My sister will be inheriting around $100,000 and wants me to hold onto it for her since she struggles with addiction and doesn’t trust herself with the funds. Besides the potential stress of setting boundaries, can anyone think of other downsides?
Ideally, I’d put it somewhere low-risk with a bit of interest, so when she’s ready, she’d have a bit extra to help her get started. Whether that’s in 2 years or 5, I’m okay with waiting. Apologies if this sounds a bit naive— I’m not very experienced with investing.
A legal trust agreement could protect both of you. It would lay out how the money is managed. I’m not a lawyer, so I’d recommend consulting a trust lawyer. Just be aware there may be costs, especially since trust tax returns would need to be filed every year.
Darren said:
A simple option would be a 5-year GIC. It would keep the money inaccessible for 5 years, giving you a reason to not release it early.
It’s better if she buys the GIC. If OP buys it, she might want the money mid-term, and OP could get into a dispute about penalties. A trust lawyer would be needed if OP manages it.
Fin said: @Flor
Addiction is a lifelong vulnerability. It’s not about a set timeline but managing susceptibility. Recovery can’t be forced into a schedule.
My point is that OP shouldn’t be burdened forever. If she isn’t ready after 5 years, then maybe it’s time for her to handle her own finances. Addiction is ultimately her challenge, and OP can’t be expected to hold the responsibility indefinitely.
Fin said: @Flor
Addiction is a lifelong vulnerability. It’s not about a set timeline but managing susceptibility. Recovery can’t be forced into a schedule.
Not all addicts remain addicts forever. Recovery can mean no longer being actively addicted. For example, a former smoker is no longer addicted once the craving is gone. Addiction isn’t always a permanent state.
Constantly identifying as an addict can be limiting. Approaches like SMART Recovery focus on changing behaviors rather than an unchangeable identity, which can encourage personal growth and break the cycle of dependency.
I’d suggest making sure it’s all in her name, maybe in a GIC that’s locked for a certain period. That way, you’re not in a position to release funds early, which could avoid lots of conflict.
