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.
Also On Black America Web:
This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
1 of 30
2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
2 of 30
3. Vegan! The Impossible burger at Crossroads
3 of 30
4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
4 of 30
5. Jus haaaanngin out
5 of 30
6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
6 of 30
7. No limits... Photo cred: Chris Bridges @ludacris
7 of 30
8. new new
8 of 30
9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
9 of 30
10. hey ma! 🎎#wcw 💙
10 of 30
11. Surprise visit to our factories!!! #GoodAmerican #USA
11 of 30
12 of 30
13. Peachy Keen 🔥✨⚡️
13 of 30
14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
14 of 30
15. Late nights @nbcmarlon with the writers... we in here!!!
15 of 30
16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
16 of 30
17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
17 of 30
18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
18 of 30
19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
19 of 30
20. #BrotherlyLove #tbt
20 of 30
21 of 30
22. #basel #TeamLOVE @kingcombs
22 of 30
23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
23 of 30
24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
24 of 30
25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
25 of 30
26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
26 of 30
27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
27 of 30
28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
28 of 30
29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
29 of 30
30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
30 of 30