More people are dealing with financial disparity amongst siblings.
Yes. A lot of middle-aged adults are familiar with the “sandwich generation” conundrum—partially supporting both their kids and their parents, but what about when the turkey in the sandwich wants some cheese? In addition to getting hit up from the younger and older generations, some people find themselves managing financial requests from siblings.
Experts say that the struggling economy has led to more brotherly/sisterly loan requests in the baby boomer generation. Lost jobs, housing troubles and divorce are all hitting just as boomers’ prime earnings years are coming to a close.
Of course, we all know the old adage, “charity starts at home,” and many of us are more than happy to help a brother or sister in need. But what is reasonable? And how do you set limits and boundaries so you don’t feel your sibling is taking advantage of you? The trick is to manage expectations on both sides to avoid frustration and resentment. Money gets complicated when it gets emotional.
Can you offer some basic guidelines when dealing with a request for financial assistance from a sibling?
Absolutely. First of all, if you don’t want to assist your sibling or feel you are not in a position to do so, simply be honest about it. A firm, “I’m sorry, but no” is hard to argue with. And never lend more money than you are comfortable losing. You need to protect your own financial well being first. Never sacrifice your retirement.
If you do wish to help, the first rule is to be clear. A cash gift is just that—a gift. Unless you specify exactly what that money should pay for, you cannot expect to control how it is spent, so that means you have to keep it to yourself when your sister goes to the Bahamas on your dime. A loan is a different matter. A small loan is less likely to be repaid and you might as well consider it a gift or ask for a favor from your sibling in return. Maybe they can help you with a household project.
What about larger sums of money?
When it comes to more substantial loans, a pinky swear is not going to cut it. Always put an agreement in writing, for everyone’s protection. If you have a written record that specifies amounts and dates, you will be less likely to face issues in the future. Be clear and professional. Siblings know exactly how to push our buttons, and a black and white business agreement helps everyone resist the urge to make passive aggressive or sideways comments. The last thing you need is a conversation about money that devolves to name-calling and the airing of decades-old resentments.
You can outsource the “nag factor” as well. There are a handful of lending firms that have helped facilitate hundreds of millions of dollars’ worth of deals between family, friends and even strangers who want to pay lower interest rates. One example, National Family Mortgage, says its sibling-to-sibling refinance deals have more than doubled since 2009. This type of peer-to-peer company provides paperwork and loan scheduling and helps lenders formalize the deal, avoid bank fees and sidestep potential gift-tax pitfalls.
The limit is $13,000 per donee for 2012, so if your brother has a wife and kids, you could give him more without triggering the gift tax, as you could give $13,000 to each individual. And if you are married, double that, as you and your spouse can give each person $26,000.
What if you’re financially comfortable and you want to help a sibling—for instance, with their child’s education—but they are resistant to accepting it?
All you can do is offer. Write a nice letter (so the offer is on the record) saying how much pleasure it would give you to contribute to little Suzie’s education. Mail it, and then let it go. One benefit of your generosity: If you pay the tuition directly to the institution, the gift tax is not applicable. The same goes for medical expenses paid directly to health care providers.
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This Week’s Celebrity Instagrams (10/7-10/14)
25 photos Launch gallery
1. Nite | to the tune of @cnn 😞
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2. Got so much work to do but I just wanna stay in bed and binge watch #Gameofthrones and start the new season of #OnceUponATime. I know I can't be the only one. Right? Ha 💤🦁🍂 #saturday
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3. Mommy's weekend turn up ❤️👶🏾💕🍼 Wouldn't trade it for nothing. #TeamNoSleep lol #HesMyBiggestBlessing ✨
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4. One of them oh shit mont we made it feelings … this shit still be unreal 💯💪🏾 @remyboymonty1738
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5. Tickets Available October 14 @ticketmaster.
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6. People magazine Home edition has raided my house! Get a sneak peek into the bedroom life of the Leakes and see other parts of my home now at PEOPLE.COM
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7. They want to kick you when you down, but kick it when you up
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8. Got my advance copy of #Mafia3 at @gamestop. Get yours via link in the bio #Mafia3 #Ad
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9. This is some of the cast and our diverse team of writers in the writer's room creating funny sh*t for @nbcmarlon what a fun room! Lots of jokes, great stories and having a great time doing what we love... making people laugh and feel something. Look out for our show next year @nbcmarlon we bringing sitcoms back to NBC
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10. #HappySunday☀️Thank you @4everbrandy101 💛💡💛
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11. Happy to be back in Central Falls, RI breaking ground for the One Stop Health Center and hosting a local community event with #Vaseline.
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12. Thank you all in advance 💋💋💋 #Repost @urbansvintage・・・#TarajiPHenson's memoir #AroundTheWayGirl will be available everywhere TODAY October 11th! Will you be purchasing a copy? #UrbansVintage
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13. Moms got my back
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14. @galore dinner party glo ✨ thanks to @styledbygiigii
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15. 🌹#ThisIsWhatTheTruthFeelsLikeTOUR #forevereve
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16. Yes, all those videos I've been posting have led to this: the introduction of skincare to @TYRABeauty! This is the rundown on the new line:Years of research and beauty tips I live by led me to produce the most effective and delightful skincare out there. I'm all about taking really good care of my skin, so I can look like I'm aging in #TyraYears and go filter free on Instagram when I feel like it! Now, it's your turn. ✨My Mama always told me not to wash my face with just my hands. "Tyra, girl, you're just moving the dirt around!" And I've listened. First up is The Clean Machine.... ...a 3-in-1 foaming face wash that cleanses, removes makeup and purified your skin. It has patented technology - a attached Turbo Cleansing Tool - to give you that deep clean that makes your skin feel super fresh. Wanna know more? Yeah, baby. Click that link in my bio.
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17. On set of #beingmaryjane like... ❤️😬💃🏾
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18. #carouselofhope@yvetteshelton100@makeupbylatrice @thestacetheface@marialuciahohan24
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19. I refuse to let a little cold stop me from my daily routines to greatness. #onlythestrongsurvive #warriors
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20. Big things begin with big THINKING... #BusinessEthics #SetLife 🎥
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21. Goodnight - here's a song
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22. Words can't explain the feeling that I have right now.....God is good. look momma I made it. #Harts #Blessed #WhatNow #comedicrockstarshit #4DaysAway
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23. I tried to get a better video with out the nasty bib but she started getting mad at me..lol! Big cuz @the_queen_caitlin trying to show her what to do. #MamasToots #HeirBear👑💜
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24. Gorgeous Serena joined Beyoncé in Formation last night on stage in New Jersey!!!
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25. 😜 @lifeofdesiigner & @rockohill
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