When Your Adult Child Is a Financial Train Wreck

Q1. My husband and I are parents of three. Our older daughter, Amanda, who lives close by with her family, has a stable job, and is fiscally responsible. Our son, Joseph, is almost done with medical school, and is also responsible when it comes to money. The one who we worry about is our middle child, Rachel. She is a spendthrift, who isn’t good about paying her bills and lives way beyond her means. She recently got evicted from her apartment for not paying her rent and had to move into our basement. It’s been six months and she hasn’t gotten a job yet, but says she is looking.

My husband and I have no problem helping Rachel out, since she is our daughter and we love her. However, if we keep supporting her completely, it will derail our own retirement plans. Also, our other two children are beginning to express their feelings of resentment and concern. How do you suggest we set limits and cut her off when the time comes, while still helping her get back on her feet?

Q2. We’re also getting ready to do our own estate planning documents. We feel like Rachel will need more money than the other two children, but want to be fair, and don’t want to keep enabling her. How do you suggest we proceed fairly in this situation? Thank for your help!


A1. Giving adult children money is quite common in the U.S. In fact, six out of 10 parents with adult children said they have given their children financial help in the previous 12 months, according to a Pew Research Center survey.

What many parents that help their children don’t realize, however, is that the toll can be steep. Supporting able-bodied children or repeatedly bailing them out of debt creates dependency when parents should help them become self-sufficient. Helping an adult child too much can:

· Delay or derail the parents’ retirement;
· Fuel sibling resentment and family discord and, in certain situations;
· Enable dangerous behavior, including addiction or untreated mental illness.

In many situations involving money (which may or may not be the case with your daughter), parents are enabling their children, and the children have no incentive to change.  However, parents can set limits and should communicate those limits to their adult children. Here’s what planners advise:

  • Figure Out What You Can Afford: What would happen if you continue helping your daughter at your current level? You may need to wait longer than anticipated to retire. To play it safe, if you can’t agree on how much you can financially assist your daughter, enlist a third party such as a retirement planner, accountant, or even a therapist to help.
  • Set Expectations: Be clear with your daughter about how you can and cannot help. If she isn’t genuinely trying to be self-sufficient, perhaps any help you give should have an expiration date. If she needs basic budgeting help, credit counselors can offer advice, classes, or debt-management plans.
  • Set and Communicate Limits: Set limits on how much you are willing to give your daughter and for how long. It’s good to qualify assistance with some boundaries and parameters that assist the child temporarily and also do not cause undue burden on the parents’ situation. It’s important to establish these very early on and set a precedent in the beginning, so everyone is on the same page.
  • Target Your Help: Handing over cash to irresponsible adult children is typically a bad idea. Instead, parents should direct the money toward something specific, such as paying the mechanic for a car repair or taking over certain bills, planners say.
  • Consider Your Other Kids: Money shouldn’t equal love, but it often does in the siblings’ minds when financial help is doled out unequally. Siblings also may worry they’ll have to support the parents or the financially irresponsible child someday, which adds to their resentment. Knowing the parents have a plan to wean that person, or some kind of a figure where they’ll stop giving, can ease the situation.

Once you have decided the gravy train must stop, clear communication with your daughter is key. Most kids don’t realize how much the support they receive is costing you because you’ve probably never told them. Be honest about the impact. Let her know there is no trust fund, and that you are making real trade­offs to support her. That usually accelerates the time frame.

Remember, one of the benefits of supporting adult kids is that parents and offspring often end up talking more about money than might otherwise be the case, sparking topics such as what it takes to run a household, how to stay out of debt, and how to advance in your career. Keep those discussions going even after you’ve shut down the Bank of Mom & Dad. You might also treat them to a session with a financial adviser or introduce them to tools that can help them manage their money at sites like mint.com, budget­tracker.com, budgetpulse.com, and learnvest.com.

Should you ever want expert guidance with your financial planning process, remember that qualified assistance is available right here at the Farr Law Firm. Our team looks forward to helping you – no matter where you’re at in your financial journey! Call us to make an appointment.

A2. Ways to Minimize Conflict: What You Can Do

It’s understandable if you don’t want to see your grown child in a financial bind.  But, playing financial favorites, even for a good reason, can have unintended consequences. Money inequality among siblings — perceived or otherwise — can introduce even further complexity, affecting relationships. Here are some things you can keep in mind when doing your estate planning documents, in an effort to minimize conflict among your children.

1. Leave to children equally: Treat children equally. Unequal allocation can be seen as a showing of favoritism that will cause resentment and hurt feelings. To avoid fighting, don’t penalize successful children by leaving more to their needy siblings, or conversely, reward successful children because they are favored. An exception for this general rule is for children who are disabled.

2. Be detailed about your plans: Taking the approach that “my children will figure all this out” without you providing detailed instructions in your estate plan will not lead to a harmonious distribution of your assets. While your children may not be satisfied with the choices you’ve made, they will be less likely to blame their siblings because they’ll know the allocations were what you wanted.

3. Update your estate plan regularly: Make estate planning changes when there has been a change of circumstances, especially after a divorce. Additionally, estate planning should be reviewed after other life changes, such as the death or divorce of a child or the illness, addiction, or incapacitation of any beneficiary.

4. Include a letter to your children: This letter is not to say who gets what; that should be outlined in your legal documents. This letter is to tell your children you loved them and tried your best to be fair in the estate planning process. It can go a long way in reminding them to move past the fact that they didn’t get the clock they wanted from your estate. Remind them in this letter that family goes a lot deeper than possessions and that you hope they will remember that fact.

5. Consider putting someone who isn’t a family member in charge of the assets: Having a third party in charge (such as a law firm or trust company), even if they charge a fee, will eliminate the risk of creating family disharmony. Everyone may end up being mad at the third party, but at least they are not mad at each other. That may be money well spent to preserve family unity.

By using some of the recommendations above when planning your estate, you will be more likely to protect your most important legacy — your family!

Dealing with the Conflict

Disputes about money and inheritances can be ideal cases for family mediators, social workers, or Aging Life Care Expert who may help get past long-standing emotional roadblocks, family competition, controlling behavior, denial, or other issues interfering with successful resolutions.

Family meetings are also a way for siblings, parents, and other concerned relatives or friends to try to clarify the situation, work out conflicts and set up a care plan that, ideally, all can agree upon. Although emotions might run high, it’s possible to conduct a productive meeting by setting an agenda and keeping to it, giving everyone a chance to speak, and including the professional assessment and recommendations as part of the discussion.

Estate Planning is Important for ALL Families

At the Farr Law Firm, we have strategies in place to help all types of families plan for themselves and their loved ones. With advance planning, each person, regardless of their family situation, can retain the assets it has taken a lifetime to accumulate and the peace of mind that their child(ren)’s needs will be adequately and properly addressed. If you or members of your family have not done your estate planning, or not had it reviewed and updated in the last five years, please contact us as soon as possible to make an appointment for a no-cost consultation:

Fairfax Estate Planning: 703-691-1888
Fredericksburg Estate Planning: 540-479-1435
Rockville Estate Planning: 301-519-8041
DC Estate Planning: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.


  1. Great article. This seems to be a common problem for parents who have children who fail to launch or take responsibility for their own lives. Parents need to draw boundaries; otherwise dysfunctional children will continue to drag their parents down with them. It is a hard boundary to draw, but one that is necessary. I have met parents who have created estate plans in Arizona that include a trust to ensure their children are taken care of, but do not squander their estate. Great article. This seems to be a common problem for parents who have children who fail to launch or take responsibility for their own lives. Parents need to draw boundaries; otherwise dysfunctional children will continue to drag their parents down with them. It is a hard boundary to draw, but one that is necessary. I have met parents who have created estate plans in Arizona that include a trust to ensure their children are taken care of

  2. An in-depth post like this with so much valuable information must help everyone in terms of estate planning. There is so much information in this content that I have bookmarked it for future reference. Thanks for sharing!

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