‘I am watching my inheritance evaporate’: My brother and sister constantly hit our parents up for money. What can I do to stop this?

My brother lives in New York City, and he is always in need of money. His finances are unstable, and he has a child and a high-maintenance wife. My sister is in an unstable marriage and often needs help. My parents have had to help them both substantially over the years. 

I am concerned that my siblings see my parents as an endless source of money and that there will be nothing left. While I certainly do not feel averse to helping my brother and sister out in times of need, I feel that I am watching my inheritance evaporate before my eyes. 

I am on good terms with them now, but I wonder what will happen when my parents pass. 

Concerned Son

Dear Concerned,

An inheritance is only an inheritance when it lands in your bank account. 

Let’s start with the good news. You are financially independent, you have your own home and you live within your means. You can also make sure you contribute to a retirement account such as a 401(k), automate your savings, try to avoid spending more than 30% of your income on housing, and allocate 20% of your income for your “wants” while putting 30% toward your financial goals.

There are also some other financial issues you can focus on, which should help take your mind off your siblings. Make sure you have an emergency fund with at least six months’ worth — or ideally, a full year’s worth — of expenses. Keep track of your monthly expenditures, and pay off your credit card every month. You never know when a recession, job loss or a medical expense could take a bite out of your finances.

Next, turn your attention to the stock market and the miracle of compound interest: That’s when you earn money on your initial investment — and money on your investment’s return. It takes time, but let’s assume that you, at age 46, have 20-plus years until your retirement. Investing now in a bearish stock market should reap long-term rewards.

You appear to be in a much stronger position than your brother and sister. You’re one of the lucky ones. The share of workers who say they are living paycheck to paycheck has surged among middle- and high-income earners — to 63% and 49%, respectively, up from 57% and 38% a year ago, according to this survey of almost 3,600 workers released last year. 

You are always free to express your concerns to your parents, to ask them if they feel they’re being put under any undue pressure and to suggest that they take any money they have given to your siblings into account in their will. But don’t expect them to welcome that conversation. Try to let go of any preferred outcome. It’s their money, their kids, their decision. 

Other topics you might want to discuss with your parents include retirement, medical expenses and 529 savings accounts for grandchildren. The median cost of adult daycare in the U.S. was $1,690 a month in 2021, and for an assisted-living facility that cost was $4,450, according to insurance company Genworth Financial Inc. GNW, -4.22%. The U.S. Department of Health and Human Services says that 7 out of 10 people will require long-term care in their lifetime.

As MarketWatch investing columnist Beth Pinsker recently pointed out, the floodgates are now officially open for grandparents to supersize college savings, as new financial-aid rules erase penalties for giving money to grandchildren. “New investing opportunities are open for family members to help out without hurting financial aid,” she wrote.

Your parents may also wish to set up a revocable trust so they can retitle their home, bank and investment accounts in the name of the trust. There are many different kinds of trusts: A special-needs trust can help provide for a disabled family member for the rest for their life, while a charitable trust allows your parents to leave a specified amount of money to their favorite charity.

The takeaway: Take care of your own finances and spend less time worrying about other people’s. Take the time to ask your parents how you can help. And remember that your parents worked hard for their money. While some of your siblings’ predicaments may be self-inflicted, it’s ultimately up to your parents to decide whether or not they want to help and how much to give.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

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