{"id":853799,"date":"2026-09-20T00:54:21","date_gmt":"2026-09-20T00:54:21","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/853799\/"},"modified":"2026-09-20T00:54:21","modified_gmt":"2026-09-20T00:54:21","slug":"mom-plans-to-give-brother-early-inheritance-for-his-3-kids-college-childfree-sibling-says-its-not-fair","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/853799\/","title":{"rendered":"Mom plans to give brother early inheritance for his 3 kids’ college \u2014 childfree sibling says it’s not fair"},"content":{"rendered":"

\"Stressed<\/a> shutterstock.com <\/p>\n

An inheritance can stir up a lot of family drama, especially when one sibling feels that another is getting special treatment. <\/p>\n

That’s the case for Sue, whose 80-year-old mother wants to give Sue’s younger brother, Trevor, part of his inheritance early to cover college costs for his three children. <\/p>\n

Must Read <\/p>\n

Trevor has never been particularly good with money and hasn’t put away much, if anything, for his kids’ education or his own retirement. He also tends to mismanage his money and, on a few occasions, has asked for handouts from his big sister<\/a> and his mother. <\/p>\n

Sue, on the other hand, is married but doesn’t have any children. She’s always played by the rules \u2014 budgeting, saving and investing her money to ensure she has a comfortable life and retirement. <\/p>\n

While Sue doesn’t want to upset her mother, she feels like she’s being penalized for being child-free \u2014 and for being the ‘responsible’ child. What are her options? <\/p>\n

Fair doesn’t always mean equal <\/p>\n

While Sue isn’t opposed to the idea of supporting her nephew and two nieces with their post-secondary education, she feels it’s unfair that her brother gets an early inheritance<\/a> and she doesn’t \u2014 because she’s child-free. <\/p>\n

But unequal inheritances are more common than one might realize. More than one-third (35%) of parents over 50 plan to divide their estate unequally<\/a> among their children, according to research from the University of Michigan’s Health and Retirement Study. <\/p>\n

This typically isn’t because one child is favored over another. Maybe one child has a greater financial need, or maybe one child has already received support (such as money for a down payment on a house). Or, maybe one child helped out with caregiving duties significantly more than another. <\/p>\n

In these cases, a parent or parents may feel that an even split may not be a ‘fair’ split. <\/p>\n

One way to ease some of the tension is if Sue’s mother deducts Trevor’s early inheritance from his share of the estate, so they still get an equal share \u2014 only Sue will have to wait for hers until her mother passes. <\/p>\n

Or, Sue could suggest that her mother give her an early inheritance, too \u2014 but in Sue’s case, since she’s child-free, she could use that money to invest for her own retirement. But her mother may say no to that. <\/p>\n

Story Continues <\/p>\n

It can be a hard pill to swallow, but ultimately it’s her mother’s money and she can do what she wants with it. <\/p>\n

It may give her mother a great sense of joy to help out her grandchildren. Nor should her grandchildren have to suffer because their father is irresponsible with money. <\/p>\n

The average annual cost of college in the U.S. is $39,406<\/a>, including tuition, books, supplies and living expenses \u2014 more than double what it was at the turn of the century, according to the Education Data Initiative (based on the latest available data from the 2023-2024 academic year). <\/p>\n

While the cost for a student attending an in-state, public, four-year institution and living on-campus was, on average, $28,349 per year, a student attending a private, nonprofit university paid an average of $60,924 per year \u2014 with a hefty $39,408 of that going toward tuition and fees. <\/p>\n

“Considering student loan interest and lost potential income, investing in a bachelor’s degree can ultimately cost upwards of $500,000,” according to the Education Data Initiative. The average undergrad borrower spends the next 17.5 years paying off their student debt. <\/p>\n

Helping a child cover their education costs<\/a> \u2014 even partial costs \u2014 can give them a significant leg up on life. <\/p>\n

Read More: Vanguard reveals what’s coming for U.S. stocks \u2014 and it could be bad news for this group of investors<\/a> <\/p>\n

529 plan or trust? <\/p>\n

Sue is also worried that her brother will mismanage those funds (and some of it may end up in his own pocket). So she could suggest that her mother set up either a 529 plan or a trust for the grandkids. <\/p>\n

A 529 plan is a state-sponsored<\/a> college tuition account. Earnings grow tax-free, and withdrawals are tax-free for qualifying expenses such as tuition, books, supplies and room and board. The rules and tax benefits vary by state, so you’ll want to check into the specific details of your home state plan. <\/p>\n

The advantage of a 529 plan is that it won’t count against Sue’s nephew and nieces if they need to apply for financial aid. Previously, distributions from a 529 plan were considered student income, which could affect how much aid they could apply for. But that’s no longer the case. <\/p>\n

The disadvantage of a 529 plan? There’s a 10% penalty<\/a> if the funds are withdrawn for non-qualified expenses and they’d be taxed as ordinary income. <\/p>\n

For 2026, contributions of up to $19,000 per year<\/a>, per beneficiary (or $38,000 for married couples) aren’t subject to the federal gift tax. You can also front-load a 529 plan, known as ‘accelerated gifting,’ which means giving five years of annual gifts at once, for a total of $95,000 per beneficiary (or $190,000 for married couples). <\/p>\n

If one of the grandkids decides not to go to college, up to $35,000 of a 529 plan can be rolled into a Roth IRA <\/a>without a tax penalty. But there are a few caveats: for example, annual conversions can’t exceed the beneficiary’s earned income for the year or Roth IRA contribution limits. Or Sue’s mother could change the beneficiary to another relative. The 529 must also have been open for at least 15 years in order to roll over. <\/p>\n

An irrevocable trust<\/a>, on the other hand, means the money could be used for expenses other than education. It could also help shield assets from creditors, if that were a potential issue. But a trust doesn’t come cheap \u2014 it comes with significant legal and admin costs, and investment income is subject to federal income tax. <\/p>\n

It may make sense for Sue’s mother to consult a financial advisor who can walk her through the options \u2014 and provide an objective point of view. <\/p>\n

What To Read Next <\/p>\n

Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now<\/a>. <\/p>\n

This article originally appeared on Moneywise.com<\/a> under the title: Mom plans to give brother early inheritance for his 3 kids’ college \u2014 childfree sibling says it’s not fair<\/a> <\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind. <\/p>\n","protected":false},"excerpt":{"rendered":"shutterstock.com An inheritance can stir up a lot of family drama, especially when one sibling feels that another…\n","protected":false},"author":2,"featured_media":853800,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,155,2065,147,530,54442,250572],"class_list":["post-853799","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-dave-ramsey","tag-inheritance","tag-personal-finance","tag-personalfinance","tag-sue","tag-younger-brother"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/853799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=853799"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/853799\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/853800"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=853799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=853799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=853799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}