My Friends’ Son Can’t Work and Needs Financial Help. Somehow, This Is My Problem.

Pay Dirt Photo illustration by Slate. Photo by Dima Berlin/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, I have dear friends of more than 40 years who have three children. One is my godson, “Alex.” He has both medical and a mental illness that have interfered with his work history, making his income sporadic. He is intelligent and hard-working, has been well-liked by his employers but because he has intermittent hospitalizations he has been laid off multiple times. I am much better off financially than his parents, and they asked if I would be able to help him financially. I am very willing to do so. I would like to leave him some money after I die, but am concerned that if his mental illness gets worse, he may squander the money. (Alex has been very good with budgeting so far, but he is only in his mid-30s.) I know there are special trusts for disabled people, but don’t know what they are or what would be needed to prove he is disabled. I also don’t want his siblings to think that I care less for them, since I wouldn’t be planning (or able) to leave them as much money. What can you suggest for me? —Loving But Clueless Godmother Dear Loving But Clueless Godmother, What a generous thing to do! The usual disclaimer applies: You should consult an estate planning attorney who specializes in special needs planning. They’ll probably point you to a specific vehicle built for this kind of situation, called a “third-party special needs needs trust.” With this kind of setup, you can designate money for Alex in an account, then assign a trustee responsible for managing and distributing the funds. Plus, because you’d be funding it with your own money, there’s no formal disability determination required. The trust holds the inheritance, and a trustee you name distributes the funds for his benefit. Of course, you want to choose this person carefully. It should be someone financially savvy, someone who is likely to outlive you, and most of all, someone you trust to use the money for Alex’s benefit. Clearly, you trust the parents enough to take them up on their offer for financial help, but depending on the other factors, you might choose someone else, like a sibling. An attorney can help walk you through this. Speaking of siblings, I would talk with your friends about how to frame the conversation with their other kids. Get an idea of how to best handle it. Either way, you can communicate to them that this gift reflects Alex’s needs—not your love. —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. More Money Advice From Slate My spouse is worried about money all the time, but objectively we’re fine. I make low six figures and have mid six figures saved, plus a trust fund in the millions. They make low/mid six figures annually and have high six-figures saved. Both our families are wealthy and willing to backstop us if necessary. 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