<p>Ahhh… mutual funds. LOL. I have been dealing lately with the incompetence of the $%)($^_)@$^&#%&$)(+ USPS (side story for another time) so MF was registering as another expression in my head.</p>
<p>If younger s had demonstrated the level of financial responsibility that older s did, we (I) wouldn’t be as concerned. He has been responsible, just not as responsible as I am comfortable with. Hopefully that will continue to develop with time, experience and maturity. SO, DS will have the access to his funds, but DH will stay on the investment account.</p>
<p>We had a $76,000 college fund for our son when he entered college. When he turned 21 during his senior year of college there was about $45k remaining and we turned the account over to him. We felt comfortable doing this because he is very responsible with money. He didn’t make any unusual purchases during college but did dip into the remaining monies to finance his move following graduation in 2008 and to by furniture for his first apartment. He also used some of that money for the down payment on a new Mazda 3S in 2010. He also did use the money to pay for some day to day living expenses in order to fund a 401k account at 6% or so.</p>
<p>I have no idea how much remains in his college fund if any. That is not any of my business.</p>
<p>Your 2008 grad sounds like my 2008 grad, even down to buying a mazda3! I can see my younger s , though , considering a motorcycle. Totally out of my comfort zone, as I work with people with brain injuries.</p>
<p>To the best of our knowledge, S still has all the funds we saved from the time he was born & turned over to him when he turned 18. Have not asked him about them and don’t care. He has not spent much but has been earning a good salary and has rent that is well under his wages. Moving expenses were covered & he does have a used car. Has been mulling over whether to replace said car or keep repairing/maintaining it. We expect that he has significant assets at hand and hope he will continue to save them so he will someday be able to buy a home in HI or wherever he chooses.</p>
<p>Would they have been successful if they had been trust fund dribble recipients? </p>
<p>My take is that the female was much more herself since she had control over all her assets than she would have been if she had to deal with a trustee who had discretion concerning much of the trust assets. I recall there was an aunt who insisted that a 19 year old girl had no business having no supervision etc. I think that trust arrangement would have mainstreamed her more. I doubt a trustee in the 1980s would go for financing a single girl moving out of the country and doing the boat purchase and charter business.</p>
<p>The female was just starting her 3rd year of college at the time of her parents death. I seem to recall she dropped out of her sorority and moved into her own apartment. I would be guessing whether this indicated she had been in it for her parent(s) sake. I do know that she did finish college but used the AP scores to get out at the end of that third year which approximately coincided with getting the parents estate probated and the buyout with her brother completed. </p>
<p>The male got to make decisions as what was best for him in regard to those apartment assets (and there were other assets that both got). I personally believe that he wold not have been able to achieve the level of financial success if he had an allowance to deal with rather than the assets.</p>
<p>I have experienced as well as read of problems with long term trusts. Ones controlled by non-institutional trustees do sometime have personality conflicts, mismanagement and looting problems. Think how much you would like to have someone else tell you what they think of your life style and requests when they are doling out your money even as late as in your 30s. I have been more closely involved in the issue of institutional mismanagement of trusts and the enormous fees that can be charged by those institutions. And, there still is the control issues. </p>
<p>Considering the conservative nature of a lot of these institutions and the volatile nature of the economics of the assets involved, I think he was much more successful that the trust department would have been in increasing the values of the existing assets and using them over the years to make different and additional acquisitions etc.</p>
<p>What is the worst thing that can happen when there is no trust? The money is lost. Well most people dont have this kind of moeny to start with. So, whats the big deal if they have to live like most people?</p>
<p>BTW-- I do not think that “better safe than sorry” applies to every situation. I know that “you learn from experience” has equal validity although neither is true all the time. Regardless of the amount of money, it is just money. If you protect them until 35 or older, what makes it more likely that they still will not "blow it’? If the goal is to protect the money whyt give it to them at all?</p>
<p>When my Fa in law passed away, his estate was divided amongst his 3 children. My DH and his sister are good at financial management. They invested it, gave some away or used it for some necessities (SIL was very generous with her donation). The third sibling cannot manage $. Never has, never will. 2 1/2 years later, he has spent, from what we are told, 96% of the inheritance. We only wish that his portion had been doled out in increments.</p>
<p>It sounds like your family has been affluent for at least 2 generations. I think many will have a hard time relating where that hasnt been the case. I’ve found that there’s a tremendous difference in how you view money and inheritance based on whether money has been an issue in your life or not. Most who have struggled to save money to educate heir kids can’t imagine turning over what remains. They need it to retire or pay off the mortgage. Is the bottom line that you and DH are fine no matter where the excess college funds end up?</p>
<p>If your post is directed to me, Waverly, I would not say “affluent” applies. Fa in law had done a good job of saving/investing. He was career military and then civil service, so had 2 pensions, and lived 'til a ripe old age and lived very modestly. So when he passed away 2 1/2 yrs ago there was a nestegg, but no one had been living “affluently”. We have earned all the $ that we have saved up for the kids colleges, so yes, maybe that why I am so hesitant to turn dS’S over, lock, stock and barrel.</p>
<p>What defines “fine”? We are not counting the $ going to DS as in our retirement plan, but we have to still work to continue to build our retiremnt account. I anticipate that SIL may need our help as her health declines (she never married and has no kids). BIL will always ask for $$, and 2 of his kids, sadly will probably not live completely independently (long story) and he has not saved for their needs. Isnt really our problem, but I anticipate it could easily be.</p>
<p>Jym, I grew up with wealth as did my first husband. My second, who did not, has been my greatest influencer in how I treat money where my kids are concerned. I think for many that had money come easily, it seems normal to give their kids too much. This doesn’t sound like your case, but it was almost mine (and my children’s).</p>
<p>That is really interesting, waverly. I grew up in a typical middle class family. Not wealthy, but not poor. But investments and savings were always important to my family and we talked about it a lot.</p>
<p>I think many of us grew up in roughly middle class backgrounds and are hesitant to give too much cash to young people if we do not believe they will spend/invest it wisely. Yes, they COULD blow through it and perhaps expect that another windfall will be conferred and we would have nothing left to show for it, even if we want to help dig them out of a mess/hole. </p>
<p>It’s always hard to figure out how to deal with people whose values on money/investments/spending are very different from our own, especially people who may later be trying to get money FROM us.</p>
<p>Ah…wait till your children bring that “people” into the family through marriage. It’s already hard dealing with your children whom you’ve raised, now you have to deal with a person whom someone else has raised.</p>
<p>Perhaps by that old age of 35, that there will be a spouse, a house, a job. and kids? The wife will certainly have a say how that money will be spent. [In my dreams]</p>
<p>Oh really the frugal female spouse comes to the rescue? Not necessarily a universal experience or truth. At least not whenI had a bankruptcy practice.</p>
<p>When the money comes in at 35-ish that is just about time for (and can fund) the mid-life crisis. If there is a couple and they have deferred thing waiting on the money, poof. </p>
<p>In one divorce I was involved in on appeal, the evidence was that the wife convinced the husband to use a large chunk of the trust payout to him to have body work on herself. Then she bailed on the marriage. The male tried to argue that he should get a reimbursement for the value of the augmentations for the life of the female. It was interesting to see the theories/proof for valuing this.</p>
<p>Had “The money talk” tonight over dinner. Actually, it consisted of a spread sheet, a checkbook, a laptop and his savings bonds. Only real change, as we had discussed before he got home, was that he wants to essentially close the on-line savings account (that I share with him) and move that money to his USAA investment account. DH will still stay attached to his investment account so (a) DH can manage it with him and (b) DS can benefit from a higher level of services at USAA. DS understands that he will assume responsibility for his auto insurance upon graduation. He will be leaving the savings bonds here- untouched. We calculated their current value (and made me realize I wish I’d bought more I bonds – that thing is paying 8% interest!!). </p>
<p>We also ran a calculator program on line that lets him figure out what his take-home pay should be after federal and state taxes. He still can only do a vague estimated budget at this point, but he hopes to live pretty modestly. It was a good conversation. We calculated the “allowance” out to graduation (which he will keep more liquid), we/he deducted it from the savings and then calculated the balance left for him in investments. He will leave a small amount in the online savings account (at least until we get this year’s 1099) and… the apron strings have been cut. Very weird feeling.</p>
<p>Did you read that I found a $11,000 error in his investment account? He screwed up 20 months ago, and has been paying interest since then. That account used to be the UGMA account with me as custodian. He’s 26. I only discovered the error when I was looking over his shoulder at his screen (he hates that). </p>
<p>Luckily he had some vacation days, and nothing to do in Seattle.</p>
<p>He needs a woman to watch these things (other than his mother).</p>
<p>2boys,
Nope. Did not address a “consequence” as DH feels he (DS) is responsible and it is his choice now (I dont totally agree, but I kept quiet-- not an easy skill for me). DH in fact encouraged DS to look into doing a little post graduation travel before he starts his job. Also DS is looking into a spring break trip with friends. DS is well aware that he will have upcoming expenses when he moves and starts his new job (deposits, furniture, etc) and he is considering living with some college friends who have not yet secured employment. I chose not to push that issue, other than to mention that they have to qualify for the lease. I think its premature to bring that up, and I do tend to get ahead of myself. My bigger concern right now is that he is thinking of starting to do a little part time work for his new company during his last semester, but to do it it means he may have to drop a class that will then mean he has sacrificed earning a minor (he needs this one class for the minor). I would prefer he keep the minor as it may give him more flexibility in job opportunities down the road (he doesnt agree). Its too bad they wont let him take a test to exempt the class (its a statistics clas) but, nope.</p>
<p>When I turned 18, I had a regular savings account and a mutual fund in a minor, gift based account. My grandmother gave me the money when I was 3 for the purpose of college. I quickly reclassified both accounts to kick off my parents. The mutual fund was spent for college. The savings account I transferred into a money market, and it became the basis for my lifetime cash savings. When I went to college, I opened a checking account and gave my parents check cashing privileges. </p>
<p>I don’t know how many 18-22 year olds have the discipline to use all the money correctly. You have to judge appropriately, but you have to let go. If you have taught good fiscal responsibility, you don’t have much to worry about. I had a good idea what I was doing, but I think I was in the minority.</p>