The Bank of Mom and Dad – Crossing the Line into Elder Abuse
Ever consider that you, the parent, may be the victim of your child’s greed? It may be time to think about it.
As a parent, you have the legal and moral obligation to nurture and financially support your child from birth until he or she reaches 18 years of age. After that, your legal obligation (absent a court order) vanishes.
You may, of course, voluntarily agree to continue paying your child’s bills or giving your child money. Socially, it is acceptable to pay for a young adult’s college expenses, to continue to carry your child on your insurance, even to continue providing an allowance and housing while your child is transitioning into a job. That should be a conscience decision, however, with given parameters and an eye toward your bottom line. Your money is all that stands between you and poverty; you can’t give it away without suffering the consequences.
Which brings us to the issues of family theft and fraud. We’ll use three common scenarios, for which we’ll assume your age is 78, and your child’s age is 50. At that age you are most likely retired with a fixed income and your child has had ample opportunity to become independent.
In the first scenario, your child moves in with you, does not contribute towards living expenses, talks you into giving access to your bank account and investments, and then works to isolate you from friends, relatives and your support system. The result is that your savings are drained and you become a prisoner in your own home.
In the second scenario, your child talks you into a risky investment. This is characterized by little or no paperwork (or a deluge of paperwork that is not independently verifiable), ambiguity about the type of investment, unrealistic promises for your profit, and a business entity that has no real assets. The result is that you lose all of the money you handed over.
In the third scenario, your child just asks you for money. This is usually connected with a play on your emotions. It is always followed up with additional requests until your savings are completely drained.
If any of the three scenarios came from a stranger, you would call it a scam, theft, fraud, or worse. Coming from your child, however….
How can you protect yourself? Where money is involved, approach the transaction as if your child were a stranger. If you have someone move into your house, then you would want a written lease. If you are considering an investment, then you would treat it like a business deal – look at financials, do a background investigation and analyze the risk. If someone just asked you for money, you would first look at the impact on your bottom line. If you decide to go forward, then you would decide if it was a gift or a loan, and paper it down accordingly.
Still difficult to say no? Find a good lawyer, CPA or financial adviser, and involve that person in your decision-making process.