You aren't my dad's accountant, but you'd be better than him if you were 5 years old.
March 28, 2011 10:50 AM   Subscribe

My dad is about to inherit at least several hundred thousand dollars from his dad and I am extremely worried it will burn a hole in his pocket. How can I help him prevent this?

Literally within hours of my grandpa's funeral, my dad went to a car dealer and drove home a convertible to test drive. This is always how it goes with my dad. The prospect of extra money in his pocket creates a frenzied spending spree and he ends up with nothing. He has no savings, no retirement, no health insurance, no property. He is 60 years old.

Anything I try to tell him goes in one ear and later out the other. I am wondering about a strategy I can use to help him realize that he can leverage this inheritance to get everything he wants if he just uses it correctly.

One minute he will talk about buying a rental property, the next he'll talk about paying cash for a house. The next minute he'll want to put it in the stock market, the next he wants to give it away. It's so frustrating.

I am looking for articles, tips, personal experience, etc, in dealing with parents who have no financial responsibility whatsoever.
posted by thorny to Work & Money (29 answers total) 5 users marked this as a favorite
You're dad's been irresponsible with money all his life. He's not going to start being responsible at 60. You can't change him. The most important thing for you is to make sure that you're not going to end up financially on the hook for him at any point in your life.

Here's one idea, though. Point out to your father how much income he would earn each year if he invested this money in a low-risk portfolio, and drew down the balance over a 20-year retirement. I bet you he'll be surprised to learn how difficult retirement is going to be, financially. Then ask him to imagine retirement if he starts spending the principal on convertibles.
posted by Dasein at 10:59 AM on March 28, 2011 [12 favorites]

I know this isn't helpful, but my experience with parents who have no financial responsibility whatsoever is that this doesn't change no matter how much or how little they have, and no matter who says what to them. The best thing you can do is to be firm when you state that you will not be helping him out when he needs money in the future, and wish him the best. After all, it is (will be) his money to do with what he wishes.
posted by archimago at 11:00 AM on March 28, 2011 [2 favorites]

Could you get him to sign over half of it and invest it for him?
posted by fenriq at 11:02 AM on March 28, 2011

Tell him you know someone on an online forum that has a bridge that needs repairs. In fact, if he finances those repairs, he will actually become the OWNER of said bridge.

Really, the only thing you can do is to have him sit down with a financial planner. I am guessing that all of the taxes will have been paid by the estate before the money is turned over to him so it is his to waste any way that he wants.
posted by TheBones at 11:04 AM on March 28, 2011

Agreed with those above. Maybe you can get him to set up an RRSP with some of it by selling it to him in his terms - "if you put in x amount of money you'll be able to afford a steak every day after you retire!"
An RRSP would be the only thing I could think of to help save some of it to keep him comfortable later.
posted by L'Estrange Fruit at 11:04 AM on March 28, 2011

Use the Clark Howard windfall strategy. Tell him to take 10% of the windfall and blow it on toys so that he gets that part out of his system, and then invest the rest wisely.

Of course, as those above have pointed out, he probably won't listen to you anyway.
posted by Lokheed at 11:05 AM on March 28, 2011 [1 favorite]

Get him to talk to a financial planner. And though annuities are generally a bad investment over the long term, they are pretty good vehicles for stopping you from spending all the money at once.

Barring that though... it's his money. Not yours. If he wasn't responsible before, it's unlikely that he'll be responsible now.
posted by valkyryn at 11:12 AM on March 28, 2011 [1 favorite]

How is your relationship with your father? Do you get along? Does he trust you?

I agree that your father is not going to change. That said, would he be willing to give you some of the money to invest for him? If you could get him to give you a couple of hundred thousand dollars, you could invest it conservatively and have it available for him later in his life when he needs it.

I know someone who did this. His father wasn't profligate, but he also wasn't a good investor. He gave his son about $100K to buy and manage mutual funds and stock for him. The son did this, and it turned out to be an important component of the father's retirement savings.

In your case this could be a risky strategy. It sounds like your father might demand it all back one day, on short notice, so he can buy a house or a Rolls Royce or whatever. But if you think your relationship could handle that possible strain, this is one strategy that would get a chunk of the change out of his hands and into hands that are more responsible.
posted by alms at 11:17 AM on March 28, 2011

Consider talking to a financial planner yourself first. You can give them enough info about your father's state of affairs as well as his habits that they can come in to their first meeting with him with more-or-less a concrete plan laid out.

Also consider that he may choose to do whatever he wants anyway.
posted by mkultra at 11:17 AM on March 28, 2011

You probably can't do anything, but I would sit him down, as Dasein says, and make it very clear to him that he needs to put this money towards his retirement and financial stability because regardless of how he spends his money, you will not be taking care of him financially in his old age and this is probably his one and only chance to make up for years of being financially irresponsible.
posted by whoaali at 11:19 AM on March 28, 2011 [2 favorites]

By the way, I disagree with those who say your dad should meet with a financial planner. It seems unlikely that that would help. It sounds like he needs a rep payee more than a financial planner. What I was suggesting sort of puts you in that role, for some portion of the funds.
posted by alms at 11:20 AM on March 28, 2011

I used to be irresponsible with money, and now I'm not. I can look at a large bank statement and not think about all the stuff I could buy with it.

Sure, get something for yourself. Why not? The 10% strategy might work. Just get him to put his money with a respectable financial person who will know what to do with it. Actually accomplishing that? I can't help you with it. But people can change.
posted by Threeway Handshake at 11:20 AM on March 28, 2011 [1 favorite]

You've talked to him before about it, and it hasn't worked, so try a different approach. What was the situation then, and what did you say? How did he reply?

What was he doing for money previously? How was his quality of life? Has he asked you for money, or do you see that happening in the future? Do you fear becoming his caretaker on your own dime some time down the line? These could be things to talk about with him.

But when you do talk to him, remember it's his money at this point. Try your darnedest to remember this is about his well-being, and that you want him to be comfortable in the long-term. Try to set aside your annoyance at his use of money, and try not to talk down to him. He's made it this far in life, probably without your help (or if you did help him financially, don't hold it over him).
posted by filthy light thief at 11:22 AM on March 28, 2011

filthy light thief: Do you fear becoming his caretaker on your own dime some time down the line?

This. Make sound financial planning about making sure you can take care of him because if he doesn't deal with the money correctly, you won't be able to. Lay it on about how you're panicked his eldercare needs may well bankrupt you.

If none of this works, encourage the house paid in cash. It's a good time to buy, the asset will be preserved* and likely appreciate, and later if you need a power of attorney for your dad, you can sell it to pay for residential care.

Assuming - ha! - no second mortgage.
posted by DarlingBri at 11:33 AM on March 28, 2011

Anything I try to tell him goes in one ear and later out the other.

It's important to know WHY. Is he like this with any subject? Only about finances? Only with you? Does he trust you? Is he just really stubborn? Was he denied things as a child and wants to make up for it now? "Tell him to go see a financial planner" is useless advice if he won't listen to you. You need to understand why he isn't listening to you, and modify your approach accordingly, or have someone else talk to him.
posted by desjardins at 11:45 AM on March 28, 2011

Nobody likes to be told they aren't doing something correctly, or that they can't have fun - and I imagine that it's extra not good to be told that by your child (grown or not). You will not lecture him into accepting advice on this, I can almost guarantee it.

I'd approach it like this - I know these are your decisions to make, but I like looking into financial stuff and I had some ideas you might want to think about, and I think it would be cool if we could work on it together if you want.

Then, what's your plan? Lay it out first for yourself, and in some detail, and then pull out the high points to give him and not lose his attention (but have the detail to back it up if he wants to talk more). Like okay, you can definitely get that convertible, which would be a lot of fun - and then if you took the bulk of the rest of the money and invested it, here's an idea of what that would look like. Show him.

I imagine it's frustrating to see ways that he could be managing things better - but just a heads up that that tone comes out in your post, and it might come through to him, and if he feels bad then he's not going to be receptive to talking about your approach.
posted by mrs. taters at 12:03 PM on March 28, 2011

I have a parent like this and I have told her to never, ever share any financial information with me. Her household income is 200k plus/year and she spends all of it and more in a low cost area of the country. If she emails me about a house she wants to buy when I know she'll be moving money around with balance transfers just to pay this month's bills, it drives me nuts. She doesn't listen and for my own sanity I limit my involvement. I don't take gifts from her. I don't listen to the bragging or the worry. I just let it go.
posted by the young rope-rider at 12:09 PM on March 28, 2011 [1 favorite]

Response by poster: Thanks for the tips so far.

I would say he's definitely a combination of stubborn and emotional. Depending on how much coffee he has had that day, he might decide to do one thing or another.

I do agree it's HIS money. I do agree he WON'T likely change. One thing that came to mind was that he is fairly generous to my sister and I. Reading this discussion made me think that if he gives me ANYTHING as a result of this inheritance, it's going into a low risk investment so it can be spent on him later if necessary -- still under my control, of course!

I like the Clark Howard tip. I will try to find that and at least send it to him...
posted by thorny at 1:15 PM on March 28, 2011

So, Dad, Can we talk? You're getting closer to retirement age, and you're about to come into some money. Golden opportunity for you to do some investing. I'd really like to help you do some safe investing. It would set my mind at ease to know your health care and other needs would be covered. What do you say?

Nothing else you can do. He's a grownup. It's his money. Yeah, this sucks.
posted by theora55 at 1:39 PM on March 28, 2011 [4 favorites]

This question concerns your father. He is an adult. He was an adult before you even came into being.

You are not responsible for him.
You are not responsible for him.
You cannot make him be responsible.

Do not attempt to solve this problem. Let it go.

Do not offer to manage the money for him. You will both end up hating each other when he is resentful of you because you don't disburse it to him when he wants it, and you will be mad at him because he's just as irresponsible as ever.

If some of the money does come your way, put it away for your own financial well being. Your father is an adult and adults understand that their actions have consequences. If he ends up in dire straits as an elder, he made the choices that led to that outcome. (Not that everyone who ends up impoverished as an elder deserves their bad fate--but if he's coming into money late in life with no retirement savings and does squander it all, well, what can you do?)

Do not assume this responsibility. It can do you no good at all. Really. Let it go.
posted by Sublimity at 1:42 PM on March 28, 2011 [2 favorites]

Dad likes to spend money, huh?

So give him something to spend money on.

For example, your new business. Or this great investment you heard of. Or some artwork that'll appreciate in value.

In other words, find something that has some investment potential but that "feels like" (offers the same emotional rewards to your father as) spending.

You dad gets his endorphin kick from spending, you see to it that the money isn't completely wasted.

Example: in ten years the convertible is worth 10% of its purchase price. If you get him to invest in antiques, or oil paintings, or a house at the beach -- and these things don't appreciate in value at all, or even lose value, you're still ahead as long at it loses less value than a convertible! If in ten years the beach house is worth only 80% of the purchase price, Dad can liquidate it for a lot more than the convertible.

So let him spend, but channel the spending at stuff that retains some value. The psychological thrill for Dad in spending is going to be the same, if you spin it right.

(Or get him into spending that takes effort, like finding some inanely specific form of antique that requires lots of leg-work to find. Again, for you, victory isn't getting him to be responsible, it's limiting the hemorrhaging.)
posted by orthogonality at 1:44 PM on March 28, 2011 [4 favorites]

This could be my father. He'll be 60 soon.

He inherited a few hundred thousand dollars when my grandfather, an salesman and a smart investor, died. He quit his job as a printer and didn't work for six years. We went on a bunch of vacations and I got amazing clothes. He paid out of pocket for my bachelor's degree. I'm grateful for the latter two things, but neither of them make him any less irresponsible. He's had a spotty job history for his entire life, and he has a law degree he never used. Now he works at a call center.

Worst of all, he lives in an apartment in Appalachia. He kept saying he was going to buy a house, but he never did. I'm not going to inherit shit, and I would have used the money to start a business. It's not fair.

I won't give him a dime, ever. You don't have to either. Really, your parents are not your responsibility.
posted by CorduroyCorset at 1:52 PM on March 28, 2011

You are not responsible for him.

Is that actually the case? I thought that filial responsibility was making a comeback.
posted by a robot made out of meat at 1:53 PM on March 28, 2011

Response by poster: "Just let it go" could be framed as a short term solution to what I am concerned is a future problem. I don't understand how letting it go now will benefit that future me who WILL be concerned about his well being, particularly at end-of-life or other times when he might need money.

If I "let it go" now, then I have to be able to "let it go" in the future. Fast forward to 20 years from now and I'm posting on MeFi about how my dying father can't afford quality care and I doubt many people would just say, "Let it go."

I don't want to kick myself later because I just let it go. If this were a drinking problem, an intervention would be at hand.
posted by thorny at 2:06 PM on March 28, 2011 [2 favorites]

Could you consult a lawyer to see how you could be affected if he does turn out to be truly indigent?

Other than that I don't know if you can do anything.
posted by St. Alia of the Bunnies at 2:11 PM on March 28, 2011

But as with a parent with a drinking problem, you can't forcibly keep them away from alcohol. If someone doesn't want to stop drinking/spending it's damn near impossible to stop them. It sounds like you need to do as much as you can to persuade your father to be responsible (if only for the sake of your conscience), but there may come a point where you have to let it go.

I think that you've got a good idea about making sure you invest any money he does give you (and maybe you could also suggest this to your sister if she would be supportive). If he doesn't listen to you, is there anyone he does listen to who you could enlist to give some sensible advice?
posted by *becca* at 2:18 PM on March 28, 2011

I suppose you could ask him to price out long term care insurance for himself, as a gift to your future self.
posted by pwnguin at 3:26 PM on March 28, 2011

Tip from someone who has been there: don't make it about you. Financially irresponsible people tend to be slightly greedy and project their greed onto others. So while your motivation is probably completely altruistic, he may see it as you trying to preserve "your" inheritance.

My advice to my dad was and is: "I hope you like eating cat food, because that's all both of us will be eating if you run out of money and need my help."

I failed at this, but it always seemed to me that the best option is for them to own a house (or condo or some 55+ facility buy-in) free and clear. Nobody can take it, and he can reverse-mortgage it if he has to. It is a lot easier to feed a retired person than it is to pay rent for them.
posted by gjc at 5:02 PM on March 28, 2011 [3 favorites]

My dad was in a similar position about 9 years ago, albeit with significantly less money (in the 10s of thousands rather than 100s). He has never been particularly good with his money, and he more or less blew through his entire inheritance -- the only one of significance he is likely to receive -- in under a year. Nothing could convince him to deal with it responsibly. Despite coming up with his own 'annuity' schemes or having someone investigate investments, etc. he just couldn't help himself and, being an independent man with no one to answer to, he felt entitled to spend it as he wished (even though he pissed most of it away on loans to "friends" that would never be repaid).

I wish you luck in convincing him, because maybe your father is different enough from mine that you'll get through to him. I hope you aren't forced to simply let it go, because it's what I'm still struggling to do with my father's situation as he ages and deals with his health problems. But I tell you my own story because I do think it's a real possibility you may have to face that.
posted by asciident at 9:51 PM on March 29, 2011

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