We are Partly Responsible for Our Parents’ Foolish Spending
Some of our elderly needlessly end up broke. Many others pass along much less to their heirs and beneficiaries than they had planned, worked and saved for during their income producing years. They didn’t just wake up one morning and decide to deplete their accounts nor was there a major event that took everything they had. It happened gradually and was barely noticeable, if at all, until it was too late. The reason? Foolish spending. Or, at least, spending that was contrary to the beliefs and practices that guided them from their early years until the time when aging difficulties caused changes in their behavior.
As caregivers, we often have a hard time discerning appropriate leeway when a parent’s behavior is different from normal or what we would expect; and it causes a lot of stress. Especially in America, we believe that individuals are autonomous and that only when their actions place them or others in danger are we allowed to interfere. Physical problems are relatively easy to judge but cognitive issues are much more complicated. Not only aren’t we qualified to assess them accurately but we can’t even look at them objectively. Where is the boundary? How can we tell? Regarding matters so personal as finances, what right do we have to step in and take control?
Moneywise hits a roadblock
Over 25 years ago, my mother was in her mid-70s and I was to be the executor of her estate. Dad had passed years before. One day, she told me that she had hired a financial advisor called Woody who was rearranging her modest portfolio. She wasn’t interested in my opinion of him (it wasn’t good) but only whether I thought the advice he gave about certain annuities was sound. When I researched them, I found he hadn’t misrepresented them so I thought there was nothing more I could do. In the end, there were several problems with Woody and his advice including a personal loan from my mother that he refused to pay. I think of him whenever I hear of someone who takes advantage of a senior and I’ve never completely forgiven myself for failing to do more.
I recently heard how a friend of mine and his wife, after they retired, had given away almost all their savings to every solicitor who rang the doorbell or phoned for a donation. If it weren’t for an insurance salesman or two that persuaded them to take out substantial policies, she might not have had enough left to bury her husband. Similarly, I know of an older lady who suddenly began buying items from a shopping channel so often it became a problem. Stories are everywhere about aging parents who overspend.
Unfortunately, I’ve also heard too many stories about siblings who blame the one who took care of Mom or Dad for allowing her or him to spend foolishly or wastefully. It didn’t seem to matter how much of their time, effort and money caregivers gave to support them while they were alive – to brothers and sisters who aren’t getting as much as they had hoped, “she should have done something to stop them.”
The real issue isn’t about causes
Why do people who are frugal throughout most of their lifetime change so dramatically as they enter the stage when their expenses are minimal? And why are the elderly especially vulnerable to scams? For some, maybe it has to do with the good feelings we get whenever we buy something. For others, perhaps it is a way to feel needed again. Or it might be a reaction to a bossy caregiver. In dementia, even in early stages, there may be a decline in an ability to understand the consequences of their behavior. Often, the change happens after a husband or wife passes away; which might be a way to deal with loss or boredom. If you ask a senior why they do it, they may tell you they don’t know. Whatever the reason, the question remains, “Is the new behavior of the older person in accord with what they honestly want for themselves?”
The answer isn’t always obvious. Human beings have the capacity to change for the better. We know that people who live miserly for most of their lives can have a moment of enlightenment and become benevolent and generous. Think Scrooge. However, every situation, including Scrooge’s, should be scrutinized for reasonableness.
It’s a nightmare for caregivers. Even with input from other family members, complete agreement about what to do is unlikely unless the parent has no self-control left at all. We absolutely do not want to imply that children have any right to their parent’s money. If parents sincerely want to give away any portion or all of it to others they should do so. They earned it and it belongs to them; not to anyone else.
There is a better way
We believe one thing parents could do to help their family is to express their desires in writing early on; in the same way as they prepare a Power of Attorney for Health Care. Ideally, they would take a close look at what they have and what they’d like to keep before they experience a major late-in-life setback. Their intentions should be known to each of their trustworthy children, and one should be a signatory to their accounts. Openness is important but caution is more so. Situational “if this, then that” scenarios could take the pressure off caregivers and give them the confidence of knowing they are complying with their loved one’s true wishes. The parent is in charge but if they start spending contrary to their previously stated desires, the caregiver can initiate a corrective measure that Mom and Dad had already agreed to.
Whether our suggestions work in your circumstance or not, we hope you will do something to protect your parents from a negative impact of aging on their finances. They’ve spent a lifetime to get where they are. Don’t let a feeling of embarrassment hold you back from bringing up the subject with them. Keep talking about it until you get the answers you need to do the best job possible for them. This is all about them – not you. You will get over the uneasiness soon enough and you’ll always be glad you helped them achieve their life’s dream.