One of the risks in putting money into your child’s name is when he gets older and the money becomes his, you no longer have control over it. That is what one reader has found out and wants to know if there are any options that she has:
I have been placing money into a fund for my child since just after he was born. It has amassed to be a good amount of money during that time and is now worth six figures. When he turns 21, he will legally have access to this money. The problem is, he is not financially savvy and while this money was meant to help him buy a house, I’m afraid he will squander it on useless things.
My question is, would I be ethically wrong to not tell him about the money until he is older? I have not told him about it so he doesn’t know that this fund exists at this time. Even though the fund will transfer to his name, am I required to tell him that it exists? If I do have to tell him, is there anything that I can do in an attempt to keep him from spending the money unwisely? Any thoughts or information would be greatly appreciated.
What advice would you give in this situation? If you were in a similar circumstances, what steps would you take to minimize the perceived damage that you thought would occur?