OWN YOUR FINANCESMarch 24, 2010
MONEY, POWER AND YOUJuly 4, 2010
In the next few years, those who make up the Baby Boomer generation will become the largest demographic in North America. Our senior population is about to explode. Are we ready? Are they ready?
In the 1940’s when our Baby Boomers were born, life took on a simplistic yet male dominated approach to everyday living. The wife took care of the children, while the husband went out to work. As times changed, and women took on a central role with both the family and the finances, many of our Baby Boomers did not adjust with the period. In fact, taking on a rather rebellious stance, numerous Baby Boomers aged into adults and now seniors who decided to stick to the old ways of managing their household.
What does that mean? Who does it hurt if only one person was in control of the checkbook? Everybody. Now, when I say in control, I mean that the other spouse remained oblivious to the family’s finances. So let’s take a husband and a wife for example. The two have lived a long life together. They have three adult children who each have families of their own. From the on start of their marriage Mrs. Boomer was content to let Mr. Boomer handle all of those pesky finances. Heck, she had a house to run and that took up all of her time. Life takes a sad turn and Mr. Boomer has passed away. The kids surround their mom, during this horrific occasion. But life is about to get much worse.
The kids ask Mrs. Boomer if there was a will, was the mortgage paid off, did they have insurance, where do they bank, to which Mrs. Boomer breaks down crying. She does not know the answers to any of their questions. Mr. Boomer took care of those matters. After a few days of digging through boxes, and drawers the will is found, with the number to a lawyer.
From the meeting with the lawyer, the family discovers that Mr. Boomer took a second mortgage out on their home a few years back to help one of their adult children who was going through a difficult time. The other family members did not know of this. Mr. Boomer did not take mortgage life insurance, but he did leave a life insurance policy for $35,000. The second mortgage was for $95,000. Mrs. Boomer, who never worked outside of the home, or held credit in her own name, will not be able to qualify for a mortgage for the home she has lived in for over 30 years. Her children cannot afford to take on the property so the house will have to be sold. Mr. Boomer did leave a small pension, but after lawyer fees, real estate fees, probate fees, the balance at the end is minimal. Yet, the children are adamant on receiving their share.
Mrs. Boomer’s portion would cover rent in a small one-bedroom apartment, but she does not want to live alone. Each adult child offers their explanation as to why Mrs. Boomer should not live with them. The children decide that a nursing home will provide the care she that she needs. But the question is raised, who will pay for the home? What happens next will break your heart. Mrs. Boomer is dropped off at a government run nursing home facility. Left to fend for herself, for the first time in her life. If this was simply a work of fiction, I would be appalled. Sadly this story is true. This is happening right now, and with increasing frequency.
Whose responsibility is it to take care of our elders? In my next post I will touch upon a few easy ideas that if implemented early, may help you and your loved ones avoid Mrs. Boomer’s fate.