I Know a Way to Help My Relative Who Is Having Money Troubles. But It Could Backfire.

Pay Dirt Photo illustration by Slate. Photo by Andrii Iemelyanenko/iStock/Getty Images Plus. Pay Dirt is Slate’s money advice column. Have a question? Send it to Kristin and Ilyce here. (It’s anonymous!) Dear Pay Dirt, My aunt died seven years ago. I am the executor for her trust. Her will was pretty straight forward: She wanted most of her assets to be split evenly among five relatives (including me), and we are definitely fortunate. One of the accounts I continue to manage is an inherited Roth IRA. So far, I have left it alone and just split the annual required minimum distribution (RMD) equally each year among the five relatives. It’s been a great safety net. But now one of my co-beneficiaries is experiencing significant financial hardship, and her share of the inheritance could help her navigate her way to a better situation. I am trying to figure out how to release her share of the funds to her in the most equitable way to all of us. The simplest way I can think of is to release one-fifth of the assets to her, and the remaining four of us will continue to split the RMD moving forward. Does this make sense for all of us? What are the consequences? Part two of this question is: How do I help my relative spend this money wisely? Could I put the funds into an account I control and dole it out over time? She has gone through some tough times in recent years, but she has never been good with money, and I worry that she will blow through this inheritance and have nothing left. I’d greatly appreciate any recommendations, and tips about how to avoid bad outcomes. —What Would Auntie Do? Dear What Would Auntie Do, With so much at stake, you definitely want to consult with a financial planner or an estate attorney—someone who knows the ins and outs of inherited Roth IRA rules and the tax implications that go along with them. If you release a chunk of those assets now, I’d worry it might break or trigger certain distribution rules that you can’t undo, and this could have unintentional consequences for how the trust is handled. Or it might affect how the rest of the beneficiaries receive their payouts down the road. Plus, I would imagine you also have to check to see whether the trust even allows you to make an unequal early distribution. The rules have also changed over the years. But again, you’ll want to consult a specialist about all of this—someone who is professionally qualified to help you navigate it. As for the second part of your question, about how to help your relative with money: I understand you want to be there for a family member, but controlling her finances doesn’t give her the chance to learn from experience—plus, it creates extra work for you. Also, if the money legally belongs to her, putting it into an account you own might even trigger a whole other mess of tax and record-keeping questions. If anything, you could offer to sit down with her, take a look at her finances and give her some input on how to handle her money down the road. Or better yet, talk to a professional who can look at her numbers and help her come up with a customized financial plan. You can offer gentle guidance without becoming her financial planner. —Kristin Please keep questions short (<150 words), and don‘t submit the same question to multiple columns. We are unable to edit or remove questions after publication. Use pseudonyms to maintain anonymity. Your submission may be used in other Slate advice columns and may be edited for publication. Classic Prudie I’ve been with my wife, Chelsea, for 15 years, married for 12. She is a wonderful person and a great wife. However, I’ve fallen in love with someone else. I met Beth two years ago when our companies worked together on a project for six months, and we hit it off. Not only did we work great together but we formed a fast friendship. We have a similar sense of humor and a lot of the same interests and passions. We also have a similar background as children of military parents and bonded over moving all the time and base life. Over time, I found myself developing feelings for her. At first, I thought it was just friendly feelings, but they kept getting stronger until I realized I was falling in love with her. I can’t remember ever feeling this way with my wife, not even when we were first dating. Never miss new Slate Advice columns Get the latest from Prudie and our columnists in your inbox each weekday, plus special bonus letters on Saturdays. Advice Personal Finance Real Estate