Helping Family in Tough Economic Times

In planning for the future, we often want to help our heirs, including our children, nieces and nephews, and even friends.  The current recession, however, has interfered with those plans for many elderly people today.  The stock markets have plummeted and interest rates are paltry.  Retirees do not have future decades to make up for these huge losses.  Despite good intentions and responsible financial decisions over the years, many people have found themselves in an unexpectedly vulnerable economic circumstance where they are barely able to provide for their own futures, let alone the future of others. 

If you have found yourself in these unfortunate financial circumstances, you may need to reconsider your desire to leave a generous inheritance to your heirs.  First and foremost, you are entitled to your savings and should use them to meet your needs.  Taking care of yourself allows you the freedom to not be a burden upon your children or other family and this is itself a huge accomplishment.  Having extra funds to enjoy your retirement is not to be frowned upon either- after all those years of hard work, surely you deserve as much! 

Any parent understands the desire to help their children, financially and otherwise.  Like everyone else, adult children are likely hurting in this economy.  Your children may turn to you as a source of financial assistance to get through a loss of a job or poor economic decision. 

Before you hand over your retirement savings, consider first, whether can you easily afford it?  This desire to help is a natural wish for any parent but it should not be done at the risk of your own financial future.  In dealing with the elderly, we have seen too many times, situations where well-intentioned parents are left with nothing after a lifetime of work because they were compelled to “help” their adult children who have made bad financial decisions.  If you think helping them with risk your financial future, then you may need to tell them you simply cannot afford it. 

Second, know where to draw the line if you do decide to help financially.  The last thing you want to do is lose your life savings in the process of enabling your adult children.  Keep in mind that they are adults and your parental duty also includes teaching them to take responsibility and face consequences for their own personal and business decisions.  Your adult children should not feel entitled to your savings and you should not enable them to be dependent upon you. 

Finally, whatever your plans are, be sure to communicate your intent to your children.  The discussions you have should not be limited to the monetary inheritance you intend to leave alone.  Family keepsakes and mementos also have value, if not financial, then sentimental and your heirs should have an idea of who you desire to receive what. 

To discuss the future of your estate with elder law professionals, please contact Rooth Law Group today to schedule a consultation.