(photo credit: olderadults.org)
As life expectancy continues to increase, the burden of both financially and
physically caring for aging 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.
family finances is often carried out between spouses, but what happens when
children have to start taking control of their parents’ situation? There are
many different approaches families take in handling this issue. Some elderly
parents designate one child to handle their financial affairs. In most cases,
the siblings who are not chosen are happy to be free of the
Other elderly parents don’t explicitly mention anything
and adopt a “wait and see” attitude. In this case, an alert child should step in
before any irreversible fiscal damage is done.
The most common approach
is where parents don’t want to designate any one child for fear of insulting the
other children, so they ask all their children to cooperate in overseeing their
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 dynamics, taking 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. The
parents sell their house and come to live in Israel. The siblings come to
consult on a financial plan for their 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 parents, and all of the
siblings plan on jointly handling the money. Then they all return to the United
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 parents.
Nonetheless, they feel confident in their
ability to handle money, so they all have strong opinions in the financial
The child actually caring for the parents, on
the other hand, though no money expert, is the one who has to pay all the
There is often an incredible disconnect between them in
terms of financial priorities. They all seem to have their own
Furthermore, each sibling doesn’t want to burden the other, so
they call the adviser(s) with minor details. The lack of clear communication
among the siblings and with their parents makes for a tricky
THE NEED FOR OBJECTIVITY Siblings need to open up the lines of
communication among themselves, and they should definitely consult with an
adviser if they need help in creating a financial plan. Often it takes an
objective third party to smooth out emotional flashpoints and maintain family
A financial adviser can develop a plan for elderly parents in
consultation with the responsible sibling and then invite the rest of the
siblings in to hear the proposal.
Everyone can learn the details, ask
questions and understand the bigger picture, without one sibling appearing too
domineering or pushy.
Assuming control of your parents’ financial
responsibilities can be emotionally draining and time consuming.
having a concrete plan for 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 each other and assign specific duties to all the family members
according to their individual abilities.
Aaron Katsman, a licensed financial adviser in Israel and the United States,
helps people with US investment accounts.