Thursday, May 23, 2024
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Entitled or Not?

When Thomas Gilbert received a 30-year sentence in September for killing his father over a money dispute, it ended a four-year-long case that sent a chilling warning to any parent who ever considered giving money to an adult child.

Mr. Gilbert, the son of a Manhattan hedge fund manager, was raised with a silver-spoon lifestyle, attending the elite Buckley School for boys in Manhattan, the exclusive Deerfield Academy in Deerfield, Mass., and Princeton University, but he had trouble holding down a job after graduation. So, his parents gave him a monthly allowance, in addition to covering the $2,400-a-month rent on his apartment in Manhattan’s Chelsea neighbourhood. When his father cut the allowance, an outraged Mr. Gilbert, then 30, took a gun and fired it into his father’s head at point-blank range.

My friend’s son has returned home after a two-year stint in Bengaluru. He wants to recover from another failed attempt to establish his career. He is 34. They will now house, feed and take care of him and hope that their only child will find a job that he can keep. The family finances are already precarious, but my friend has signed up for another part-time job she will do after office hours.

You want to support your child, but if your child is just serially not self-sustaining, what do you do? How do you wean your adult kids off this cruel financial dependence?

Research has established this pattern all over the world, including the West, where ruthless independence at the age of 18 was the norm. 

We have gone through a generation of parents known as ‘helicopter parents’ who have to know and solve every one of their child’s problems, shielding them from adverse consequences all their lives. Even if they arose from conscious choices that the adult child had willingly made.

While the Gilbert case is an extreme example, it speaks of a common dilemma for parents with money to spare: When and how much should they give to an adult child who comes asking for money – especially one who is able-bodied and well-educated? How long should any financial help last? And should it be a gift, loan or advance on an inheritance?

Image courtesy: New York Post

Caption: Thomas Gilbert shot his father for cutting his allowance of $1000

Legal experts caution parents to carefully scrutinize the need for the money and how it could affect the child’s long-term ability to live, work and succeed in the world.

Money is a metaphor for love and control. The biggest challenge is providing enough money to help a child through a challenge, but not giving to the point where it kills the person’s motivation to work and succeed!

If money is needed for an urgent matter – like emergency surgery, medical bills, a lost job, house foreclosure or costly divorce – it’s a no-brainer: parents should help in such situations as long as they can afford it. You are rescuing them temporarily; you are not indulging them forever and putting them on your payroll.

But even then, parents should do a little due diligence first. You must be careful not to be taken advantage of by a child. There is a story of an older couple whose only child had a college degree in geology but struggled to find work. Even after taking a job in a small mining town hundreds of miles away, the son continued asking his parents for money to cover housing costs, prescriptions for illnesses he said he and his wife had, and bills related to their disabled child. But years later, when the elderly parents were finally able to make their first – surprise – visit to the town, they were shocked to discover a lavish, well-furnished home, shiny new cars in the driveway and a live-in nanny, who told them the couple was in Puerto Rico for a 10-day cruise. The young parents were healthy, both had high-paying jobs and their child was not disabled. The parents felt duped and immediately cut their son out of their will.

Experts see some needs, like education, as a compelling area for giving money to children. Paying for college tuition can be an investment in a child’s long-term employment future.

But how should parents handle the growing number of young people, especially millennials, who are staying home longer, marrying later – if at all – and relying on their parents for free rent, food, and car insurance?

This basically is creating a dependency!

Parents should not allow their adult children to live rent-free without any deadlines and not to pay an allowance without any strings attached. We do not want another Tommy Gilbert situation!

Image courtesy: The Economic Times

First, make sure there is a rule-based system that clarifies the basics. In many Indian homes where the adult child is living at home with the parents, there is a pooled account for household expenses into which everyone contributes. There is a clear understanding of who will do what, and who will spend for what. In exchange for saving on rent, and the possible inheritance of property, children take care of their parents well into old age. Not all arrangements are firm, but the broad rules are set. There is no harm, for example, in providing a fixed monthly income for a period of time for ‘sons who want to return home’; let them live independently, money being given for a fixed time, within which ‘he’ has to find a job.

Generally, parents making bad money decisions fall into one of two categories, hoarders and cash cows:

Hoarders take ‘tough love’ to another extreme – They refuse ever to give an adult child money, insisting that the child work multiple jobs to pay for college or medical bills. Then, when they die, they leave their entire estate to an adult child who might no longer need it.  For example, there was a ‘young man’ who came in to pick up a check for the $1 million his mother had left him in her will. It was a classic hoarder story. The client’s parents refused to have a dentist fix his crooked, discoloured teeth as a child, making him feel self-conscious, and would not spend anything to help with him with college, his wedding or the purchase of his first home. “When I really needed the money, it was never there for me,” the son told him. “What the hell does she want me to do with this now – I am 70 years old.”

Give your children monetary gifts while they are alive, rather than leaving everything in a will. This helps adult children when they need it most, and it can save on inheritance taxes when a parent dies.

There are the parents who, because of pressure or guilt, hand over money every time an adult child requests it – even if it is for frivolous reasons, like taking a trip or buying the latest high-tech gadget, and even if they cannot afford it! 

Why??!

Recognise your emotional limitations and psychological responses to your child’s demands. It is important for both parents to agree to limit their support. Many parents choose to live separately from their children, but their being needy of acceptance and attention leads to financing their children and remaining unwilling to say no. Children learn which button to push!! 

Do not give anything away that you are going to miss, cannot afford, may need or puts you into poverty. About 90 percent of liquid assets are spent during the last 10 percent to 20 percent of a person’s life, largely because of medical expenses.  Parents should not give away more than 10 percent of their liquid assets.

Reinforce the power you wield on your assets and money. It is what you have earned in your lifetime, and you have the right to spend it as you see fit!

Sometimes a loan, rather than a gift, is more appropriate (very American, but could be tried out in India). Draw up a promissory note with a lawyer, when offering a loan. Gift or loan, there is no guarantee that children will give money back if a parent needs it later. 

A couple gave each of their five children 50 lakhs, with the understanding that if the parents ever needed money for medical care, the children would give the money back. But when the surviving spouse incurred medical conditions that required round-the-clock care, two of the five children refused to return the money to allow their father to receive care in his home. His money, remember!!

Giving a child money for certain milestones, like college graduation, marriage or the birth of children may seem like a good idea on paper. But it can stoke feelings of anger and resentment in children who do not marry or cannot have children. Be open and fair when giving money to adult children. If money is given to one child, the other children should be informed and promised similar monetary gifts either now or at the time of inheritance.

Most children keep a scorecard – even if parents do not. If that scorecard of lifetime gifts is not roughly equal at the time of the parents’ death, then there is a problem – not a legal problem – a family problem.

There is story of a couple cutting their daughter out of their will because they felt she did not need the money – she was married to an extremely wealthy man. The decision caused considerable hurt and anger from the daughter. In her mind, it had nothing to do with that money… It was: does my dad love me the same as everyone else?

As per sociologists, child-centric family structures have given the modern society a psyche that parents exist for the welfare of their children, and they must do whatever it takes. This completely emotion-driven decision to create a cohesive family unit burdens parents with the responsibility of their child’s failures. The obsession has led to a generation of helicopter parents who have to know and solve all of their children’s problems, safeguard them from everything that could go wrong, and support them when it does. This applies to conscious choices their children willingly make in spite of knowing the consequences – especially financial.

There is a story of a young Indian man, who having spent his life in the States, decided to visit his ageing parents. He hung around for quite a while, and finally wormed his way into their minds, their finances, their lives, their thinking… he gradually got them to sell everything one by one; accounts were opened, and money was put into the young man’s name. Basically, these parents were trusting but extremely naive; they were keen that their son should get married and settle down. As things unfolded, they discovered that he had already gotten married to an American lady. The story goes, that the parents decided to move to the States, tickets were bought, the day arrived for them to leave… they reached the airport, and the son told them to sit down while he checked them in. He never returned. This couple were left destitute, with nothing in their name, no telephone numbers or address that they could contact to trace their only beloved son….they finally ended up in an old age home in Pune. The father died a broken man… followed by the mother some months later. What was their crime? Where had they gone wrong? Why did they not see the signs? Why did they trust blindfolded? Why, Why, Why?

So, where does this put us?

Do not let children push the button that triggers your need for acceptance and attention from them. If you are willing to say no, just do so. Emotions of fear, hope, guilt, remorse, or threat should not direct your feelings.

Lastly, remember that you are the sole owner of what you have earned in your lifetime and being your children does not give them the right to your assets and money. You may use it for your retirement, or secure your grandchildren’s future with it, or even give it out in charity – you have the right to spend it anyway.

The bottom line is:  If you have got a grown-up kid who asks for financial favours, ask them for time to think about it instead of agreeing straight away. Buying time will reduce the burden and provide the space to say no if you must! And do not hesitate to say NO.

Let adult kids grow up and manage their lives, their finances, their families on their own… help them to become better functioning adults!! A piece of sane advice…When an adult child asks for a favour from babysitting their child… to asking for money… or anything else… the standard answer should be: “Let me think about it and come back to you.” Do not force yourself to agree immediately… at least you have made room to say NO, if you have to!

To sum up in the words of Abigail Van Buren: “If you want your children to turn out well, spend twice as much time with them, and half as much money!” Money is a life skill – and as parents, grandparents, interested adults – it is up to us to make sure our children are prepared for the financial world they are going to face!

Thank you!

Dr Monika Dasshttps://seniorstoday.in
Monika Dass is a Chartered Psychologist, a Chartered Scientist and an Associate Fellow of the British Psychological Society, UK. A trained pianist and vocalist from the Trinity College of Music, London, Dr Dass has influenced many lives with the joyful learning of music

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