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Show DAILY Sunday, September 11 2004 THE WAI1 STREET JOURNAL & UotlOy LOVO H E A I D E3 H. EnCOrO By Jeff D. QpdyU Playing Favorites With Kids and Money siblings Should - ; most parents-a- nd question, and the immediate answer is typically; Yes, of course parents should treat each child the same.; But ask again, in a different way, and the answer is rarely so clear-cu- t For instance, my wife's parents have always strived to be scrupulously fair with their daughter and son; if they offer to help one financially, they find a way to help the other in equivalent fashion. But is that necessarily fair? After all, my wife earns more than her brother, so parental help would mean more to him. He could argue that Amy. doesn't need money that otherwise could benefit ton. Then again, Amy and I have a child to care for and another on the way. So, in theory, Amy could argue that she has a bigger need for financial aid. In reality, Amy and her brother have never worried about what their parents give to the other, and they don't routinely seek such financial assistance. But I use their example to make the broader point: When it comes to adult children and money, just what is the . definition of fan? children-th- itV at It. e: . . ; When kids are young, the disparity in financial asistance is typiconsecally inadvertent-t- he quence of individual needs and likes. Just as one child may require special health or educational aid, another may have more expensive passions and pursuits. But as children grow into adults, the issue becomes more complicated, in part because of all the adult emotions surrounding money. Moreover, it's a topic older children hate to raise at the risk of sounding like whiners. Even if they feel they're being shortchanged by parents who funnel more money to a brother or sister, how do they tell their parents they want them to reconcile the imbalance, possibly in their .wills? A friend of mine right now is watching her husband deal with all the conflicted emotions that come with, such a situation. "He's an- tnr.? my friend uavtsbecause his- Br MOLw 13 lllTUiVUO Willi M1V1IGJ, CUIU because his parents paid for her college and grad school, but she chose not to use her degree. And now they're paying for her life." They're doing so, my friend says, "because they feel sorry for her that she doesn't make as much money as my husband does, yet she wants to live the same kind of lifestyle. They coddle her because they don't want her to feel that life is unfair." What makes my friend's husband so mad is that the money his sister is consuming is money that the siblings ultimately would split in an inheritance. So, in his view, he's essentially subsidizing a life his sister otherwise couldn't afford. . Is that fair to him, just because he earns more? Should his parents account for this in their will? Should he be about it because he knows with his salary, he doesn't necessarily need the . money? Or is it simply Mom and Dad's prerogative to do with then-casas they wish, even if it means ; treating their kids differently? These aren't easy questions to answer. Alex, a. friend of mine in New York, says her mature side wants to feel that "if I have the means and I have a sibling in a difficult financial situation, I'd say it's really fine for my mom to help her out." After all, why shouldn't Mom and Dad help out a sibling who could use the money? Similarly, one of my colleagues says that only with the help of his . parents could his sister a few years ago buy a house she otherwise couldn't have afforded, "She doesn't make as much as I do," he says. "And besides, it's my parents' money and they should do what they want with it I'd love the money, but I know I don't need it as much as my sister." such generosity, . Beneath though, often flow the feelings of a Which is why Alex says that when she sees what her sister occasionally gets from Mom, "I'm a kid again and feeling very jealous that my mom likes my sister more. I'm aware that this is juvenile, but sibling rivalries, no matter how old you are, always exist in some form." Parents certainly aren't blind to the possible pain they're causing. They recognize when one child gets more than another, and they often agonize over the inequality. A woman I've been friends with for years says that her mom routinely gives more to other siblings who don't have as much as my friend does, and her mom feels bad about it. "When I'm home," my friend says, "my mom wants to pay for everything, and she says it's because she does so much more for my other siblings. I think this causes more angst for my parents than it does for me:" Here's the ultimate question all of this raises: Should parents, in either life or in death, strive for that balance my friend's mom seeks? If they give one .child some- seven-year-ol- Fran Tin 1- 1: MM Sftft l f 1 - are the best ways to personal and information for yourselves and your heirs? The. readers have weighed in. Two weeks ago, we profiled a family in California in which the matriarch had assembled in a single package all the needed data about her finances and household for her children in the event of her death. As we noted, it's a project that few families tackle-un- til it's too late. The article prompted a number of reader questions and comments. Several readers asked where they could find templates to begin entering such information. Michael Blevins, a reader in Chatsworth, Calif., provided one answer. Fannie Mae, the mortgage-financ- e company, has an excellent set of blank forms, called ElderKit, which can be found on the Internet (www.famiiemae.comglobalpdf There are a number of potential answers. Debra, a friend in e San Francisco, has a who through the years doled out money to his grandkids whenever they asked for a handout, never making any bones about their requests. Yet he kept score all along the way and ultimately evened everything out in his will so that, in the end, no one got more than anyone else. Then again, a friend at work sees it much differently. "Life doesn't dole out good and bad luck equally," she says, "and I don't see why my parents should have to try and dole out their handouts equally. Life has dealt me a better hand. My sisters have had quite a bit of bad luck in their getting laid off, divorce-t- hat has really changed their financial picture." Then again, if one kid is simply reckless financially and the other is responsible, it seems reasonable that parents might want to find a way to balance the scales at some point After all, why should the responsible child have to subsidize an irresponsible sibling? ' No matter what approach a family ultimately takes, though, parents need to communicate honestly their intentions instead of acting surreptitiously, which many parents do in order to avoid hurt feelings. But kids always know what's going on. Mom and Dad certainly don't need to seek permission from one child to help another financially, but they should at least involve everyone in the process and explain why they're helping, the lengths they're willing to go to in order to help, and how, if at all, they aim to create some equality. Because at the end of the day, everyone wants to feel that Mom and Dad treat their kids as equals. JOufrwt lives-illn- -- What great-uncl- - Gem Ruffenoch aboutfmisponsmiUtyeldercare elderkit.pdf) The package contains more than 30 templates, with spaces for financial and banking information, personal property-a- nd the name and number of your veterinarian (for whoever is lucky enough to inherit Fluffy). A Web site called Today's Seniors also has a good collection of forms. From the home page, ess, click on Financial Organizers, where you will find six sets of templates (for insurance, final wishes, etc.). One caveat: With both Fannie Mae and Today's Seniors, you must print the forms from the Web sites and then enter the data manually. There is no way to enter or update the information online. Several readers asked if we would recommend any software for assembling and revising personal and financial information. Among the best: Quicken. This al-finance software has a feature called Emergency Records Organizer, in which information can be entered in 11 categories. Of course, entries in a software program, including spreadsheets like Excel, are easier to revise and update than those written on sheets of paper. The downside: You could neglect to back up your electronic files and potentially lose person- Jeff Opdyke covers personal finance for The Walt Street Journal. Write him at kwemoneyewsJ.com Barron's Insight By Jennifer Ablan This CAKE Is Awfully Rich presses toward fare is all the these days, some investors have been helping themselves confection: shares of to a high-car- b b While fir f a "'' less popular?" says hedge-fund And in gigantic - THE M01 1 1 1 f STREET MUMU. The Wall Street Journal Eas the additional $5,000 catch-u- p amount a total of $20,000. Keep a close eye on Congress for possible tax-tachanges next colleague In Dallas asks: much can I contribute to my 401(k) plan next year and In 2006? I will turn 50 late In 2006 and I wonder If I'm entitled to make an extra contribution for Vfor year affecting 401(k) plans. Many lawmakers want to increase contribution limits. I also expect other at- year.') For 2006, the answer is yes, you can make an extra contribution. You're entitled to contribute an additional amount for the year in which you turn 50 even if your birthday is late in December of that year. Moreover, the amounts you . can contribute are going up. ' This year, as you probably know, you typically can contribute as . much as $13,000 to your 401(k) plan since you're under age 50, says Bernard S. Kent of Or order your free trial subscription at: subscribe.wsj.comsunday Well also enter your subscription for an additional 13 weeks at the money saving rate of only $59. Youlget I? weeks in insane ihnct30cffth newsstand cost v These fast moving days, you can afford to tnissevenoneissueoftheexrfuiancial : analysis, penetrating coverage and objective insi you fuKlfflilymTHE WALL STREET JOURNAL Discover for yourself why it has y : 4 Letusdelivereachdailyissuedirectoyour . Yourfirst onvourinvciceandretumittDus. four weeks cost you nothing in any case. You take no risk. Ctf wnow.evmthecdafree! BusinessAnd the Businessof Life. " "0 .tl AllHWil OSagodfer. "." deckkftkiiotfbryou,sirnprywrfc THEwmsnifflJocim. eHP in Detroit PricewatemouseCoopers If you were 50 or older at any time during the year, you could have contributed an extra $3,000, for a total of $16,000. The extra $3,000 k is known in jargon as a TryTHE JOURNALfree. Should youthen moresubscribmworidwidetimaivotlOT business publication.' home or office for 4 weeks FREEJ " , 'catclHip contribution.' For next year, 2005, you typically can contribute as much as $14,000, Mr. Kent says. Someone who is 50 or older could contribute an additional catcrnip sum of $4,000, tor a total of $18,000. In 2006, the amount most peo- pie can contribute will rise to $15,000. Since you will reach age , 50 that year, you can contribute an tempts to expand retirement-saving- s incentives in general. haven't beard anything the $250 "teacher deduction" lately. WW this deduction bo permitted for tax year 2004 as It was in the prior two yean? 5.C., East FallowtMd, At That deduction expired at the end of last year. Earlier this year, it appeared that Congress Qal A. would resurrect It But lawmakers' haven't yet done so. Thus, the outlook remains blurry. This deduction applied to teachers and other educators in lamlergartervthroughgrade 12 schools who paid for classroom, materials, such as books and supplies, out of their own pockets. To qualify, you had to work at least ;; 900 hours during a schoof year. . 1 i top- By Tom Herman AB Call Hxedost structure." flight malls and prime downtown shopping districts, and decorates its restaurants in a rich, warm decor. Cheesecake Factory spends an average of $3.5 million per location, about 50 more than some rivals. Up to now, such outlays Q.A that manager Peter Costs are unusually high because the company focuses on 12. Ask DOW Jones 14 2(03 Sourer Vmmttmim Siris of Guerrilla Capital Management, who has shorted or bet against the stock. They have a current quarter, it's likely to come in around The pace could slacken further as the company Get 4 Full Weeks Of price (CAKE) an a MaooNtioolt osaiofc fh I found several older savings bonds n a book, .The. bonds wore purchased by a gsritlo man in the Marines and wora to Ms tether to the IL. I : I . , an your data if your computer has a nervous breakdown. Does all this seem overwhelming? Then hire a personal organizer. The National Association of Professional Organizers (www. napo.net) has members who specialize in "estate organization." Barbara Langdorf in Irvine, Ca: lif ., is one such specialist. Her company is called SOS Financial Organizers. For about $50 an hour, Ms. Langdorf helps clients assemble information and paperwork-abo- ut investments, loans and insurance, comamong other categories-a- nd pile the data in a notebook. One stumbling block, according to Ms. Langdorf, is privacy: Some older adults are hesitant to write down and share every piece of personal information with their children and heirs. The answer, she says, is simple. "You don't have to tell your children everything. But you want to be able to say, 'If something happens to me, go to the red notebook on my desk. That's where you'll find all the information.'" Just how important is this process? A reader in Utah, Joan Ogden, shared the following story: "For years my parents had provided to both of us kids a complete listing, of personal and financial information. But they went one further. "They died simultaneously due to a single auto accident and when we went in to the house, we found that virtually every special 'item' had been labeled as designated for one or the other of us. For example, a special Christmas decoration was labeled for me, and a different one for my brother. On a piece of tape under one heirloom was one name, and under a different heirloom was the other. "It was visible proof, at that wrenching time, of how much we were always on their minds, to what lengths they had gone to acknowledge and codify their understanding of our likes and wants- -: and to spare us the anguish of trying to decide who got what. It was a blessed gift." Glenn Ruffenach is the editor of "Encore," The Wall Street Journal's quarterly guide to retirement. Write to him at encoraOwtj.com have appeared justified by strong operating gains. For the four years through 2003, sales and profit each more than doubled at Cheesecake, to $774 million and $57.8 million, respectively. At a recent $41, the stock has been trading at about 31 times Wall Street's average earnings estimate for this year, or double the industry norm, and 25 times 2005 estimates, compared with the high teens for other chains. Mr. Siris figures that given the company's growth prospects, the shares up sevenfold, adjusted for splits, since the company went public in 1992 merit a multiple no higher ' than 20 times 2005 estimates, suggesting a price of $33.80. As the buildout costs pile up, an-' Factory face is: What happens if they get a little 25. semdto uilmnefb msStet ox "The problem company has grown rapidly it now has 80 locations across the country continued expansion won't be a Cakewalk. As Cheesecake Factory opens more and more restaurants, its rate of earnings growth is slipping. Historically, this has averaged an . excellent But it didn't top 20 in six of the past seven quarters. Factory that guys like the Cheesecake the "Events move so rapidly that had you asked me that question an hour ago, I'd have a different answer." goal long-ter- restaurants. CAKE). Based on expected earnings, shares of the Calabasas Hills, Calif., company have been trading at a multiple twice as high as those of most other players in the casuaWining sector. Though . ChMMcak of operating more than 300 Factory (trading under Clwettcak the symbol ; Help on Getting Organized thing of value, must they offset that by giving to other children something of equal value now or possibly make up for it later in their wills? be treated By Qa oentiy, attempted to contact him, even to alyst Andrew Barish of Banc of America Securities thinks Cheesecake will disappoint Wall Street He recently lowered bis 2004 earnings estimate to $1.29 a share, 15 above last year's level, and well low the consensus of $1.34. . be- Jennifer Ablan is a staff writer at Barron's magazine, which is available online at www.barrorw.com the extent of spending money to search for his current address, but have not boon able to contact him. The amount of these bonds Is such that, H I were him, I would appreciate someone getting them back to me. Any suggestions? 1 relayed your question to Pete Hollenbach of the U.S. Treasury Department's Bureau of ' the Public Debt In Washington. He replies that you should send the bonds to the Bureau of the Public Debt 200 Third Street Parkers-- ' burg, W.Va. 2610$. , - "We have a locator group in our Parkersburg office that works to reunite owners with bonds that were' undelhwable, he says, "We would check to make sure we haven't already reptaced the bonds, and if not our folk will attempt to locate the owner and deliver the bonds. We do appreciate your reader's ef--: . forts to try and find the owner. ' I joMwrm Pete In saluting you for all your time, effort and Inter- - . est I strongly recommend out you ' make a photocopy of each of the bonds before you send them. , ; A. Herman's Tax Report" appears Wednesdays in The Wad Street journal Send questions on s or taxes to; Tom tlrtftfwes,-investnient- uknowldnoi.iuridiJOICJwtl-Lui- n and include your, name, address ... : and a daytime telephone number. 4 Questions may be edited; we regret that we cannot answer every tetter. , |