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WHAT WAS MY DAD thinking when he asked me to help him and my mom with their finances? Did he expect me to give him money? Maybe.
Up until that moment, my dad handled the family finances. Both he and Mom were retired, though my mom still worked occasionally as an adjunct professor. My mom assumed things were okay, though I had my suspicions.
One day, I saw a credit card bill that showed a large outstanding balance, and only the minimum payment made. I didn’t ask my dad about this, but I was concerned. I didn’t want to confront my parents about the state of their finances. Experts say that children must be respectful and sensitive when asking about their parents’ financial affairs. I am respectful—sensitive, not so much. I brushed off my sense that things were awry and moved on.
Still, I’d been waiting for the day when my father would ask for help. My first step was to create a summary of my parents’ financial life. I gathered details on their income, mortgage and car, as well as bank and credit card statements, and tax returns for the past two years. I pulled their credit reports to ensure that I had everything. Finally, I drew up income and balance sheet statements for my parents, which I shared with both of them. Then I left their townhome and didn’t return for a week. I wanted to give them a chance to digest and discuss what I had gathered and presented.
When I returned, I asked if they had questions. They looked lost, without any spirit. I reassured them that, now that we all knew their truth, we could come up with solutions. The burden would be on all of us, not just on my dad.
I suggested filing for personal bankruptcy. My mom’s retirement benefit included legal representation, so off we went to see an attorney. He took our case, and miraculously found the best-case scenario. Due to their age, income level and household size, my parents’ unsecured debt—mostly credit cards—was discharged, meaning it didn’t have to be paid back.
My mom felt guilty. Most immigrants come to America to better themselves, not to declare bankruptcy. She believed she’d failed. I told her that many individuals and corporations declare bankruptcy. I pointed out that Chrysler went bankrupt, and yet the government bailed the company out so it could continue making cars. She quietly, reluctantly nodded her head.
After the dust settled, my parents never used a credit card again. They relied only on cash, personal checks and one debit card. My mom and I became more involved in managing their finances. And my dad? He retired from being the family accountant. He spent his time driving my mom to her various part-time jobs, while also picking up my son and treating him after school to burgers, pizza, fried chicken and Korean barbecue.
It has been 14 years since the bankruptcy and eight years since my dad died. I reflect on how much courage it took for my dad to confess that they had serious financial problems. It surely was difficult for him to ask his youngest son for help. I think my biggest asset during that time was staying calm. I didn’t yell, scream or blame. I didn’t ask how or why it happened. I immediately went into acceptance and then problem-solving mode. I think this was a relief to my parents. They didn’t have to explain their nightmare.
I’ve shared my own family’s financials with my wife and son. For validation and to learn of ideas that I may have missed, I’ve also shared our financials with a Vanguard Group personal advisor, as well as two other independent financial advisors. But for now, I still manage my family’s finances. Perhaps I’ll ask for help one day. Hopefully, it will be during a time of plenty rather than famine.
Venicio Navarro was born in the Philippines but grew up among the cornfields of Illinois, somehow surviving the heavy-metal rock music of his teenage years. He jumped into retirement and currently spends his time being a tourist, golfing and working on his health. Venicio’s previous article was Living My Beliefs.
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Surprised to see another Filipino, even more an author of one of the articles I’ve read. Born in the PI but coming here at the age of one, I have an interesting perspective of my parents. I’m glad your dad asked for help. I’m sure it set them up well and you also as it would have been a nightmare to try and fix this during much more difficult times.
Thank you for sharing what must have been a painful yet fulfilling experience . The story has nothing to do with bankruptcy , but the love of a son to do the right thing and the danger we all face as we get older and cannot handle our affairs, not matter how brilliant we think we are now.
Great Article.
As a CFP for over 30 years, I can attest to the difficulty children have discussing finances with their parents and with parents discussing finances with their children.
When my mother died in 2011, my dad was 86 years old. He had been managing their finances, with the help of a CPA for his taxes, all their lives. 100% of his wealth was invested in Mutual Funds. (EFTs where to “risky sounding” for him.) As I was helping him with my mother’s estate settlement, I offered to assist him with his taxes. For the next 7 years, until he passed away, I did his taxes and basically managed his finances, as he moved in with my wife and I within a year of my mom’s passing.
I had 2 living siblings when my dad passed and I was his executor. I assisted him in getting all his estate planning documents in order shortly after my mother passed. I made sure he got an updated Will, new Powers of Attorney for Financial and Medical issues, and a Revocable Living Trust, of which I was his successor trustee. I was also his executor for his Will.
For the last 4-5 years of his life, he kept telling me to rearrange his holding to better position them for our inheritance, but I refused. When one of my siblings attempted to influence him to benefit her financially, to the detriment of another sibling, I cut her off at the knees. I made it clear to both of them that NOTHING would be done with his portfolio until he passed. It remained invested for his benefit, not the benefit of his beneficiaries.
When he wanted to gift money to a grandchild or child, we discussed it. When I was convinced that it was his idea, I took care of it. (I was a signatory on his checking account and I was an authorized representative on all his financial accounts.) He had standard amounts for Birthdays and Christmas and I bought the cards and he wrote messages in them and I made sure the person to whom it was intended received it.
The reality of the amount of financial elder abuse in this country is staggering. I realize that not everyone has the education and experience to assist their parents as I was able to do, but we all have the ability to try to “do the right thing,” and it’s easy to see the actions of those with an agenda of self.
I am glad you were abe to help your mom and dad and that you had the strength of character to act.
Great article about such a sensitive topic.
I like that you did a comprehensive review of their situation and gave them the paperwork to ponder over time. You are a great son!
As we get older managing our lives can become pretty darned difficult. My dad was a whiz with numbers and never had signs of dementia but couldn’t handle the checkbook register the last few years of his life.
I think the lesson here is not to be afraid or embarrassed to ask for help.
I especially admire the way you stayed calm, didn’t question or blame, and gave them time alone to absorb the situation and, no doubt, grieve.
I agree. I would be blaming.
Thanks for your story. I can only imagine how stressful it must have been to force your parents to confront their mismanagement. It’s too bad they waited so long to ask for help, but I understand how difficult it must have been for your family to admit they were in trouble.
I give you credit for helping and tactfully handling your parents affairs, well done.
However, declaring bankruptcy is a cost to everyone else. Sooner or later those discharged debts, especially credit cards, come from other consumer pockets.
I’m not judging, but there’s a reason credit card interest rates are pushing near 28%.
At the same time, those credit card companies are more than willing to increase your credit limit, even if the customer is simply paying the minimum.
They want you to pay the minimum
They’re like (fill in the blank) drug dealers Jeff.
I admire the way you approached that difficult situation. Thanks for sharing your story.