Should You Get Involved If Your Sibling is Taking Money From Your Parents?
While it is not something we like to discuss in polite conversation, most of us have a relative that likes to take from others rather than work for a living. This occurs most often when an adult child habitually takes money from a parent. Even when the parent has willingly made gifts or loans to the adult child, it is not uncommon for an adult child to steal from a parent or use the parentís credit cards. After a parent dies, some adult children take property from their deceased parent's estate without authorization.
If you have a sibling who has repeatedly taken advantage of your parents, you may have decided not to get involved. When this occurs in families, the parents are usually willing participants in the adult childís behavior. Even if you try to speak to your parents or your sibling, you may determine there is nothing you can do. Most siblings who are financially independent decide they are not interested in receiving an inheritance from their parents anyway, so they decide not to get involved in a matter they believe is between their parents and their brother or sister.
As children, we do not want to get involved in the financial affairs of our parents. Most of us donít want to be at odds with our siblings either. However, even if you do not want to confront your parents about how much of their property they are giving to your brother or sister, it is important to understand the financial consequences of this family dynamic, especially if your parents are seniors. See
Getting a Conservatorship
Declining health or advanced age can make parents more susceptible to being taking advantage of by an adult child. If your parent is starting to be more forgetful, frequently loses important items or seems disoriented sometimes, you may need to determine whether your parent needs assistance managing his or her finances. To find out what can happen if you do not take action, see
Use Power of Attorney.If you are concerned about your parent's ability to manage his or her finances, you may want to start reviewing your parent's checkbook registers and bank statements to make sure your parent is keeping track of expenditures, depositing checks, paying bills on time, and filing income tax returns when they are due. If your parent seems overwhelmed by these tasks, it may be time to volunteer some help. If your parent is letting bills go unpaid or is otherwise failing to manage his or her finances, but refuses to let anyone help with these tasks, you may need to consider a
conservatorship.Although petitioning for conservatorship can be an unpleasant experience, it may be the only option to protect your parent. If a court determines your parent needs a conservatorship due to mental incompetence or incapacity, a guardian may be appointed to manage your parent's financial affairs. To learn more about how a conservatorship is granted in a particular state, go to
Reasons to Protect Your Parents' Assets From Greedy Siblings
While you may not want to inherit anything from your parents, there are several reasons to help protect your parents' assets and their estate from adult children who are taking money or property from them.
1. At least one of your parents is likely to need long term care, which is extremely expensive.
2. Because seniors are living longer, your parents may run out of money to pay their basic living expenses for housing, food, and health care.
3. Your parents may want to make a charitable gift to an educational institution, their place of worship or a favorite charity as part of their estate plan.
4. Your parents may want to contribute to college funds or leave an inheritance for their grandchildren.
5. Your parents may want to keep their farm, land, house or small business in the family when they die rather than having to sell it to pay their living expenses.
6. You may want to ensure there is enough property in your parentís estate to pay for a decent funeral, burial, and other final arrangements. See funeral and burial expenses.
No one wants to see their parents face these types of issues. Unfortunately, many seniors are going broke from paying the expenses of their adult children. When seniors suffer from dementia, Alzheimerís Disease or frail health, they are even more vulnerable. See dementia and wills.
In addition to running out of money to pay their own living expenses or nursing home bills, seniors in these situations face the prospect of leaving an estate with insufficient assets to pay debts. Most people do not want to leave unpaid debts behind, especially if they were responsible with their financial affairs throughout their lives. Also, debt collectors of the deceased often go after the adult children and other heirs to try to collect unpaid bills. See parents nursing home.
As you can see, there are many reasons to be concerned about protecting your parents' assets and estate. For a list of steps you can take to protect your parents' assets and estate from unscrupulous siblings, see greedy siblings.
If you believe your brother, sister or another person your parent trusts is taking money or property from your parent, you may want to take action to protect your parent. For an overview of how inheritance theft occurs and steps you can take to stop it, see
Debts Owed to the Estate
If your parent made loans to your siblings and those loans have not been repaid, you may have questions about how those loans will be handled by your parent's estate. For example, are the loans forgiven when your parent dies or will your sibling's inheritance be reduced by the amount of the unpaid loan? For information on how these issues are handled during probate and estate administration, see
debts owed to deceased.Another common concern is what will happen regarding loans to siblings if the estate is insolvent, meaning there is not enough money in the estate to pay
funeral and burial expenses, final medical bills, and other creditor claims. In addition to talking with your parents about how they expect your sibling to repay the loans, it is important to make sure these matters are addressed in your parent's estate plan, such as by making a will or amending an existing will. After all, gifts or loans to your siblings may reduce the inheritance received by other heirs. When a parent has made loans to one of their children, it may be necessary to address it in the parent's will to avoid other children receiving unequal shares.
Using a Power of Attorney
If you have started helping your senior parents with their finances, such as paying bills, buying groceries for them, and helping with doctor visits, at some point you may need to use a power of attorney. If your parent becomes incapacitated or is no longer able to make financial decisions, a durable power of attorney allows the person named as agent in the document to step in and handle important financial matters. For an overview of the reasons to make a power of attorney and how a POA is granted, go to
financial power of attorney.