Taking Money From A Parent
Most parents have spent their lives taking care of their children. As a child, after being cared for all those years, should you consider taking money from a parent when they’re old? After all, when they’re older, they’re usually weaker, and more in need of their money. What are the issues? How do you address the issues?
What Does Taking Money From A Parent Mean?
In this article, we’re talking about a specific type of taking money from a parent. It covers:
We’re not talking about using g your parent’s money for your parent’s needs. Or for performing tasks that help them with their needs. For those issues see our Section Using Parents Money here.
Transfers Occur Outside Of Normal Estate Planning
The focus is on transfers that occur outside of normal estate planning procedures. Gifts to family and others are easy to incorporate in the estate planning process. When they occur outside of this process, they affect the estate plan. The focus is also on seniors that transfer this money without documentation or consultation with their estate planning professional. Finally, we’re not concerned about seniors who have large amounts of savings enabling them to live the last few years of their life in comfort: seniors with more than $1.5 million going into these years.
Transfers Were Often Made To One Child, While Other Children Were Helping The Same Parent
The final observation and the one that surprised us most was that many of these transfers took place despite one or more of the children or grandchildren giving money to the senior because they believed the senior needs money for day-to-day expenses. In other words, while one or more family members are receiving large sums of money from a senior, other family members are giving money to the senior because they believe the senior is in financial distress. When Carmen and I were both able to verify a situation of this type, and then were given the privilege of asking the senior their reasoning, we heard variations of the following:
These Types Of Transfers Occur Frequently
One of the most surprising things Carmen and I discovered in a decade of research was how frequently money moved during a senior’s last few years of life. We found about 20% of seniors, or family members of the seniors, revealed money transfers to other family members or friends. Considering people’s reluctance to discuss money issues, especially those they may be embarrassed about, Carmen and I believe the percentage of seniors moving money in the last few years of their life may be closer to 30 or 40 percent.
Common Areas Where These Transfers Go
Here are where some of the money transfers went:
CarePlanIt Best Practices
Other Resources On Taking Money From A Parent
Interesting take on taking money from a parent here.
Learn about the complications when children take money from parents here.