‘My brother refuses to work and he owes me $50,000’ — I want him to pay me back, so should I help him purchase a home?

Dear Moneyist,

My brother refuses to work and will now inherit his late girlfriend’s estate with whom he resided for many years and for whom he is the only designated heir. He has not held down a job in years. He will receive a home and car, amounting to perhaps $500,000 in total value.

I have agreed to fund his short-term needs with a periodic transfers to his accounts, which he depends on for daily survival — rent, food, and so on. In addition, there is a balance owing for previous such arrangements, to the tune of $50,000.

Also see: ‘My husband’s kids hate me and refused to come to our wedding, yet he is leaving them all his property.’ How can I negotiate to secure my future?

Is there a legal mechanism whereby I can purchase a home for him and his new — much younger — wife, where they can live in peace and harmony, which provides legal tax benefits to me and my family? Should I purchase him a home? If so, how?

For various reasons that are sufficient to me, I do not wish to simply gift this money to him with no material benefit to myself and/or my family. I am willing to seek legal advice, but I thought it best to put some guidelines in place first.

Hal

Dear Hal,

You have a lot invested in him: $50,000 and, it seems, not a small amount of love.

He must have a good deal of charm to inherit $500,000 and lean on his brother for financial support. You don’t say why he doesn’t work. It may be not in his nature to hold down a nine-to-five job — perhaps he was destined to be a man of leisure — or perhaps he has had other personal issues.

Lady Luck has shone upon him thrice: a generous benefactor, a new wife and a trusting brother. Most siblings would see this half-a-million bucks as an opportunity for him to stand on his own two feet. He is in no position to get a mortgage and you can afford to help him, but I still urge caution.

No one — least of all his new wife — wants him to burn through his small fortune to the point where he ends up back where he started. And one could argue that it’s an opportunity for you to make an investment, assuming you believe this is a good time to buy. (Others might disagree with that.)

Also see: As a baby boomer, I didn’t grow up with this culture of entitlement — do I have to leave my estate to my children or spouse?

You may feel like you’re in for a $50,000 so you’re in for a pound, but be careful about indulging your brother and enabling him. You sound like a caring man, but this also has many of the hallmarks of a co-dependent relationship. He is responsible for paying his debt. You are not responsible for him.

I would not offer him a home without some conditions attached. If ever a gift were destined to come with strings, this is the time. Could he go to college and/or learn a trade? What investments could he make with, say, $100,000 of his inheritance? I’m not talking about betting it on the horses.

It’s a good time to find work. A 10-year-long bull market, rising corporate profits and economic growth, despite predictions of a recession, have led to a stronger labor market: The Dow Jones Industrial Average












DJIA, -0.42%










 is up 22.7% this year; the S&P 500












SPX, -0.28%










 is up 29.2%.

Recommended: ‘What did he do with all the money?’ My dying husband cashed his $700K life insurance and emptied his bank accounts

You could put a house in a qualified personal residence trust that would go to your children, but where your brother can live with his new bride — as long as he sticks to whatever agreement you hash out (paying his $50,000 debt to you should be No. 1 on that list).