Who would you trust to spend your hard-earned money?

It’s not if, but when, someone else will manage your finances

It’s inevitable! Unless you die penniless, sooner or later someone else will spend your money. And they won’t be asking you for advice.

If you’ve ever been the executor of an estate or assisted someone no longer able to manage their own finances, you know what I’m talking about. These people had their chance. They had plenty of opportunity to make arrangements. Whether you bless or curse their memory may depend on how well they prepared.

Over the years I have witnessed many difficult situations. Children falsely accused of theft by a paranoid parent. A daughter hesitant to tell her father, with the onset of dementia, that it’s time he got more help with his money. A wife who needed court approval to look after her husband’s financial matters after he suffered a head injury in an automobile accident. A couple forced to switch responsibility for finances due to Alzheimer’s.

Health issues are often the lightning rod for change. We have all witnessed those situations. Or lived them! I was a teenager when my father left me in charge of the family farm before he died in 1972 at age 52. As my mother’s financial guru for over 40 years I have dealt with everything from farming and charitable donations to planning where she lived after a debilitating stroke. Fortunately my 13 siblings looked after most non-financial matters.

There is a wide array of reasons why you may lose your ability to manage your money while you are alive. But death is certain. Taking comfort that “it will be someone else’s problem then” is a sentiment your relatives and friends are unlikely to share. They will have to deal with whatever you left undone due to laziness or procrastination, whether they like it or not.

What can you do to prepare wisely?

  1. Get your lawyer to prepare a Power of Attorney. Appoint an alternate as well, maybe two. The people you choose should be young enough to be there when needed.
  2. Ensure your will reflects your current wishes. Review it at least every five years.
  3. Discuss your finances with your family. Talk about “what if?” issues. Avoid secrets.
  4. Write a non-legal letter to your family. Be sure to include recommendations for charitable giving.
  5. Store your important papers in one place, along with a list of bank accounts, investments, etc. Include the location of safety deposit box keys and other important items. Review this list at least annually.
  6. Practice generosity in attitude, actions and charity. “Letting go” is easier if you’ve made it a habit long before.
  7. Last, but not least, cultivate friendships, the younger the better. Family. Relatives. Friends. Even a professional or two. Good relationships now will help make it easier for them to deal with your money and stuff after you are no longer able to.

You will die sooner or later, and you may need help along the way. Prepare now while you can; don’t risk your memory becoming a curse.

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About the author

Henry Friesen is a chartered accountant who lives in a small town near Winnipeg, Manitoba.

  • Ron

    Excellent article! Excellent advice! During my years as a lawyer, I was drawn into numerous estate disputes; most of which could have been prevented had proper planning AND discussions taken place IN ADVANCE (we’re not into seances nor is Canada Revenue a preferred recipient). A quote that I frequently share is “Those without Wills should include lawyers amongst their heirs”. And, even though your spouse may have been making all the right decisions for the past forty years, he/she does not automatically have the right to make your decisions should you become incapacitated.