October 29, 2008

by JEANNE FLEMING, PH.D. and LEONARD SCHWARZ

Question: A few years ago I gave my sister my old car. Now Emma’s bought a new one and sold mine to our 18-year-old brother. I’m furious she didn’t just give the car to Colin, as I gave it to her. Mom says that I should mind my own business, that Emma isn’t as well off as I am. Who’s right?

Answer: Sorry, but unless you told Emma that there was a string attached to your gift – that when she disposed of the car, she had to give, not sell, it to a family member – your sister was free to take Colin’s money. Her financial situation doesn’t matter.

We understand why you may have believed your sister would follow your generous example. But that’s taking too much for granted. It was reasonable for you to assume that Emma would, say, buy insurance and otherwise transfer the liability associated with the car from you to her. But people quite honorably sell things to their relatives all the time, and there’s no “once a gift, always a gift” rule. If you felt the car belonged to your family, you needed to tell your sister that at the time you gave it to her.

This doesn’t mean, though, that you shouldn’t tell Emma you disapprove of her making a buck off your baby brother. While you have no right to expect her to adhere to your unspoken wishes, you do, as her benefactor, have every right to let her know what you think of what she did with your gift.

Questions? Email Money Magazine’s ethicists – authors of “Isn’t It Their Turn to Pick Up the Check?” (Free Press) – at FlemingandSchwarz@right-thing.net.

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