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By Eve Kaplan, CFP® Professional

What should you do when your parent or parents’ financial problems become your problems? We Americans are notoriously private about financial matters; it’s common for adult children and parents to share very little in the way of financial information. This kind of privacy can come back to bite us, however, when issues or problems our aging parents face become our financial problems, too. Here are two examples of how adult children tackled these issues.

  1. Janice and her mother, Joy:

Janice’s mother, Joy, is in her early 80s. Her father passed away several years ago. Both parents grew up in the Great Depression and led relatively frugal lives. Janice’s mother, Joy, remains fiercely independent and still lives in the same suburban home her parents bought 50 years ago. Janice never inquired about her mother’s financial well-being – and her mother never would have shared any information, anyway, since financial matters are “private.” This situation worked well until her mother called her one day, out of the blue, and asked for a substantial loan which Joy promised to repay in a few months. This alarmed Janice. After digging more deeply into the situation, Joy reluctantly confessed she’d been approached by phone several months ago by a man she now considered to be “a friend.” She enjoyed speaking with him daily. After gaining Joy’s confidence, this “friend” began to ask for money to help him out of a “tight financial situation.”  Over a period of months, Joy mailed him a total of $18,000 in checks. Joy found herself looking forward to these calls and she felt like a complete fool when Janice pried the information out of her and told her she was being victimized by a scam artist. Janice wasn’t able to determine the extent of Joy’s problem since her mother alluded to CDs and other assets but she would not share the information with her daughter.

Janice located an hourly fee-only financial advisor to assess her mother’s situation. (There are a number across the country – they can be located at ). Janice paid Joy, on behalf of her mother, but she understood their discussions would be confidential since Joy otherwise wouldn’t agree to any meetings. Over a period of weeks, the advisor was able to advise Joy on how to best proceed in terms of dealing with this situation. The advisor didn’t share particulars with Janice, he indicated he was successful in terminating Joy’s contact with this scam artist.

Joy is doing better now; she’s agreed to allow her daughter to help her review her checking account statement each month so Janice can spot any issues early.

  1. Fred and his parents:

Fred and Dora, my clients, are in their 40s. Fred’s parents – who are in their late 70s — are financially comfortable and in relatively good health. There is little exchange of financial information between Fred/Dora and his parents. In discussions with Fred and Dora, however, it’s clear that longevity is in their family and Fred is concerned that his parents won’t always be in a comfortable financial situation. His parents don’t trust advisors and have been reluctant to seek advice for decades.

Fred convinces them to meet me on condition that I protect his parents’ privacy — unless his parents indicate otherwise. In discussions with Fred’s parents, it’s clear that they have charitable intent and also want to give part of their future estate to Fred and his sister. Discussions reveal that their estate documents are over 20 years old and they’re concerned about having enough money to cover long-term care if both of them need it. They’ve seen friends spend down their entire retirement savings to cover long-term care.

Fred’s parents’ don’t have any financial problems now, but that could change if they live into their 80s and 90s.  The benefits of financial planning come into play when I’m able to discuss their wishes and work with them and an estate attorney to draw up new, relevant estate documents. We also discuss if it makes sense or not to look at long-term care insurance at this late date. Fred’s parents want to divide their future estate between Fred, his sister and a charity they support, but with some strings attached.

Fred and Dora and not directly involved in any way but they’re satisfied that several sets of  objective eyes (estate attorney, insurance agent, elder care attorney) are reviewing his parents’ situation to avoid severe planning gaps down the road. Fred and Dora obviously stand to benefit from this, as prospective beneficiaries of a portion of his parents’ estate but their motive is to make sure his parents don’t make costly financial decisions or mistakes that come back to plague them.

Financial planning isn’t always a “family affair,” but my clients’ parents and/or children can affect the financial well-being of my clients. A really good financial planner will ask comprehensive questions about extended family members. As an advisor, I want to be there to deflect any potential threats to my clients’ well-being down the road. Bringing  a financial planner into the picture as an objective set of extra eyes can be a win-win for all generations concerned.


(C) Copyright by Eve Kaplan, 2015. All Rights Reserved.