Finally had "the talk" with- difficult child, not the outcome I expected, neither good nor bad

[toughlovin]

I hadn't thought about him withdrawing and the funds going to him..... I wonder if there is a way to actually pay the school via a credit card and then if he withdraws having the funds go back on the credit card? You would have to check with the school for that.

The more I think about it the more I think he is not going to school.... I just can't fathom why he would not have you pay tuition.

At this point I don't think there is anything you can do except hang tight and wait until something else happens.

Hugs.... that waiting until something happens is an awful place to be.

TL

 

[DaisyFace]

no real strings attached other than pass your classes, go full time, graduate on time.

We started by explaining that we needed to be "in the know" with his comings and goings and we needed him home on time. No big deal. We proceeded to ask about school...

I think this is the key portion of the agreement right here...

How many of our difficult children would do anything in the world NOT to have their parents "in the know" ? They'd rather jeopardize their future, their security, their very lives - rather than conform to expectations.

And you know what? He's an adult now...and that is his choice to make.

He doen't want your money if it means he has to have open, honest communication with you. Rather than trying to figure out alternate ways of foisting the tuition on him - I think you should let your terms stand. You've made an extremely generous offer...and if he's too bull-headed to accept it - that's HIS issue...not yours.

 

[DDD]

Just wanted to add that I know how you feel about the lost connection. To me that has been the most painful part of having a difficult child. We have always been close sharing spontaneous moments, similar humor, and adult/adult conversations of substance as well. Now...there are parts of his life that are secret and I "know" include activities that are not sharable. The same guy who is awesome company can zone out and become a stranger that I know is not someone I would willingly want to be around too often. I did not anticipate that...sigh...and I'm sure you didn't either. Hugs. DDD

 

[Nancy]

I'm thinking on the same lines as DaisyFace. Paying his tuition is not going too stop him from doing whatever it is he is doing that causes concern. If he really is going to college and he succeeds in completing his education without getting into trouble you can give him the money as a graduation present. If anything close to what you suspect he is doing happens, he may need that money for legal fees, so you are just keeping it safe for him.

Honestly his refusing to take your money does not make you a bad parent, and trying to force him to take it will only make him more determined not to. He has something up his sleeve and it looks like you will just have to wait it out. I told my difficult child many times that we always find out what she's up to, one way or another. I had to pay my own way through college and I still loved my parents just as much when I finished. I credit that experience with teaching me responsibility. Of course I made my money the legal way, and perhaps he is too. I think it's the not knowing what's going on thing that is the worst right now.

Nancy

 

[Nancy]

I had another thought and I don't want to add to your worry, but at the colleges around here, selling fake IDs is a big money maker for some enterprising students. There is a ready market for them in the underage students fresh from high school. It is all done over the computer, they collect students pictures and bio info and order the IDs from Hong Kong (probably other countries too but that seems to be the route here) and in a few weeks IDs are shipped to the middleman student in a brown manilla envelope. Problem is customs is now watching very closely and so they are finding new ways to send them in, the heel of a new pair of shoes, etc. The enterprising young marketers make thousands on every shipment. The IDs look absolutely real and usually pass for the authentic thing.

We have known several families who found themselves involved in this kind of activity when their college kids were finally arrested and charged with felonies. These are good familes and we were shocked at the young people that were involved, never suspecting they would be involved in that, but the money was too good to pass up.

This may not be anything he is involved in at all, but I never would have known about it until my friend's daughter was arrested. I then found out my difficult child ordered one thorugh another student at another college. They go anywhere from $250-$500 depending on whether you order one or two, in case the first one is lost or confiscated. I actually read a computer message between my difficult child and the seller that suggested she get two for that reason.

I found that I had to stay one step ahead of difficult child in finding out all the illegal activities she could be involved in. And it seems colleges are ripe with opportunities.

Nancy

 

[rejectedmom]

If he really is going to college and he succeeds in completing his education without getting into trouble you can give him the money as a graduation present. If anything close to what you suspect he is doing happens, he may need that money for legal fees, so you are just keeping it safe for him.
Nancy

I agree but also since he has refused, it you could rightfully use it for the other kids or even for a nice vacation for yourself and husband. Then when he decides wants it afterall (and he just might) the cold hard fact that he refused your generous offer and it is now off the table will hit him smack in the face...natural consequences.

 

[Nancy]

I was going to say that too RM, I would have no problem using it for other expenses.

Nancy

 

[Signorina]

My "issue" is that his college fund is a 529 plan, so I can't withdraw it for other reasons or use it myself etc. I can't even use it to pay his college loans or reimburse him for his tuition "some day".

His CD will be "his" when he turns 21 with or without my approval. So, I have a short window here to control it.

Best case scenario (for now of a crappy scenario overall) is that I agree to cash it to pay his tuition/related living expenses. Since it falls under UTMA (uniform transfer to minor) laws, if I cash it (and I think I am the only one who can cash it until he turns 21), I need proof that I used the money for his benefit. So, legally I would have to write the checks to the school, landlord etc. so there is documentation that I used it for his benefit.

My thoughts are that if I do so, there is nothing that prevents me from secretly (from him) withdrawing $4000 out of his college fund and using those funds to technically pay for his tuition. I can then take the cash from the CD and put it away "for his benefit" without him being any the wiser. I totally acknowledge that its a bad idea but it is the least bad option of the bad options that exist. It gives me the opportunity to free some of the money from his college fund and preserve the cash in the CD for someone's benefit - either a nest egg for him someday which was the intent of the CD, or money for rehab, or money to bedazzle a straight jacket for me some day...which is where this is heading.

If I refuse to cash it, in 15 months HE can cash it without my approval. And who the heck knows what he will be doing in 15 months? Let's face it - none of this ever dawned on us when the CD was purchased in 2006 or the college fund started in 2003. It makes me sick to my stomach. So this may be my last chance opportunity to control it somewhat and to emancipate some cash from his 529 plan.

I'd rather take the chance of losing 3500 to the university if he drops out than giving him $4000 in cash today or him cashing it out next year. As far as I can tell, tuition payment is due AFTER(2/17/2012) the drop date (2/3/2012.) And I can make it in two payments - so I can pay the first installment in good faith and if he does not prove to me that he is actually enrolled, I will skip the second payment due 3/16/2012. They will dun him for the second payment, but that won't be my problem.

I am thinking I will either put the $4000 in a trust account for him or buy savings bonds in his name and hide them in my safe deposit box. He won't need to know about either and it will be proof it was used for his benefit should the IRS come a knocking.

I am probably getting way ahead of myself here.

FWIW, I told H that my "online Al Anon/support group" unanimously suggested that difficult child has dropped out or is not going to classes. And it never dawned on him either. And he turned white. He never thought it either and he agrees it's the scenario that makes the most sense. Especially since he would have gotten his grades on 12/28 which coincides with the date he started staying out & his attitude changed.

I also gave him the money solutions my racing mind has come up with and he suggested we leave it alone until difficult child actually asks for the money again. Wise man.

Thanks for the cyber support - I feel like I woke up in someone else's life. I wish this was just a nightmare, it certainly feels like one.

 

[Kathy813]

So with a 529 plan you basically use it or lose it? Is so, then his refusing the money makes even less sense. There is something definitely funny going on here.

As far as your plan, it sounds good to me but make sure that you check and double check all of the legalities involved.

~Kathy

 

[Signorina]

Not use it or lose it - I can change the beneficiary to another child or I can withdraw it and pay the penalty and the taxes due. Or I could cash it out and give him the money - after I pay the taxes and penalty. It's kind of like an IRA for education. I am OK with letting it just sit there - but if I CAN withdraw the $4000 penalty free - I will take the opportunity to do so. The good news is that he can't touch it.

 

[rejectedmom]

I got this info off wikipedia

Use for qualified education expenses Money from a 529 plan can be used for tuition, fees, books, supplies and equipment required for study at any accredited college, university or vocational school in the United States and at some foreign universities.
The money can also be used for room and board, as long as the fund beneficiary is at least a half-time student. Off-campus housing costs are covered up to the allowance for room and board that the college includes in its cost of attendance for federal financial-aid purposes.
Qualified education expenses do not include student loans and student loan interest.
A distribution from a 529 plan that is not used for the above qualified educational expenses is subject to income tax and an additional 10% early-distribution penalty on the gains portion only unless one of the following conditions is satisfied:

• The designated beneficiary dies, and the distribution goes to another beneficiary or to the estate of the designated beneficiary.
• The designated beneficiary becomes disabled. A person is considered disabled if there is proof that he or she cannot do any substantial gainful activity because of a physical or mental condition. A physician must determine that the individual's condition can be expected to result in death or continue indefinitely.
• The designated beneficiary receives any of the following:
  • a qualified scholarship excludable from gross income
  • veterans' educational assistance
  • employer-provided educational assistance
  • any other nontaxable payments (other than gifts, bequests or inheritances) received for education expenses
  • Advantages There are many advantages to the 529 plan:
    First, although contributions are not deductible from the donor's federal income tax liability, many states provide state income tax deductions for all or part of the contributions of the donor. Beyond the potential state income tax deduction possibilities, a prime benefit of the 529 plan is that the principal grows tax-deferred and distributions for the beneficiary's college costs are exempt from tax.
    Second, the donor maintains control of the account. With few exceptions, the named beneficiary has no rights to the funds. Most plans even allow you to reclaim the funds for yourself any time you desire, no questions asked. However, if a "non-qualified" withdrawal is made, the earnings portion will be subject to income tax and an additional 10% penalty tax.
    Third, a 529 plan can provide a very easy hands-off way to save for college. Once one decides which 529 plan to use, one completes a simple enrollment form and makes a contribution (or signs up for automatic deposits). The ongoing investment of the account is handled by the plan, not by the donor. Plan assets are professionally managed either by the state treasurer's office or by an outside investment company hired as the program manager. The donor will not receive a Form 1099 to report taxable or nontaxable earnings until the year of the withdrawals. If an investment switch is desired, donors may change to a different option in a 529 savings program every year (program permitting) or the account may be rolled over to a different state's program provided no such rollover for the beneficiary has occurred in the prior 12 months. 529 plans generally have very low minimum start-up and contribution requirements. The fees, compared with other investment vehicles, are low, although this depends on the state administering the plan. Finally, everyone is eligible to take advantage of a 529 plan, and the amounts that can be put in are substantial (over $300,000 per beneficiary in many state plans). Generally, there are no income limitations or age restrictions.
    A final rather unusual advantage of the assets in a 529 plan is that although they can be reclaimed by the donor (subject to income tax and the 10% additional penalty on any gains) the assets are not counted as part of the donor's gross estate for estate tax purposes. Thus 529 plans can be used as an estate planning tool to move assets outside of one's estate while still retaining some measure of control if the money is needed in the future. A beneficiary must be designated and the income tax savings are still only obtained if the money is eventually spent for education, though in some cases estate taxes can be reduced without spending the money on education.
    [h=3]Transferable[/h]Another benefit associated with 529 Plans is the ability to transfer unused amounts to other qualified members of the beneficiary's family without incurring any tax penalty.[SUP][3][/SUP] According to the IRS website (Publication 970), this type of transfer is known as a Rollover and is explained at length in their Qualified Tuition Program (QTP) section. Any amount paid to another QTP within 60 days of distribution is considered Rolled Over & does not require reporting anywhere on Form 1040 or 1040NR.
    Qualified members of the beneficiary's family include:
    1. Spouse
    2. Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.
    3. Brother, sister, stepbrother, or stepsister.
    4. Father or mother or ancestor of either.
    5. Stepfather or stepmother.
    6. Son or daughter of a brother or sister.
    7. Brother or sister of father or mother.
    8. Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
    9. The spouse of any individual listed above.
    10. First cousin.
    11. Second cousin - Twice removed.
    [h=2]Disadvantages[/h]While the number and types of 529 plans is growing, not all investment vehicles are available in 529 form. And unlike other types of tax-deferred plans, such as 401K plans, IRS rules allow only a single exchange/reallocation of assets per year, in a 529 plan The earnings portion of money withdrawn from a 529 plan that is not spent on eligible college expenses will be subject to income tax and an additional 10% federal tax penalty, and the possibility of a recapture of any state tax deductions or credits taken.
    Under the College Cost Reduction and Access Act of 2007, 529 college savings plans and prepaid tuition plans are now treated as an asset of the account owner (typically the parent), meaning they have little impact on a student's eligibility for financial aid[SUP][4][/SUP].
    [h=2]Deductibility of losses[/h]In certain circumstances where a 529 account has experienced investment losses over the term of its existence, the contributor to the account may withdraw the funds and have the losses deducted from taxable income (but not counted as such for Alternative Minimum Tax purposes).[SUP][5][/SUP]
    [h=2]Gift tax considerations[/h]Contributions to 529 plans are considered gifts under the federal gift tax regulations and hence any contributions in excess of $13,000 if filing single (or $65,000 over five years) or $26,000 if filing married jointly (or $130,000 over a five-year period) count against the one-time gift/estate tax exemption. The five-year period is known as the five-year carry-forward option: Once the single donor puts in $65,000 or the married jointly donor puts in $130,000, they are not able to make another contribution (gift) to that individual (without using part of their lifetime gifting exclusion) for five years.
    Since tuition payments are not subject to the annual gift limitation, parents who are trying to minimize estate taxes may be better off making their annual gifts to another vehicle such as a Uniform Transfers to Minors Act (UTMA) account and then paying the tuition directly.

 

[Nancy]

Qualified members of the beneficiary's family include:
1.Spouse
2.Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.
3.Brother, sister, stepbrother, or stepsister.
4.Father or mother or ancestor of either.

So what would you like to go back to school for Sig????

Nancy

 

[InsaneCdn]

Qualified members of the beneficiary's family include:
1.Spouse
2.Son, daughter, stepchild, foster child, adopted child, or a descendant of any of them.
3.Brother, sister, stepbrother, or stepsister.
4.Father or mother or ancestor of either.

So what would you like to go back to school for Sig????

Nancy

Either that, or the other two just got a major boost to their fund, in case one of them wants to pursue a PhD?

 

[FlowerGarden]

I'd have him go online, sign on to his college account, and pull up his grades and status. If he doesn't want to show you this, then I would suspect he is no longer in school or going back to school. If he does show you this and his grades are acceptable to you, then good for your difficult child. If he wants to pay on his own, then let him. That's great for him. Use the 529 for your other children and if you come up with a windfall somewhere, then gift it to difficult child when he buys his first house or something.
I think he is trying to con you, unfortunately. Hopefully I am wrong.

 

[Signorina]

Thanks everyone, I will just leave the money in the account where it hopefully will earn some interest. The kicker is that it just finally came back to it's cost basis, so if I paid the 10% penalty - we would actually be below our initial investment. We were still investing into it as recent as a year ago...if I had known then what I know now, I would've put the money in my sock drawer instead of my kids college funds. While I am open to the other kids having access to it -I will wait until they need it to change the beneficiary. I sent my difficult child off to college last year thinking he was well on his way to an educated, healthy adulthood. This scenario never dawned upon me - until it happened. Once burnt, twice shy...

But, I am leaning towards cashing the CD and putting the money in my account...so it won't be accessible to him when he turns 21 in the spring of 2013. I checked the balance and it is over 5000. I can play dumb and state "you wanted me to cash it, so I cashed it...just tell me to whom I should write the checks..." Give me your tuition bill and your landlord's address... and if anything else comes up, send me the bill and I will pay it until the money is exhausted." Paper trail and all...

And then run for cover LOL

 

[Nancy]

Before our difficult child turned 18 we took her name off everything that was connected to money. We had started a mutual fund for her years ago, it wasn't that much but it would have bought her a new car or paid a year of tuition. We took it out of her name. We also had a small savings account at our bank which we took her name off of. The only thing we left in her name was her student checking account, which was hers anyway and had nothing in it.

I would suggest you doing the same for your difficult child. Hopefully the laws in your state are 21, but here it is 18 so we had to act fast. I would have forfeited earnings or paid penalties if I had to just to get it out of her name. There could be no good coming from handing her any amount of money.

Nancy