CARING FOR ELDERLY PARENTS
It’s been quite a week. Last Friday a client called and said he had just flied to Baltimore to be with his mother who has been hospitalized and the doctors are very pessimistic as to her chance of recovery. On Sunday a good friend told me he was heading to Geneva to be with his father who fell and broke a hip. I am actually writing this column from the airport awaiting my flight out to the west coast to visit my father- he should live and be well as some suggest to protect your bed at all cost.. Thirty or forty years ago no one would have dreamed of families literally spread out across the globe. As life expectancy continues to increase, the burden of both financially and physically caring for elderly parents is one of the most important and pressing issues for adult children that exists today. I often see families torn apart by this responsibility. It’s sometimes difficult for families to retain harmony and still provide the necessary care needed for their parents. Managing family finances is often carried out between spouses, but what happens when children have to start taking control of their parent’s situation?
There are many different approaches families take in handling this issue. Some elderly parents single out one child to handle their financial affairs. In most cases, the siblings who are not singled out are happy to be free of the responsibility. Other elderly parents don’t explicitly mention anything and adopt a “wait and see” attitude. Here, an alert child should step in before any irreversible fiscal damage is done. The most common approach is where parents don’t want to single out any one child for fear of insulting other children, so they ask all their children to cooperate in overseeing their financial matters.
Which method is best?
There is no “best” method for success. The goal should be to limit the amount of family discord, while providing the greatest quality of financial oversight. Each family needs to understand its own dynamic, and take geographic relationships, and fiscal experience into account.
The most common case I see is where there is one child living in Israel, and the rest of the siblings still live abroad. (While I have focused on the Israel example, this could just have easily been one child in New York, the rest in California and the parents in Florida or in some other country—you get the point. )The parents sell their house and come to live in Israel. The siblings come to consult on a financial plan for the parents. We discuss the assets, the basic income requirements, and health-related expenses. The sibling living here accepts the burden of physically caring for the parent, and all of the siblings plan on jointly handling the money. Then, they all return to the States. That’s when the trouble begins.
Since the rest of the siblings are far away, they begin to lose touch with the day-to-day issues involved in caring for their parent. Nonetheless, they feel confident in their ability to handle money, so they all have strong opinions in the financial decision-making process. The child actually caring for the parent, on the other hand, though no money expert, is the one who has to pay all the parent’s bills. There is often an incredible disconnect between them in terms of financial priorities. They all seem to have their own agenda.
Furthermore, each sibling doesn’t want to burden the other, so they call the advisor(s) with minor details. The lack of clear communication between the siblings themselves and with their parents makes for a tricky situation.
The need for objectivity
Siblings need to open up the lines of communication between them, and should definitely consult with an advisor if they need help in creating a financial plan. Often it takes an objective third party to smooth out emotional flashpoints, and maintain family harmony. A financial advisor can develop a plan for an elderly parent in consultation with the responsible sibling, and then can invite the rest of the siblings in to hear the proposal. Everyone can learn the details, ask questions, and understand the greater picture, without one sibling appearing too domineering or pushy.
Assuming control of your parent’s financial responsibilities can be emotionally draining and time consuming. However, having a concrete plan as to what needs to be done, and who should do it, can help mitigate some of the emotional energy. Siblings should be prepared to consult with one another, and assign specific duties to all the family members according to their individual abilities.
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
Aaron Katsman is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. a registered broker dealer, Member FINRA, SIPC, MSRB, NFA, SIFMA. For more information, call (02) 624-0995, visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il.
