Woman questions fairness of paying for nephews’ education from future inheritance
A 60-year-old woman wrote to MarketWatch’s The Moneyist column to ask whether it is fair that her 87-year-old mother wants to fund the education of her younger son’s two children during her lifetime. The mother plans to pay educational institutions directly and later deduct the money spent from the son’s share of her inheritance.
One grandson is already attending college, while the other is in high school. The letter writer has a high-paying job, is married and has no biological children. She asked whether she could request that her mother give her an equivalent amount, even though she does not have children herself.
The brother’s financial situation
The woman’s brother is 57 years old. According to her, he previously held corporate positions with six-figure salaries, but left that career and now works at a job he enjoys, earning less than $50,000 per year.
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The sister also said that her brother has limited retirement savings and previously made poor financial decisions. She helps him with taxes and financial matters, while she and their mother have supplemented his income for years. The woman fears that if her brother receives a substantial sum, he may manage it improperly and that she will have to support him financially in the future.
The columnist’s advice
The author of the response advised supporting the mother’s intention, but not making it conditional on an equivalent payment to the sister. In his view, the father’s financial difficulties and mistakes should not deprive his children of the opportunity to receive an education.
To finance education expenses, the columnist preferred a 529 plan over a trust. He noted that funds in such an account can grow tax-free, while withdrawals for qualified education expenses, including tuition, books and housing, are also not taxed. A trust, he said, is a more flexible instrument, but its creation and administration may require significant legal, accounting and administrative costs.
