Sunday, May 9, 2021 is Mother's Day. In too many Texas homes, the day might be a bit cloudy if financial woes hang over Mom. A great gift for any mother is for an adult child to offer to help with finances and financial planning. Though many older adults are reluctant to admit to difficulties, the numbers show a serious problem.
According to the Congressional Research Service, real average debt among elderly households climbed from $29,918 in 1989 to $86,797 in 2016 (in 2016 dollars). Further, “the largest growth in the share of elderly households who have any debt was for those headed by individuals aged 75 and older.” If your Mom is a senior in that 70-80 age group, chances are that she is in the 61 percent of seniors carrying debt.
Seniors typically carry three major types of debt:
- Credit cards
- Medical bills
With debt comes a reluctance to discuss debt, even if it is adding to Mom's anxiety. Much of this comes from parents' natural instinct to protect their children. Some of it comes from embarrassment about getting into serious debt.
Mom may not realize how little of her difficulties come from her own actions. The end of pensions, the rising costs of healthcare, and the increasing age for receiving Social Security benefits are some reasons Mom may be crushed by debt.
Many families are shy to discuss parental finances. If you find your Mom resisting your polite inquiries, welcome aboard! As Forbes magazine described, “Most of us have tried to have conversations about finances with aging parents. Some stubborn parents just won't do it.”
The source of many parents' stubbornness is fear:
- Fear of being considered incapable by their adult children
- Fear of loss of respect and status
- Fear of losing control over their lives
- Fear of outliving their savings
Forbes suggests these three strategies to get Mom to the table for the discussion:
- Confront the fear — Mom fears being put in “the home,” a gloomy, Depression-era vision of senior living; she fears being taken advantage of by other adults, including her own kids; and she fears openly talking about emotions (viewed as a sign of weakness among her generation).
- Reassure — Show practical support for Mom by reassuring her that you will check in on her regularly (either by telephone or in person); make clear you will always help with reading financial documents, keeping her paperwork organized, and communicating with her accountant, tax preparer, and attorney.
- Offer practical suggestions — Little by little, venture into discussions of Mom's plans to deal with health emergencies, ending driving, and greater loss of independence; research senior living facilities and their costs and openly chat about plans to pay for needed services; these polite reminders can keep finances front and center in Mom's mind.
For many seniors, financial woes can disappear with loving support and practical help from adult children. Among the options:
- Creating and sticking to a realistic budget prioritizing debt
- Throttling back spending to a comfortable level
- Seek professional help with debt management
- Declare bankruptcy
Budgets and adjustments to ways of living may help, but what if Mom has already pared down her spending and still struggles with debt? What if Mom is already living virtuously, with no bad spending habits? As Mark Twain said, “She had nothing to fall back on. She was a sinking vessel, with no freight in her to throw overboard ...”
Professional intervention removes some of the emotion from the process. You can act as the adult child facilitating the expert's ideas, not originating them. Most financial planners and accountants, however, charge for their services. That only adds to the debt load.
Bankruptcy can relieve seniors of many problems associated with debt:
- Bankruptcy puts an end to creditor harassment
- Bankruptcy allows Mom to discharge unsecured debt
- Bankruptcy shields assets from creditors
Mom spent your entire life protecting you. Mother's Day is a fine opportunity to start protecting her, by offering help with her financial security. As Mom gracefully ages, she needs her home and retirement accounts protected from creditors, something that bankruptcy can accomplish when nothing else will.
Give Mom the gift of financial security this Mother's Day. Please contact a Frisco, Texas, bankruptcy lawyer at The Page Law Firm. For a complimentary 40-minute strategy session, call 214-618-2101 or email us at [email protected].