There is a critical moment in many child-parent relationships when adult children realise that it may be time for them to step in and take charge of some or all of their parents’ financial matters.
The move could be a result of an ageing parent’s illness or just because of being unable to manage money issues as efficiently as that could be. That could be a very sensitive situation, however, especially if the parent is unaccepting of your concerns and thinks everything is just fine. In fact, you may, in many cases, feel obliged to step back and postpone the entire discussion if it seems to be getting out of control quickly.
But if you see some openness to your suggestions, you may need to follow these steps to ensure that you’re helping them without stepping too close to their financial independence.
Provide reasons and help
The first question parents might ask in this situation is why you’re concerned about the way they handle their money affairs. Your answer will probably set the tone for the entire discussion. Try not to be critical of any particular decision they’ve taken or are planning to take. Instead, explain how a new financial adviser or attorney can help take the worries out of the process. In fact, do get some professional help in making sure that their money and investments are in order. With doing so, you alienate any concerns that you have a personal interest in interfering. You also will make them feel still in charge of their money decisions.
Take charge
But the situation may not always be as straightforward. Many adult children with parents who are losing their sound decision making because of ageing or illness may find themselves forced to take charge. That is a difficult and unpopular decision. Your parents may rebel, and you may be putting your relationship at risk. The best strategy is to get the backing of your siblings or other relatives before taking any such step. The more trustworthy people you have on board, the more likely your parent will eventually accept your supervision over their financial matters.
Do it their way
Regardless of how much control you take over a parent’s financial matters, try to still keep them in the decision-making loop — assuming that they are capable. In addition, try not to switch completely to money-management ways that are beyond their comfort zone. Are you a big fan of going paperless? If your parents are not using computers efficiently or at all, you may be excluding them from monitoring their accounts by switching to electronic statements. Similarly, phone banking, internet banking and the like may not be their cup of tea. So try to keep things within reach and in a language that they understand. In short, don’t alienate them because they may only see your actions as a way to control them rather than to manage their financial affairs.
Plan for the future
No one would want to discuss inheritance issues with their parents. But if you’re not sure that they have their financial matters set for a smooth transition after they pass, you unfortunately may have to tackle this issue. Again, the best way is to have the topic raised by a professional when you sense their readiness for getting help. A legal attorney or an accountant may be familiar with similar situation and able to handle their feelings gently.
All you need is to select someone who is trustworthy and able to communicate to your parents that he/she is on their side. Having a will, if they don’t have one, is the first step. But that isn’t all. You must be sure that other investments, property titles, etc are in order. Putting off this discussion may be tempting, but it won’t sort out financial problems later.
Rania Oteify, a former Gulf News Business Features Editor, is a Seattle-based editor.
