05 May How should I plan my estate for kid who is bad with money?

Q. I have three children. One is not good with money and doesn’t have a long-term job. It’s like part-time here and there, but she never asks me for money. I want to help her but also be fair to my other kids. Should I start gifting, or what?
— Controlling, maybe

A. Family and money can be touchy.

How you plan for your estate depends on your goals for the money, and it makes sense that looking at how your heirs may handle the funds is an important consideration.

If treating all of your children equally is important, you have several options, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

You could gift an equal amount to all three of your children, or you could offset your daughter’s potential inheritance by the amount you gift to her — which would mean adding a provision in your Last Will and Testament providing for such an offset — or you could loan your daughter the money instead of gifting her the money, Romania said.

By loaning your daughter the money, she would be obligated to repay the funds together with a low rate of interest to you, or to your estate upon your death, she said.

“Notwithstanding the method you choose, if your child is not good with money, directly providing your child with money may indicate your good intentions but result in negative consequences, for example, your child making less of an effort to work or using the funds to splurge on non-necessities,” she said. “Instead, you may want to offer to pay for certain expenses of your child directly, such as rent or utility bills, car payments or for gas, medical or dental bills, and so on.”

Romania said you can make a gift of up to $19,000 per year to any individual — in cash or kind, directly or indirectly — without having to report it; over such amount it should be reported on a federal gift tax return, although no tax would be paid until total gifts in your lifetime exceeded your exemption. The current exemption is $13.99 million.

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This story was originally published in May 2025.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.