Dear Ask: My wife passed away two years ago. She always took care of the finances while I brought home the money. After we retired, I just wasn’t interested, so she did it all; but now I have to do it all. Many people are asking for money: school loan payoffs for grandchildren, contributions to many causes, gifts for specific purposes, endowments, charitable trusts, grandchildren trusts. Unfortunately, I bought a house for my daughter – well, I forked over a down payment, and now I find out that I also am on the loan, a $1.2 million loan. I just thought that I would help, but now, after she lost her job, the mortgage bills started coming to me. I told them “no,” but they said I’d signed for the mortgage. What can I do now? Am I stuck? And how do I handle all these requests for money? Signed: All Too Much! Dear All Too Much: Yes, it is all too much for anyone without some experience in financial management even if you are smart and successful in your own work. Taking on the reigns of your personal estate is a huge job in the middle of the emotions of your loss, especially if you have no training. It is the equivalent of riding in a steeplechase when all your prior rides were as a child on a pony. It is easy to err. Signing documents without understanding them can cost you a fortune. Unfortunately, if you signed as a guarantor on a loan, you are responsible, even if it was not your intention. What can you do now? Discuss with your daughter how long she thinks it will be before she is employed again. Talk about selling the house and moving into a more affordable place on her current budget. Then just do it. If you need to, get your advisors involved – a CPA, a financial advisor and an attorney. Get out of it as soon as you possibly can. Oh, and learn the lesson so you will not have to be in the same position again. No matter what your age, you can learn to manage your own money if you want. There are classes all around you, from university extension programs to adult learning programs, such as those at La Jolla Community Center or Oasis Mission Valley. You can find a thousand books on the subject in any library or on amazon.com. You do not have to learn it all at once, but making a practice of learning over time will help you help yourself for life. Your advisors are usually knowledgeable, and they welcome your questions, because they know that informed investors make better decisions for themselves. As far as requests for money: Many of my clients have put into place a systematic gifting strategy using discretionary money each year after figuring out how much they can afford without sabotaging their own financial well-being. It makes sense to understand where your charity dollars are going and what they are doing. We all have a personal mandate to give responsibly. For example, if you fund a scholarship for a worthy high school student to go to college, doesn’t it make sense to find out where they are going to school, what kind of grades they are keeping, what their plans after graduation are? It is good stewardship to follow the money you give in order to evaluate whether you ought to give again when asked. “What do you passionately want” is a great question to ask yourself when making your gifting plan. Ending world hunger/slavery? Education funding for students? Finding answers to diseases like diabetes, cancer, lupus? Supporting your church or missionaries? Helping your favorite museum acquire equipment? The list is endless but always needs to begin with your own interests. If you need help organizing, then ask your advisors. Several years ago, a client was in a similar quandary. After discussion, he decided to volunteer at the USS Midway. He enjoys talking with visitors from all over the world, proudly showing his book of growing up in the Great Depression and his 30 years’ military service. He is engaged with the museum’s mission to the world. Suppose you do all of these things and you just cannot stand taking care of all of these plans and details and decisions. Many people feel like you do, and they find an assistant or personal manager that can move your ideas into action without much more than your supervision. The amount of detail that you can set up to run automatically is nearly endless. You can automate bill paying, report electronically to your accountant, send birthday cards, place standard orders, put information on your calendar. It takes some time to set up, but the relief is worth the time. The bottom line, though, is that you are personally responsible for your wealth. How you manage it has impact on your family and on the society around you. Your family members are impacted because they see what you are doing and hopefully learn good stewardship themselves. Society benefits from your gifting. Your financial responsibilities do not have to be heavy burdens if you are willing to step up. Learn more all the time. Make a plan covering your gifting strategies. Coordinate with your professionals. Get involved so you enjoy the giving results. And if you still cannot take the details, hire help. Simple? Yes, but not easy. Find your courage, and know that you can do it! The Retirement Concierge offers estate settlement coordination assistance as a team member of attorneys, trustees and fiduciaries. We do not offer legal, financial or tax advice. We also wrote A 10-Step Action plan for Defining Your Mission, helping boomers on the verge of retirement to plan, make and manage life transitions by guiding them through a systematic process of discovery and re-creation wherein they write their own rules, make their own plans and reinvent their own lives. TheRetirementConcierge.com, (619) 818-8575.
