MoneyWise
By Christy Bieber
September 27th, 2024
When people inherit a sizable chunk of money, it’s often assumed that they’ll eventually leave a legacy behind for their adult kids or grandchildren.
Unfortunately, not everyone uses a financial windfall wisely. Instead some people make really poor decisions. In fact, according to the National Endowment for Financial Education, an estimated 70% of Americans who receive a sudden windfall will lose it all within a few years.
Let’s say your 65-year-old mom inherited $450,000 after your father’s passing. But instead of investing wisely, she’s already lost thousands due to a gambling addiction. So, what do you do?
My mom, 65, inherited $450K when my dad died — but now she’s hooked on slots and burning through the cash. How can I protect our family’s assets before it’s too late?
Short of an intervention that addresses their gambling addiction — which may or may not work — there are a few steps you can take if you find yourself in a similar position with a parent.
Signs your parents may need help with their assets
Aside from the possibility that a parent may be squandering their money, there are other red flags you should consider when it comes to helping them manage their finances in their later years.
For example, seniors are often the prime target of fraudsters. Common tactics may include mortgage loan scams, electronic “phishing”, threatening phone calls, and online dating cons, among others.
Even if you don’t think your parents are susceptible to fraud, have an honest conversation with them anyway about possible signs they should look for and the methods commonly used.
Additional signs your parents may need an assist in safeguarding their assets include, evidence of unpaid bills, unusual bank account withdrawals, or spending large amounts of money, such as the aforementioned gambling, or gifting it to unexpected people.
If your parent recognizes that they have a spending problem, but can’t — or won’t — stop, see if they might be willing to take other steps to protect some of the money, such as putting it into a trust and naming a trustee to manage the funds.
