My Sister Squandered Her $400,000 Inheritance in a Stupid Way. I Could Help Her More, But I Don’t Want to.

Pay Dirt Photo illustration by Slate. Photo by EvgeniyShkolenko/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 sister, who is 55 (three years my junior) has had life-long problems with money. She’s a great person and a very talented musician, but she never plans financially and is always dependent on others to support her in some way. She lives in an expensive city and insisted for years on living alone with high rent while giving private music lessons, barely scraping by with help from our dad who sent money several times a year.. When our father died six years ago, I was executor of the estate, and she received about $400,000. Unfortunately she invested it in a friend’s business venture that went bust. She stopped teaching lessons, lost her apartment, and temporarily moved in with an elderly friend who thankfully isn’t charging rent. Now she’s doing food deliveries and is miserable. Since our father died, she’s asked me for money a number of times. I’ve given her around $5,000 total, which is probably a fraction of what she would have gotten from my father in that time period. The truth is, I can afford to help her some, because we are opposites financially: My husband and I invested early and often and were lucky and able to retire early comfortably. I think If I continue to give my sister money when she asks, she will expect it on a regular basis, like with our dad. That’s just the truth. Our older brother (who is wealthy) gave her a few thousand dollars last year, but won’t help more. Maybe he’s right. If you try to give her advice, she gets angry—for example, when I suggested she NOT invest all her money in a friend’s business, she bit my head off. She’s not even speaking to me now because I tried to give her advice about a recent car accident, and we somehow ended up in a screaming match. I know this is her responsibility, yet I feel overwhelmed by guilt. Her health is poor. I don’t want her to end up homeless. But I also don’t want her to move to our city and live in our two-bedroom house now that our last child has launched—something she mentioned in a conversation last year. My husband is wonderful and has never questioned helping her, but I can’t keep it up. Is there even a solution? —Sister’s Keeper Dear Sister’s Keeper, It would be easy to tell you that you shouldn’t feel guilty—and you shouldn’t—but I know guilt doesn’t follow logic. And it’s not great to feel like you’re either abandoning your sister or being taken advantage of by her. Broadly speaking, there are a couple of options here. You can either face the guilt, find a way to process it, and accept that your relationship with your sister might be strained by you cutting her off, or you can keep funding her lifestyle and deal with the resentment that might follow. If you choose the latter, at least put her on a set allowance where you and your husband decide on the amount, because as you said, she’s going to expect it on a regular basis. But if the amount is limited, her expectations might be, too. This might strain your relationship, too, if she does start to expect larger amounts over time or if you notice her making bad choices with the money. At least with the guilt, you’ve set a boundary and the problem is somewhat contained. That path is uncomfortable, but the other path is unsustainable…and will probably be uncomfortable over time, too. Plus, having a boundary protects your finances and your marriage. It’s great that your husband hasn’t said anything about it, but resentment has a way of creeping up over time. Your sister has already shown the financial pattern she follows, and if you continue to support her financially, that pattern is probably going to continue. I get that you’re worried about her health and her housing situation, but if something happens, you can decide to step in on a case-by-case basis rather than just give her money indefinitely. But even then, I would be cautious about paying her way. Put simply, you can care about your sister without becoming her retirement plan. 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. Dear Pay Dirt, I need to renovate my mother’s bathroom to be accessible. I have a trusted person to do the work. Fom everything I’ve heard, the price quoted is very reasonable. The problem is the quote is still more than we have. I have about $15,000 in cash that I can put into the project, but it will likely be about $25,000 total. My mom lives on a small fixed income, but I have good credit. The cash would be from my savings, so my question is this: Where do I borrow the rest from? I have a $50,000 home equity line of credit that is at a decent but variable rate (I took it as a precaution). I could also draw from my 401(k). I have both these options, but I don’t know which is smartest. I can probably pay the loan back in a year if I am aggressive, but I also know that things come up. I don’t have any other debt thank goodness, but I will need to rebuild my savings (I was in the process of doing that when this and some medical bills came up). But that is what savings is for. Which option is best? —Aging in Place Dear Aging, The HELOC is probably your best bet. A variable rate isn’t ideal, but unlike digging into your 401(k), the HELOC won’t trigger taxes or penalties, doesn’t interrupt your retirement savings, and is designed for exactly this kind of expense. A somewhat risky third option, if available, is to pay for the extra repairs with a 0 percent interest credit card that comes with a long promotional period. If you’re prone to credit card debt, I would stay away from this option entirely, but the idea is, if you pay off the card before the promotional period ends, you won’t have to pay interest at all. Sometimes these promotional periods are quite long— up to 21 months in some cases. Of course, the risk is that if you don’t pay it off in that time period and the interest rate is crazy high; many people end up in debt for years doing exactly this. There’s usually also a fee associated with transferring a balance. It could also affect your credit score. But many people use this method as a way to borrow money in the short-term. The key is to always have a back-up method for paying it off in case the deadline creeps up on you—that might be an emergency fund, or, in your situation, perhaps that HELOC you mentioned. I can’t caveat this option enough, but it does work for some folks. Given your situation, though—no other debt, strong credit, and the ability to repay aggressively—the HELOC is your safest borrowing option. It keeps the problem contained to the house, doesn’t touch your retirement, and doesn’t open you up to the possibility of high interest debt. —Kristin More Money Advice From Slate My parents love to travel. They are always off on one cruise or tour to another. My parents worked very hard their entire lives, so I don’t begrudge them traveling so much in their golden years. My wife, however, does. 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 Family Personal Finance