Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
My dad is 84 years old and in fairly good health, except for a limp in his walk. He's fairly active at church and has a lady friend with whom he enjoys dining out, shopping and going to church.
The problem is, my dad is one of the worst impulse buyers I have ever seen. Looking back, this has always been the case.
What makes it worse is that Dad buys things in secret. And when he orders this junk, here come the catalogs and magazines that feed into more buying. He also gets political pamphlets and requests for religious contributions, and he usually gives a small amount. He will even give money from his pocket to anyone who asks.
I have talked and talked to him about these rackets out to swindle you out of every dime you have. How can I take control and stop all these advertisements and requests for money from coming? My brother lives in California, so I am the only child here for him and am the more assertive one. My dad is skeptical of me but listens to most anyone else. Please give me some advice because it will be left up to me to handle this. I am afraid a scam is just around the corner. -- Erin
Dear Erin,
Unfortunately, unless your dad starts showing signs of dementia, or you suspect he is a victim of actual fraud, you're not going to be able to "take control" of his finances. I know it's hard to watch him make bad decisions. But it's his money, and legally, he can spend it any way he wishes.
That doesn't mean you should stand by and watch as he spends or gives away every last dime. On the contrary -- it's time to start getting more involved as your dad gets older. If you wait too long, he may run out of money or even get into debt, and then his options for receiving care, should he need it, will be very limited.
Here's what you can do:
First, try to get your father to an elder law attorney. That's a lawyer who has take specialized training in legal issues concerning the elderly. There are locator services online from both the National Elder Law Foundation and the National Academy of Elder Law Attorneys. Let the lawyer, not you, break the news that he is burning through his money too quickly. He may listen to a neutral third party, especially one with credentials he respects. Try to bite your tongue when the lawyer's advice sounds remarkably similar to what you've been telling him for years. Look at it from his viewpoint -- how easily would you take advice from your kids?
This is a good time to confirm that your dad has an acceptable will and medical directives.
Next, make sure your dad has signed a power of attorney form. You or your brother will need one to pay bills and make other decisions when your dad is no longer able to. The lawyer can help you with that, also.
The elder law attorney should refer your father to a financial counselor who can help him create a plan to make his money last as long as he needs it and help him budget for discretionary spending. The counselor can suggest ways to help him control his spending by setting up an account, for example, that is just for charity, political contributions and all those "extras" he enjoys.
From now on, keep an eye on your dad. It may be hard to tell when he crosses the line from being a bit of a spendthrift and soft touch to being incapable of handling his finances. At that point, you will need to get legal guardianship so you can make sure he is taken care of. For help when that time comes, again, see an elder law attorney.
Keep your brother updated, even though he is farther away. It's important that he understands what's going on and can back you up if necessary.
Little by little, your dad is going to have to trust his children to look after his best interests. He's lucky to have you. Take care.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: July 16, 2010
Three most recent To Her Credit stories:
Can bankruptcy tap surprise inheritance? – Having filed for Chapter 13, a woman discovers a surprise inheritance and worries whether she has to turn over the funds to her trustee ...
Joint credit cards don't dissolve with divorce – Getting divorced? If you jointly share credit cards, be prepared to cancel those cards and dissipate the debt before things are finalized d ...
Do you marry someone who has big debt? – He may be Prince Charming, but marrying someone who is carrying a lot of debt can put a serious crimp in your ability to plan for the future ...
Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!
