Grandma's Got a Boyfriend
“Mother, you must be out of your mind!” Ellen Fulton's eyes blazed with indignation as she put down her coffee cup with a shaking hand. “He's the same age as your children, for goodness' sake! Have your little fling, if you must, but stop talking nonsense. Marriage, indeed! You can't be serious!”
Edna Hedley, still trim and smartly clad at age 67, stiffened and her carefully made-up face settled into a petulant pout. “There's no need to be nasty, Ellen,” she replied defiantly. “You're being selfish, aren't you? It's really about money, isn't it? You think Maurice is a fortune hunter. Well, you're wrong! He loves me! And that is all that matters!”
Ellen was speechless. She rose quickly, gave her mother a peck on the cheek and fled. Reaching her own condominium in the opulent gated community, she snatched up the telephone and called the family physician, also a trusted friend and, often, an advisor. When she finally reached Dr. Williams, she told her story. The kindly old doctor tried to soothe her nerves, but had no answer to Ellen's concerns about her own children's inheritances and her mother's welfare. He suggested she turn to a financial advisor for help.
Tread Lightly, Win Big
The vignette above has all the ingredients for a family disaster: love, loyalty, the family inheritance and a potential clash between generations. When a single wealthy parent decides to remarry late in life, adult children may have legitimate fears for the parent's well being. But they're also conflicted because they're in financial competition for the parent's assets. While the kids are fuming, the parent may be radiant — energized by feelings of love and companionship that may have lain dormant for years. Handling such a situation requires finesse and objectivity — and a good financial advisor can help provide both. If you handle the situation appropriately, you can emerge as a family hero and win additional referrals — here's how:
- Help the kids appreciate the good news
Aging parents suffer from fears of decline, dementia, isolation and loss of independence. A loving relationship is more potent than any drug to offset the inevitable impact of old age.
- Help protect the parent
The new companion could be a charlatan, even a fraud. Seniors are perpetual targets for all kinds of greedy people, and even a little discretionary cash or a Social Security payment stream can be attractive to an opportunist. A very discreet detective agency can provide a background check.
- Prenups are not just for the Trumps
A family attorney we know in Florida says he creates prenuptial agreements for seniors on a regular basis. Legitimate protection of assets is a critical component of effective planning, especially since those assets may be required to support as yet undetermined health care needs. If a relationship is headed to the altar, a good family attorney should be invited (and, incidentally, could end up being a terrific referral source).
- Living relationships need structure
A close personal relationship can improve both the quality and security of a parent's daily life. But legal complications abound, including state property laws dealing with co-habitation. For example, many continuous care retirement facilities will not admit unmarried couples. Again, a good family attorney can provide guidance.
- Plan ahead
Ask all of your best clients about whether their single, aging parents are seeking, or being courted by, suitors or companions. Most aging seniors have considered life without their spouse and we suspect any that have accumulated assets have a strong opinion about where those assets should go if they pre-decease their spouse. Trusts preserve the intent of the asset accumulator and can protect the family harmony if all parties understand the motivations behind the trust's creation and provisions.
As longevity rises, more and more seniors are apt to remarry following the death of a spouse. Be prepared to address the topic by discussing it with current clients and developing relationships with family attorneys who can help you provide solutions. Your professionalism in such a delicate matter will encourage client loyalty and impress the family's attorneys — and lead to further future business.
Please send your comments and recommendations to steve.gresham@phxinv.com.
Writer's BIO: Stephen D. Gresham is executive vice president of Phoenix Investment Partners. His new book, Advisor for Life, will be released in Spring 2007 by John Wiley & Sons.
Glen E. Gresham, M.D., is professor emeritus of rehabilitation medicine at the University at Buffalo, The State University of New York.
