Giving Money Away
When I was a little kid I could always ask my grandmother for money. If I wanted money for pinball she gave me a handful of quarters. Pinball money won’t break a senior, but money for cars, rehab, and houses can. What are the issues? What do you need to know about seniors giving money away?
When It’s OK For Seniors To Give Money Away
My grandmother used to send my siblings and me twenty dollars for our birthday. For her it was a lot, but not enough to break her budget. Truth is, we all would have been equally happy with just the card. We kept the money, not because we wanted it but because grandma wanted us to keep it. We also knew she was frugal. She saved her money and didn’t spend frivolously. She also paid her own bills, balanced her checkbook, and managed her medications.
Carmen and I heard lots of stories like these during our research. But we also heard a lot of very different stories. Stories where grandmothers were not sending twenty-dollar bills in birthday cards to their grandchildren. Instead, grandmothers were sending hundreds, sometimes thousands of dollars to their family, friends, and community. Money these seniors did not have to spare.
When It’s NOT OK For Seniors To Give Money Away
People seeking money know that seniors are easy marks. As they decline cognitively, emotionally, and physically a senior’s ability to make good decisions decline. Many seniors also become isolated and lonely. People looking to exploit seniors, target seniors, for this reason. Scammers, criminals, and near-do-well family members target seniors. There are also good people that reach out to seniors for money.
When Carmen and I had an opportunity to investigate further, we usually found that seniors giving away lots of their money were having cognitive and emotional challenges. Many were in the early phases of Alzheimer’s or dealing with other forms of dementia. Others were unable to say no to family members in need of help.
Areas Where Senior Are Vulnerable
Seniors became especially susceptible to purchases, gifts, signing documents, and contributions in the following areas:
No righteous person wants to take money from someone at the end of their life. This is the time when they may need their savings most. Health emergencies can cost tens of thousands of dollars, and these types of emergencies are very common.
Violating Estate Planning
The simplest reason giving money away at the end of your life, outside of your estate plan, is bad, is that it screams incompetence. You have fifty, sixty, sometimes seventy years to plan how to distribute your money.
If you’re giving it away outside of the planning process, it begs the question why? Do you love one of your children or grandchildren more than the others or want to ensure they get more than the others? Is there an institution that you want to give your money to?
If so, you can handle these and any other issues in the estate planning process. Do you want to be seen as a solution provider and come to someone’s rescue? Why didn’t you do that when you were in better shape and the problem was manifesting. In other words, issues like people’s addictions and an institutions need for funds don’t materialize overnight. It happens over many years. It’s unlikely that in advanced old age you’re in a good position to assess what really needs to be done.
It Is Your Money
Your money is your money. You have the absolute right to do whatever you want with it. But if maintaining or preserving family harmony after you’ve passed is high on your priority list, making money distribution decisions at the end of your life can destroy this priority.
No one expects you to be giving your money away anyway. You may need it to survive.
Stay Within An Estate Plan
Outside Of An Estate Plan – Do These Things
Note: There are legal issues regarding how to modify a Will or Trust. Many changes must be made in writing, witnessed, and notarized. Voice and video recording may not stand up to legal challenges or be legally enforceable relative to making changes to your Will or Trust. That said, not all reasons for documenting by video or voice recording are legal. Reasons may also include you explaining your actions to family members and heirs.