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Bonnie
Bonnie, Psychologist
Category: Parenting
Satisfied Customers: 2180
Experience:  and pediatric nurse practitioner with 30 years of experience counseling parents.
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What are the dangers of giving teens too much money as teens,

Resolved Question:

What are the dangers of giving teens too much money as teens, as in an inheritance. Example $1M each.

Grandparents want to see our kids enjoy this money before they pass and encourage kids to forgive them, their absence from their lives.
Submitted: 3 years ago.
Category: Parenting
Expert:  Bonnie replied 3 years ago.
The dangers are that they will squander it away. What is wrong with a trust that will pay for their college education and their first house. Give them a small amount to watch them spend and this will be evidence of their good judgment but wouldn't grandparents rather know that children's whole life will be changed by the opportunity to attend college of their choice all expenses paid.
Customer: replied 3 years ago.
Thanks, XXXXX XXXXX is only one danger. Are you aware of any site or place that we could get some real information with documentation and details. Anyway, our kids schooling is already paid for in full and they aren't the sort to squander money. Certainly not a million dollars.
Expert:  Bonnie replied 3 years ago.
I have never heard of hard research on these dangers. It is just that if it is an improved relationship the grandparents want then why not spend time with the children to establish one. It is not the money they need, is it? It is fond memories of their grandparents. Spend the money with them or on them instead of giving it to them to watch them spend.

Anyway, what are the tax implications of such a large gift?.

Edited by Bonnie on 11/17/2010 at 3:45 AM EST
Customer: replied 3 years ago.
Yes, we know this. This seems rather logical without much knowledge to arrive here. However, the grandparents need some hard evidence and we were hoping that this is what you could provide us with. Or somewhere to get this sort of factual information.
Expert:  Bonnie replied 3 years ago.
Well, I think evidence would only be anecdotal and one would need to look at situation where teens have had access to large amounts of money to spend as they wish. Teens who already have a sense of being immortal may use poor judgment and become involved with addictions of some sort (games, drugs, etc.). If there were no boundaries on their choices, how can they be kept safe from these temptations. They are not of a developmental age where they can be responsible for this amount.

Now, if you are going to say, but they are responsible, use good judgment and are intellectually more like adults, then, it is hard to come up with reasons why they should not manage $1M and learn how to invest and make another million doing it.

Customer: replied 3 years ago.
Again, your reasons are sound. We have come up with them ourselves and more. What we are asking of you, rather than trying to come up with more ideas without evidence, is to give us solid evidence of this or a place where we can find that sort of research ourselves, as we haven't been successful there.
Expert:  Bonnie replied 3 years ago.
I'm really struggling here. Trouble is there just is no research or outcome data of teens who inherit $1M or any variation thereof. So no evidence-based information was found by me either. So here's what I would suggest.

http://www.childdevelopmentinfo.com/development/teens_stages.shtml

Take this information, and point by point, discuss how having $1M in the bank might interfere with the developmental steps that a healthy adolescent should take in order to become a healthy and productive adult. Having that money there, might influence their decision making regarding these upcoming choices. Hopefully grandparents had to work their way up and were not handed the money. Then appeal to his sense of industry as a teen and how having money in the bank would may have thwarted his growth.

Anyway, this has been a very challenging and interesting question. Thank you.
Bonnie, Psychologist
Category: Parenting
Satisfied Customers: 2180
Experience: and pediatric nurse practitioner with 30 years of experience counseling parents.
Bonnie and other Parenting Specialists are ready to help you
Customer: replied 3 years ago.
It was a tough question as far as finding "hard evidence" over what is simply logical. Thank you for making the effort however. Although the site doesn't have what I wanted, it is an interesting site.

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