Last year, Blossom Rosen realized it was time to get help with her finances. Now 80 years old, she was experiencing confusion and memory loss, and had started settling accounts with her gardener and handyman by simply handing over her checkbook to them.
Walking to lunch one day with her daughter Nance, 54, Rosen stopped suddenly and confessed: “I can’t write checks anymore. I need you to do it for me.”
Within six months, with her mother’s memory continuing to deteriorate, Nance Rosen was handling all of Blossom’s finances.
The Rosens’ situation is not unusual, says Suzanne Hall of the Baltimore investment advisory firm The Financial Consulate. As director of a program called SENIOR Connect, Hall has seen many older people mismanage funds because of diminished capabilities.
“As we get older we are going to need help,” says Hall. “So if seniors have a good relationship with their children, they want to start the process of talking with them about certain aspects of their finances.”
The gathering of families over the holidays provides an opportunity to discuss the issue of financial assistance and who will provide it. While a child is usually the natural choice, the handoff requires careful planning to avoid straining relationships and to make sure nothing is forgotten.
Here are five steps for a smooth transition:
1. Choosing the appropriate helper
Naturally, you should share your financial information only with a child whom you trust, but other factors also come into play. One child may handle money better, but another may be more able to act calmly in an emergency.
Keep your child’s personal situation in mind. “I have a client who did not select her son because her son’s wife is disabled, so she felt that he has enough on his plate,” says Marsha Goodman, an elder law attorney in Phoenix.
Avoid giving this responsibility to any child who has his own money problems or is struggling with addiction, advises the MetLife Mature Market Institute, a New York-based organization that studies aging and longevity issues.
“If you know someone has an alcohol or drug problem or they’re gambling or they’ve lost a lot of money, they could be looking to replace that money or get additional resources from members of the family,” says John Migliaccio, director of research for the institute.
If you don’t feel comfortable sharing your financial information with your child, consider another trusted relative, a friend or a professional fiduciary.
2. Starting the conversation
Let your children know in advance that you’d like to have an important discussion about your finances, suggests Nancy Brooks, a Denver-based psychotherapist and mental health expert with JustAnswer.com.
When it’s time to talk, have the conversation face to face, with financial documents in hand.
Ask your children what they’re willing to do. “They may have time constraints,” Brooks says. Also ask whether they have ideas about ways to help you manage your finances.
When a solution is reached, put it down in writing, particularly if other children are not involved. “Sibling rivalry can rear its ugly head when one child is chosen over another to help mom and dad, so be sure everything is out in the open and is traceable on paper,” Brooks says.
If the conversation is too challenging for you to handle on your own, consider hiring a mediator. “A professional mediator is a trained neutral who facilitates the conversation, with no stake in the outcome of the conversation and no baggage based on years of family dynamics,” says Jane Beddall, founder of the mediation firm Dovetail Resolutions in New Haven, Conn.