The Conversation About Finances Between Adult Children and Aging Parents

The issue of how much detail parents should tell adult children about their finances is a complex one. All sorts of factors come into play, from the practical to the hot button issues of family dynamics. Every situation is different and there is no boilerplate right answer. The scenarios below are meant to be representative of ones I have experienced in my practice.

John and Mary have always lived well and that has continued into retirement. Their children assume that they have a substantial amount of money and therefore think nothing of coming to them for help. The reality of their finances is that they have always lived right up to the edge – and at times beyond. They aren’t sure how to begin to correct this illusion and change habit patterns.

Eva is widowed and living on a fixed income. She’s proud and very independent. Recently she realized that it was time to stop driving so she hired a woman to drive her when needed. As more and more of her friends have stopped driving, she has had to begin using the driver more frequently. The cost of this is starting to have an impact on her finances but none of her family lives in the area to help out. She doesn’t want to ask for her children for help so she’s staying home alone more often instead.

Dave and Anne were financially very comfortable, not rich but very comfortable and very private about how much money they had. Their son-in-law has never made much money and never seemed very ambitious. Dave just passed away and now Anne is working through things such as Power of Attorney, signatory authority on her accounts, access to the safe deposit box, etc. She’s uncomfortable having her son-in-law know how much money she has but knows that her daughter is the logical choice for these responsibilities.

Adult children as well as their aging parents may be uncomfortable initiating or being involved in conversations about topics that haven’t been discussed before. But, it is important to have the conversation and develop a plan before a crisis or emergency occurs.

Determining Who Should Have Your Power of Attorney

You don’t have to be a Rocket Scientist to…..

Think about whom you want to handle your affairs if you become unable to handle them yourself, and ultimately when you pass away. Really assess which of your children (if any) has the skills needed for the job. A high IQ doesn’t necessarily equate to common sense, good organizational skills, and time management abilities.

Some of the things to consider are:

One person may be a logical choice to handle money or legal affairs while another person may be more suited to be the point person when it comes to the health care and medical responsibilities.

Talk to each person to whom you would like to give these responsibilities. You may find that they don’t want to accept the responsibility or they may need time to think about their decision. This isn’t something that the person should find out about by surprise.

If you are considering naming two people (two children, two professionals, two friends, or any combination of these people) to be co-decision makers, think about how well they will work together. If your children can’t get along when sitting at the Thanksgiving table, chances are that when things are stressful they won’t be able to get the job done.

Another touchy issue to take into account is your son/daughter-in-law and how much influence they will have or you want them to have.

Once your decisions have been made, an attorney should be consulted to implement all the appropriate legal papers such as Power of Attorney, Power of Attorney for Health Care, and Living Wills.

Planning For When You May Need a Caregiver

Who's Got Your Back

We’ve talked about planning for someone to pay your bills and handle your mail if you need help. This back-up plan is about the stuff of daily life. If you are elderly or are facing some major health issues, who will be there to pick up some groceries, take you to a doctor’s appointment, or just sit with you for an afternoon when you’ve come home from the hospital? These can be stressful, upsetting questions to face.

Your friend may have a gazillion children, grandchildren, and great-grandchildren all living within a ten mile radius of her home. And, your sister may live in one of those fantasy neighborhoods with a slew of neighbors ready to pitch in at a moment’s notice. Yes, you’re allowed to have a five minute pity party for yourself if you don’t. Then, start to come up with a plan.

Talk to friends, people in your church/synagogue, and the help in the doctor’s office - anyone you can think of. Many times they know someone looking to make some extra money. Getting some names and talking to them well in advance means you can implement a plan quickly.

Learn about the different types of agencies and the services they offer. Know which supply nurses and aides vs. those that drive to appointments and put a meal on the table. Do the research now.

Give some thought to the concept of ‘pay it forward’. Think about volunteering or getting involved in a community organization now. Hopefully by helping others now, others will help you if and when you need it.

The reality is most people don’t like to ask for help. Or, when people ask ‘what can I do’, it may be hard to have an answer for such a broad question. Or, a lot of people offer to help at the beginning of an illness or problem and then slowly (or maybe not so slowly) the offers of help stop.

Before you need it, really think about how you’ll cope with a variety of situations, be they of a temporary or permanent nature.

Sweepstakes Scams and the Elderly

Most junk mail is no more than just a pain in the neck and environmentally unfriendly. But, for people that are trusting and vulnerable, it can become more than that. Fraudulent sweepstakes and contests via the mail as well as over the phone rob the elderly of huge amounts of money every year.

There are many legitimate sweepstakes and contests (Publisher’s Clearinghouse and Reader’s Digest are two) and the laws that they must abide by have been strengthened over the past several years. Unfortunately, there are many other types of sweepstakes that use strong tactics to entice money out of people. The elderly are a prime target because not only are they vulnerable, when they realize what’s happened, they’re too embarrassed to report the crime.

Here are some rules of the road:

It’s illegal for a company to require you to pay a fee or buy something to enter a contest or sweepstakes.

If you really do win something, taxes will be deducted from your winnings or you pay them directly to the government. If they tell you to mail the taxes to them and then they will send your check, it’s a fake and they will just keep your money.

No legitimate sweepstakes company will ask you for your credit card number. Do not give this information to a caller telling you that you’ve won a contest.

Some of these fraudulent companies purposely have names that are misleadingly similar to the legitimate ones.

Be careful of those very official looking envelopes. Con artists know that using words like ‘urgent’ or putting official types of seals on the envelope make the recipient more likely to believe the contents.

If the postage on the envelope is bulk postage, a lot of people got the same mailing telling them they are winners. Don’t believe it.

If you are at an elderly person’s home and you see an extraordinary number of sweepstakes mailings, start to ask questions. Once someone responds to one of these fraudulent contests, their names go out on the mailing lists and they receive more and more mailings.

Again, if you’re at an elderly person’s home and you see a large number of magazines, ask questions why. They may be subscribing to magazines thinking it will increase the chances of their winning.

You will never be asked to wire money to a legitimate sweepstakes company.

Keep telling yourself – if it sounds too good to be true, it probably is.