Those ugly turkey vultures are quite ubiquitous throughout Southwest Florida. You see packs of them on the side of the roads picking at road kill. I suppose that they serve a useful purpose, disposing of the carcasses of various dead creatures big and small.
But family vultures are quite different. They’re not present in all families, obviously. Vultures can be found in just a few I would say. But when they’re present, someone has to stand guard.
While both Dad and Mom are alive and well, they circle patiently overhead, not making a sound. But then Dad dies, and when Mom’s vulnerable, you see them become more aggressive.
“My car won’t start anymore and I can’t afford a new one.”
“The kids’ private schools are so expensive, and I just don’t know how we’re going to pay the tuition bills.”
“I haven’t been on vacation in years and I’m burning out at the office.”
“Now that I’m middle aged no one will hire me.”
And so on. The vultures prey on Mom’s maternal instincts to take care of her children, even though those children are now adults and are quite capable of taking care of themselves. They knew that they couldn’t ask for money while Dad was alive, because he would say “No” and might even disinherit them for even asking.
But now that Dad’s gone, they look at Mom’s retirement account as a lump sum that can and should be shared by all. The vultures don’t realize that the corpus of the retirement account is necessary to generate annual income for Mom. Since yields are so low these days it takes a lot of money to generate even modest income.
I’ve seen the vultures swarm several times throughout my career. Mom’s financial advisor warns her that she really can’t afford to make such large gifts to her children without compromising her standard of living. Yet she does so anyway.
And I don’t mean to be sexist. Sometimes the surviving Dad is the one being preyed upon. More often than not it’s Mom, only because women tend to have longer life expectancies than do men, and as I said before, the instinct to assist even capable adults seems stronger with the parent who actually carried and gave birth to that person, even though it was several decades ago.
And sometimes the vultures sweep in while both parents are alive. Not too long ago I represented a long time married couple who were bled completely dry by one of their adult children. Even though Son had a job and apparently did reasonably well (or overspent) as he took vacations to Europe with his family. But Son also demanded that his parents pay for the plane tickets to bring his family of four down to visit, and expected Mom and Dad to pick up the tabs when they went out to eat, and for the family’s activities. This was on top of the annual assistance he said he needed to make ends meet.
Despite the pleadings of their professionals, including the CPA and the couple’s financial advisor, Mom and Dad couldn’t stop themselves from making large gifts to Son. When Daughter found out about it, she became terribly upset and frustrated, but there was little that she could do by that time. The damage had been done.
So what’s the answer? How do you protect yourself from a circling vulture?
That’s a complicated answer, since every family’s situation is unique. But there are some common threads. When your advisors are telling you that you really can’t afford to make gifts that your adult children request, the first line of defense is to say “No.”
But this is hard to do for many.
If you find yourself unable to say “No” when you know that you should, that’s the time to name a co-trustee in your revocable living trust who does have the ability to help you say “No” and will monitor your financial situation. That co-trustee might be a trusted son or daughter who won’t try to take advantage and will act as a gatekeeper to their vulture-like sibling. It could also be a trust company that can serve the same role in a less emotional and more impartial way.
When I mention professional management, oftentimes my client will bemoan the fees that they would have to pay. I remind them that they are likely already paying management fees of one sort or another, but even if they aren’t, paying 1% for someone to stand guard is better than losing large amounts to vultures whose appetite never seems to diminish.
If you suspect that you have vultures circling, please do yourself a favor and ask your team of advisors what steps you should take before you jeopardize your own financial stability.
© 2018 Craig R. Hersch. Originally published in the Sanibel Island Sun.