Call it the triple-whammy: An elderly parent, a new significant other and an aging bull market. A reader recently shared his frustrations over watching his elderly father gift a large portion of his assets to a new girlfriend. He is his father's designated power of attorney, but there's not a lot he can do about the situation because the father hasn't been declared (often by a physician) to be incapacitated. The months or years leading up to a determination that would trigger a power of attorney designation are complex and often emotionally painful. Families are concerned about a combination of big withdrawals and low returns at the end of life that will ultimately decimate the elders' savings and leave adult children on the hook to make up the difference. Many of the worst financial abusers are the very children or other relatives who are supposed to be looking out for these seniors, experts say. Is the new girlfriend unduly influencing the senior or taking incredible care of him? Or are the children just trying to preserve their inheritance?
When it comes to elderly parents and their finances, no one is every really a completely neutral party, according to “Strategies for managing your elderly parent's finances,” in The Chicago Tribune.
One should document examples of financial mismanagement; however, this can cause a fight in court to take control of parents' assets. And if the children lose, the parents may be angry enough to completely cut off the children.
There can also be trouble when parents decide to leave assets to children according to their perceived needs instead of an equal split. The children’s situations can change and giving different amounts may result in permanent damage to sibling relationships long after the parents have passed away. However, an equal split of the estate places the onus on the children to be good stewards of the money. In other words, simpler is sometimes better.
Communicate your intentions so that your children are prepared for the day when the assets are disbursed. They’ll have some idea about what is coming to them.
It’s always a good idea to speak with an experienced estate planning attorney. He or she can give you ideas and strategies to make your money go farther when your children inherit and find solutions for children who might not spend the money wisely.
Reference: Chicago Tribune (September 4, 2015) “Strategies for managing your elderly parent's finances”
Comments