Bear with me on this one.
I have a friend who lives on the other coast. His life is very gradually spinning out of control. I, unfortunately, feel confident that, in about 10 years, he will bottom out, be broke, and possibly heavily alcoholic or addicted to other drugs. Then he will have to move back here, where his family and friends live. His family has been unhappy with his lifestyle choices, and have already given him gobs of cash over the years. I suspect he’ll come to me for aid in his time of dire need.
So I’m thinking of starting a fund for him (like a college tuition fund or an IRA) now, so that in 10 years I won’t be caught off-guard when I need to send him to rehab and help him back on his feet.
Is there any way to do this tax-free (instead of opening a mutual fund acct., etc.)? Neither of us are anywhere near retirement age, so an actual IRA would have huge penalties.
[And please stick to the OP, without challenging my basic assumptions about my friend’s destiny or the wisdom of my scheme vs. earlier intervention, letting him bottom out on his own, etc. Thanks.]