Dear Moneyist,
My mother was recently widowed. She and my father owned a small business, which she decided to sell upon his death, as she is in her early 70s and no longer wants to deal with the business.
My mom and dad were quite successful and put a lot of money away over the years, totaling approximately $3 million. My mom’s estate will be divided among her three children equally upon her passing.
I have a sister who worked for my parents for a long time in the family business, which overlapped into their personal finances. My sister has taken over the majority of our mom’s financial matters as well, and our mom is paying my sister to do so.
It makes me very uncomfortable that just one sibling has access to all of our mom’s finances. We have no idea what she is being paid or if she and our mom are making the best financial decisions.
Since we are all equal beneficiaries of her estate, I feel we should all know what is going on. If my mom doesn’t want to do that, then the next best thing would be to choose a neutral person outside the family and pay that person instead.
My mom is happy with how things are, and doesn’t feel the need to involve anyone else in the matter. What would you suggest is the best way to deal with this situation?
Justin
Dear Justin,
Your letter comes at a good time. Not for me, but for you. It’s better to preempt any financial malfeasance or even unintentional poor decisions. I receive far too many letters about misdeeds and skullduggery after they’ve occurred, and it’s always more difficult to fix the problem after the fact. Transparency and accountability should be the cornerstones of all such dealings, especially those related to family finances. The question is: Who is your mother accountable to?
Your situation reminds me of this previous letter I received from a sister who was iced out of her mother’s financial affairs. They lived in different states, for a start, so she was attempting to manage a situation from afar. Also, her mother had Alzheimer’s disease, so she was vulnerable and needed help. This woman had not seen her mother in over a decade, so she needed to take responsibility for that. All of that is to say: For you, things could be a lot worse.
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But back to you: You are walking a fine line here. You want to protect your mother from any bad decisions, intentional or otherwise, and you want to protect your own inheritance. However, I urge you to check your motivations before having this conversation, and to ask yourself whether you are acting in your mother’s best interest, your own best interest, or both. Rather than airing your concerns and alarming your mother, ask her if you may make suggestions.
If you have reason to believe that something is amiss, that’s another story. The National Center on Elder Abuse, a government agency affiliated with the U.S. Administration on Aging, reports that financial exploitation is a “fast-growing problem. It commonly involves a trusted person. They include caretakers, family members, neighbors, friends, attorneys, bank employees and, yes, even leaders of religious organizations, and doctors and nurses.
If that were the case, your mother would be better off hiring a financial adviser who has a fiduciary duty to act in her best interests. Do not walk into this situation from a position of fear or mistrust. Keep an open mind. Has your mother written a will? How is the business going? What oversights are in place to monitor all the transactions? Does your mother have a lawyer or accountant involved? Are there enough checks and balances? Your first question should not be, “What about our inheritance?”
Your first question should be, “How can I help?”
Also see: My fiancé’s father is custodian of his IRA — how can I get him to relinquish control?
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