertain future.
Clearly the folks defending the dad would have done the same thing – or have done the same thing. The only way this would have been ok was if the family was about to go on the streets. Instead they bought a VACATION HOME. A second home! Get real! This is theft.
And this is why you set up a trust with specific rules and a third party neutral executor bound by law to follow the rules of the trust. When it comes to money, trust everyone as far as you can throw them.
Maybe the father was looking to invest the money. If the father buys the house now, the family can use and enjoy it for a decade, and then sell it when the girls need the money for college and give them the profit. He may end up being a genius. He does have a point that you can get some deals today that weren't there a few years ago, and could be potential windfalls 10-15 years from now.
But if he has no intention of doing that, he truly is a thief.
This is a perfect example of why an estate attorney should be consulted to correctly set things up to actually acomplish what you want to happen with your money after you die. Dad is a thief, plain and simple.
JRA, your comments seem a bit idealistic and misguided. While I agree that frivolous litigation is a problem, what is your solution to this issue?
The brother stole from his own flesh and blood. The grandfather obviously gave a moral education to his children, but it was lost on one of them. Society needs laws to protect the innocent, in this case children, and those who uphold the law, to include lawyers. This is not about a lawsuit….It is about protecting children. Your moral soapbox does not resolve the problem at hand. Who would you turn to if someone raided your child's 529 Plan?
Some of these arguments are ridiculous. Would it be better for the father to write off his daughters and force them to pay for everything he currently pays (insurance, food, clothes, etc) and probably will pay (some college, cars)? I think those people who think he is stealing from his family should reconsider what it means to be part of one.
You know, how can you say buying a vacation home with their inheritance is right. I am, I mean, come on, the kids don't understand it. The best thing to do is, first, open a college fund with some of the money. Secondly, invest a large portion because a house DOES NOT beat inflation by much. And so that his kids can enjoy it, you can give them extra money per month as an allowance for now that they can enjoy. Buying the house to me sounded more like he was getting something for him than the family. Since he put money into it, I have serious doubts that he would have put the kids names on the house … leaving them with nothing until MAYBE they get it from their father. That money is to make the grandkids lives better in the long run, not his.
As a child, you cannot own property in your own name, including a car. My mother died when I was 13 (long illness), and I had some money for college. My family was very good about managing the money. In this country, there are fiduciary duty statutes that define how you should act when managing money for someone else. In this case, the father is probably not a professional money manager and probably doesn't know about this. He should get some assistance.
I have seen this with other people in college. My question is whether or not the daughters even know they have the money. It is important to remember that most states consider the inheritance the property of the daughters and any taking by the father is theft.
Why is everyone's advice to seek a lawyer? That is just the reason why we are in such a shambles as a society. Sue happy. That advice makes me sick. People have no morals anymore. Some people never will. Instill your beliefs into your children and society will be a better place overall.
It's a shame the grandfather failed to realize the depths to which his weasel of a son would stoop. Theft is theft & what he did is theft period. There needs to be an attorney involved promptly to begin the work of retrieving & restoring as much as possible of the girls inheritance.
If you want to give to your grandkids, consult a lawyer, CPA, or other qualified professional, otherwise mom and dad will squander.
What about this: In my Dad's dying days, my older brother bought Dad's house for 80,000 and then turned around and sold it for 500,000. Me and my siblings have not spoken to our older brother for 25 years and never will.
Isn't this exactly what our government is doing with the stimulus? Passing the bill onto our chidren in deficits.
"My grandparents left money to each of the grandkids for college. My parents raided the money and now my two brothers and I are stuck paying our own way through public college (why, hello, $20,000 of student loans). It is very frustrating."
TO be devil's advocate. How much did your parents spend raising YOU? The food, braces, spending money, clothes, sports,trips,shelter,car, gas, insurance, ipods,etc etc? When will YOU pay all that back?
Theft from ones children is the new "in thing" with the Boomer-Entitlement generation.
Don't bother explaining right and wrong to this cohort, they can only see things in "right for me" and "wrong for me".
They are, in general, incapable of thought beyond their own hedonistic needs and wants.
Normal young people (the few that survived the abuse at the hands of this cursed generation) are best served by avoiding personal or business interactions with people over 50 years old.
They are simply too risky to trust. They will turn on their friends and families for a piddling amount of money or a shiny object.
I see these people everyday and have observed their corrosive effects. They are a cancer that the world will benefit from their fading into history.
The most destructive and selfish generation on earth.
The great irony is that, in the end, so many of them will die destitute and alone, just like they left their grandkids in life.
If the father bought the vacation home as an investment in his daughters' names, he should be renting it out and saving his daughters' rental income for them. He shouldn't be using the home for family vacations, unless he is paying his daughters the full market rent.
I love how some people here are rationalizing this guy's theft by saying that the girls will get it back when he dies. As far as I know, NO state has laws that will guarantee a child's inheritance. This guy can will his property to anyone he wants (there is a spousal right to elect) and the kids get screwed. And if we're talking about property, that will either go to the wife, whomever is on the title, or it will have to go through probate and pay taxes twice. That's why they call it stealing. Too bad if it was a "pain" to handle his kid's money properly…he should have thought about that BEFORE he had kids. This happens at the time with inheritances, UTMA/UGMAs, etc. What a creep!!!
My grandparents left money to each of the grandkids for college. My parents raided the money and now my two brothers and I are stuck paying our own way through public college (why, hello, $20,000 of student loans). It is very frustrating.
In the long run this guy's kids would be much happier graduating from college debt free (or with much lower debt) then having a second home they can visit a few times a year as kids.
How absurd JKJ is. This isn't about opinon, it is about legal rights. It is unethical. This is the reason for the crash in markets today. Every student going to college has massive college debt and can't afford a home. Everyone is sacrificing helping their children in favor of greedy retirement. Baby boomers are the epitomy of greed today.
Give the guy a break. Handling someone's else money is a big pain in the arse and a lot of responsibility. Real estate sounds like good portfolio diversification anyway. He didn't blow the money. If anything, he is keeping his daughters motivated to succeed and make their own money. If he were smart, he wouldn't even tell the girls about the inheritance. Let them learn about after he's dead, and they'll get everything. Hopefully at that point in their lives, they will have gotten an education and know how to handle money.
Wow. Judging from the comments that exonerate the father from any blame, we have really sunk to a reviling low in our society. Sad to think that there are so many greedy and self-centered people living amongst us that they would actually advocate stealing a grandaughter's inheritance.
…because investing in real estate and watching it appreciate was such a good idea during the last several years right? It was unethical for him to use that money for a vacation home – that money was left exlcusively to his daughters and not for the benefit of the family. He could have put it away for college or grad school – and he could have recognized an indirect benefit by not having to supply that money himself. It's true this situation won't be corrected unless he puts the title in his daughters' names.
If the house was in his kid's names, then what he did was to invest the money for his children. Don't be so quick to hang the guy without knowing all the facts. It said "He added some of his own money," so to me, if the house is in his kid's names, they have an appreciable asset (over the long haul) AND he added his own personal money to make it sweeter for the kids.
Call an attorney? Get real!!!! Sounds like the grandfather put it in his son's care for his grandchildren. What does this have to do with the uncle/brother? He is just mad he didn't get any money from good ole dad!
It is wrong for the father to spend the children's inheritance. This is probably the exact reason the Grandfather didn't leave the money to his son.
Josh, you said "Wow!!! What a slap in the face! Depending on how large the inheritance was, it could have paid for their educations. If I were their grandfather, I’d be rewriting my will entirely." The fact that the Grandchildren had the inheritance points out that the Grandfather is DEAD and thus unable to make the change.
Maybe this will be a good life lesson for the kids…"There is no FREE lunch." They may have to actually work their way through college like the other 99% of us. And, they just might appreciate thier edcuation a little more. They'll be just fine…with a vacation home to boot.
Unless this vacation home is deeded to the daughters alone (the father's name should not be on the deed), then he has stolen their property.
With proper planning, this could have been avoided. There are probably trusts which can be utilized to prevent parents / custodians from taking his kids inheritance for personal gain.
This article illustrates how we as human beings can rationalize stealing from our family and can be untrustworthy.
If the man who died had any idea that this would even be a remote possibility, I don't think he would have allowed the girls father to be the custodian.
The guy who spent his daughters inheritance probably thought the money should have gone to him, not his daughters, so he feels he is the rightful owner.
Clearly that was not the intention of the deceased person, because the money was left for the kids, not their father.
The father who bought the vacation home should be required to sell the house and return the proceeds to his daughters and give up custodianship of those assets to 3rd party until the girls reach age 18.
Buying a vacation home maybe the best thing to do, if the price was right and he can make money on the deal. The girls will enjoy it more than a piece
of paper. If he did the right thing or not won't be known until the girls are older. Hopefully they benifit from the investment.
Maybe the vacation home is bought in a trust in the granddaughter's name. So long as it's not solely in his name Im ok with it as an investment. Also assuming the kid isnt heading to college this fall and in need of the money.
How do you know he didn't put the daughters on the title? Or how do you know he doesn't have a large college fund for each of his daughters? If my daughters got an inheritance I would use it to invest in an asset (right now is the best time to invest) or I would use their college funds to invest.
If he had used the money to gamble or take a long trip with his friends or something it's a different story. Buying a vacation home so his daughters can enjoy the summer (most likely without having to work summer jobs)? I don't see the issue.
Jeanne – judgemental, aren't we. How do you know that the father wasn't in charge of investing the inheritance for the kids? And who are you to say that investing in the vacation home wasn't a good use of those dollars? Sniping little attack.
It is very wrong. I have to say because my grandparents left me money and my father spent it. Now I have to pay for my own college education with no help from my parents that money would have been a life saver.
This is why, as an estate planning attorney, I always suggest that an independent third party be named as an additional custodian or trustee of funds left for a minor child. Unfortunately, my experience is that more parents than not take the same attitude that Michael did toward their minor childrens' inheritances. In addition, considering the substantial carrying costs of a vacation home and historical appreciation rates on real property compared to other investments, the grandchildren's inheritance would be much better invested in a diversified portfolio of bonds and securities. So any rationalization that the parent may have that the home is a good investment is also faulty.
Wow!!! What a slap in the face! Depending on how large the inheritance was, it could have paid for their educations. If I were their grandfather, I'd be rewriting my will entirely.
That is just wrong and this person should be held accountable for his actions. He obviously was thinking of himself and how he could benefit from his kids' inheritance and in my book that is very, very unethical. I sure hope something is done to recoop the childrens' losses and it is put far away from the grasp of his greedy little fingers.
Why? Who, then, should decide how the funds are invested? Why not invest in real estate that can be used as it's appreciating?
The best person to judge what is best for the girls is the father (or mother). Give him a break!
Money Magazine's ethicists, Jeanne Fleming, Ph.D., and Leonard Schwarz, are the authors of "Isn't It Their Turn to Pick Up the Check?" (Free Press, 2008).
Theft of your children's inheritance is a particularly heinous crime. It's unfortunate that those in whom trust is bestowed are often unscrupulous and conniving. My heart goes out to those young girls and I hope that some day, in some way, justice is served.