My husband and I gave some of our land to build a home and recently loaned money to pay off our son’s mortgage.

He and his wife have made no effort to pay us back. They are both in good health and employed, but always say they are short of money. When we brought up the subject our son, an only child, indicated it was no sacrifice on our part as the funds were part of an insurance settlement, we had sufficient for our needs and he’d just inherit it all one day. We are surprised by our son’s response, especially considering his father’s recent health issues when he did not step up to help with yard work that his father couldn’t do. We are naturalized citizens and have worked hard all our lives. Homeownership was part of the American dream we accomplished and wanted to give to our son. Now we feel we have failed to teach our son appreciation and good work ethic. We are considering bypassing him to preserve our modest home and assets for our grandson, as we can’t count on our son to save for his future. What do you think?

I think you are hurt and angered by your son’s words and attitude coupled with his inaction when his father was ill. I also think you did not lay sufficient ground work and the legal paperwork with your son on your expectations concerning the loan, and it may not be practical to demand repayment now. But it’s possible your son and daughter-in-law are young, hardworking and there is still time for them to mature and give you, as parents, the help you need from time to time especially if you take active steps to teach them by creating enjoyable joint yard work projects for father, son and grandson, mother and daughter-in-law. Even if that means your husband only supervises. You may also want to talk alone with your adult son about your actual needs. Be prepared to show some tough love if and when they come asking for another infusion of money due to their spending habits, but don’t stop giving gifts altogether.

From an estate planning standpoint you can establish a living trust with distribution provisions that bypass your son in favor of your grandson or create a testamentary trust in your wills for your grandson regarding your home and other assets selecting someone other than your son as trustee. The trust and trustee provisions could later be amended if you change your mind. Of course tax issues and long-term care needs should be factored into your planning.

I hear a lot about attitudes like your son’s from clients in all economic groups. It has been said that if we fail to appreciate the accomplishments and sacrifices of our elders we will lose the legacy of their hard work, devotion and sound values to our own detriment. Entitlement, ingratitude and free spending fuel the epidemic of elder abuse our country is now experiencing of which some 80% is attributed to family members. Abuse is different than asset preservation planning and responsible use of a power of attorney to carry on a gifting program that helps create inner generational financial stability.

Parents need to be mindful to include children in work and volunteer projects. They need to give children meaningful, well-defined chores that contribute to the family well being, and use allowances to help teach performance-related results. As a way to teach financial responsibility parents and grandparents need to provide children, especially teenagers with opportunities to show initiative in earning and saving money over a period of time to realize their personal goals and desires. You might want to take an evening and some play money to teach your grandson how a family budget is set up and then let your grandson earn some money doing yard work, a portion of which will be placed in a savings account. Even very young children can pick up sticks and help plant flowers. You don’t have to be overly didactic to open a dialog with your children about saving together for a special goal, like a family vacation.

The American dream, the idea that an individual can prosper and own a home through honesty and hard work faces challenges in each generation. The current cost of college tuition and healthcare, the sluggish economy and housing recession has affected the net worth of many middle class households and is particularly affecting young men’s abilities to find full-time work with the kind of benefits that allows for the traditional-one-wage-earner marriage on which to support a family, even with a higher education. It is harder now that it was 10 or 20 years ago to make ends meet, although the overall level of things we enjoy due to technology might be greater. Many parents are inclined to help children not only with some funds toward a post-high-school-education, but also save for a down payment for a starter house while still living with mom and dad. I suspect what you and your husband have done for your son and grandson is as significant as what my grandfather did for his family.

My grandfather did not read, write or speak English when he came from Italy as a teenager. He worked to bring his sisters and father to America. The village he came from was destroyed by a volcano two years after his elderly father arrived, most extended family perished. He dug ditches to purchase his little house and raised nine children alone after his American wife died. He sent three of his five sons to war against his homeland and another served in Korea. All this before he became a naturalized citizen. His sons had the GI bill to help them get homes, but he helped each of his daughters with a small down payment, leaving his own home to the daughter that took care of him in his old age. I mention this because my mother taught me how Grandpa Cufari’s large garden fed a family during the Great Depression and his work, love and commitment to hold a family together helped ensure the foundation and financial success of my mother’s generation. A couple of his grandchildren graduated from college, many of his great-grandchildren have. Born a peasant, his posterity are now middle class Americans.

I applaud you “earning” the American dream and the thoughtfulness you have shown your son in eliminating a significant debt for him and your daughter-in-law. Depending on how much you gave you might need to file a gift tax return since the loan is not being repaid. You and your husband are wise to stand back now and let your son and daughter-in-law manage their own financial affairs. This does not have to be a decision made in anger. You are teaching them that enterprise is always required to “earn” their dreams. Take credit that your son is employed, hopefully happily married, and given you a grandson. This is part of the vision you had for him as you struggled as young parents. Your continuing financial support is not required. Clearly your role as parents is not done nor should you expect it to be. Life’s lessons and the sharing of wisdom gained over time helps the next generation improve upon itself.

 

Disclaimer:  Information contained in this column is meant to be of general information on frequently asked questions concerning disability, elder law, estate planning and probate law, and does not contain specific legal advice to a client.  No attorney-client relationship is created by reading this column.

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