My Dad Borrowed $50,000 and Paid Me Back. Why Was It a Complete Disaster?

Loan money to family

Here’s an unusual story: A woman lends a family member a boatload of money. He pays her back in full. With interest.

End of story, right?

Wrong. Read further.

[Read more…]

Would You Lie to Help Your Family Avoid Financial Ruin?

Short sale to avoid foreclosure

Here’s a recent email I received from Linda in St. Louis (not her real name or homeland, of course):

I bought your book last month and have given it to a friend, who will share it with her sister. My best friend could have used it ten years ago. Amazing how many stories there are.

She shared her own tale and later we spoke at length about how her close family relationships were destroyed by money.

[Read more…]

Would You Loan Your Family Money, Even If You Knew They Lied?

 

Lying woman wants to borrow money

The following blog post is part of the The Road to Financial Wellness  Blog Tour. Over a period of 30 days, the Phroogal team will go to 30 locations to raise awareness about financial empowerment. On June 6 they will be in the Washington D.C. area! Our goal is to help people learn about money by starting the conversation. We understand that local conversations can help bring about national awareness.

***

I met William when he was doing plumbing repairs at my home. I’ve got an old house, so plumbing issues crop up periodically. We started talking and he told me about his dysfunctional childhood.

(It always amazes me when people tell me such intimate details about their lives, and not just about money.)

[Read more…]

Your Long-Lost Rich Aunt Dies. You Inherit a Fortune. Now What?

 

inheritance

Have you ever dreamed that a wealthy relative died and left you a fortune? Nice fantasy, right?

It happened to David, an accountant who lives in Dayton, Ohio. He got a call from a lawyer in Cleveland. It seems that David’s late mother had a half sister named Lucy. David knew Lucy only vaguely; no one ever told him the family backstory, but bad blood flowed between Aunt Lucy and David’s mother.

Lucy had one son (David’s cousin) who dutifully set up a trust for the benefit of his mother. Unfortunately, her son never got around to changing the beneficiary in case he died before his mother.

Which he did.

Who gets the money?

When Lucy died, she had no other children, grandchildren, or siblings, so next in line to inherit were David and his younger brother. They were stunned to find out they were entitled to a windfall of “a considerable amount of money,” the lawyer said.

Six figures. Hundreds of thousands of dollars.

Aunt Lucy must be rolling in her grave.

What to do with all that money?

I asked David what he planned to do with the money. New house? Car? Trip around the world?

No, David’s an accountant, and fortunately he’s too practical to blow his fortune. When he gets the money in a few months (assuming there’s no challenge by an even more distant relative), he plans to stash it away and wait a year to figure it out rather than spending it all on luxuries. He’ll probably put it towards college costs for his young kids. Quite reasonable.

Lesson

Think of a relative who’s not exactly your favorite person. Now, imagine you worked hard and did quite well financially during your lifetime. You die and that person gets all your money and possessions. Can you see the look of glee on their face? They’re not going to turn it down, even if you disliked each other, right?

Lesson? Keep your will, trust, and other estate documents up to date. Name a contingent beneficiary for your life insurance policy and IRA and 401(k) accounts. Play out all the scenarios of what will happen if people don’t die in the “logical” order of oldest first.

Don’t inadvertently give yourself a reason to pirouette in your mausoleum.

What would you do if you inherited a fortune?

Subscribe to my newsletter (upper right) and get the inside scoop on stories like these.

Related posts:
You’re in a Coma: What are the Financial Consequences?
Wife Insurance
Did You Give Too Much Power in your Power of Attorney?

Update – Powerful Power of Attorney
Why I Refuse to be Co-executor of Your Will
The Gold Digger Who Would Murder for Money

Image © iStock.com/Franck-Boston

When You Die, You’re No Longer a Person

Death and dying

This post has little to do with financial issues, but I felt compelled to write it.

A dear friend was admitted to the ICU at a local hospital after an arduous battle with cancer. Her family lives on the West Coast and called to tell me that the doctors didn’t think she would make it. I rushed over to the hospital and sat with her for a few hours as she drifted in and out of consciousness. I’d like to think she knew I was there.

Early the next morning, I called the hospital to find out her condition. “We don’t have a patient by that name, ” they told me

“Of course you do. I was at her bedside a few hours ago,” I said, a bit annoyed about the bureaucratic inefficiencies.

My call was transferred to the medical unit where they told me she had been discharged. “Of course she wasn’t.” Now I was really annoyed. “She didn’t just walk out of there,” I snapped.

I tried, but I couldn’t deny the awful truth. My friend had passed away. I was the last person to see her alive, other than the medical staff. Now there was no record of her being a patient in the hospital.

When you die, you’re no longer a person.

PS: I did write on this blog and in Gold Diggers and Deadbeat Dads about “Serena.” She wanted me to be co-executor with her cousin of her estate. I told her I refused. I’d gladly serve as her sole executor or contingent executor. But there were too many potential problems that could arise by carrying out this critical task with a stranger. I was relieved that she named another friend as co-executor.

Image © iStock.com/peebert

Related posts:

Why I Refuse to be Co-executor of Your Will
You’re in a Coma: What are the Financial Consequences?
Did You Give Too Much Power in your Power of Attorney?
Update – Powerful Power of Attorney
Dying Words

One Book, Three Opinions

 

Gold Diggers and Deadbeat Dads: True Stories of Friends, Family, and Financial Ruin was published just a week ago!

I’m thrilled that three writers instantly wrote book reviews on their blogs, each from an entirely different perspective.

Accomplished personal finance writer Julie Rains took a unique religious look at how money can ruin relationships on her inspiring blog, Working to Live.

Free to Pursue‘s author F2P, an avid reader of many genres, somehow found time to write her review titled “Infidelity of a Different Kind That Can Hurt Just as Much.”

Doug Nordman of The Military Guide, who is a noted expert on all issues where money and military service collide, wrote the best one-line summary: “The book is a voyeuristic, slow-motion-train-wreck, schadenfreude read.”

Thanks for your support!

Have you read Gold Diggers yet? The paperback and ebook editions are available at Amazon.

Sign up for my mailing list (upper right corner of this blog) and get the inside scoop on the stories!

Update – Powerful Power of Attorney

Elder financial abuse victim who gave power of attorney to daughter

It’s almost a year since I met with Daniel. He wrote me recently with a detailed update on the story about his elderly mother and scheming sister Amy.

Their late father’s estate was opened and slammed shut by the Probate Court because Amy claimed Dad had more debts than assets and he had no joint bank accounts. But Daniel says he’s got evidence to prove that Amy blatantly misused her power of attorney to channel money to herself, and that their parents had joint checking accounts for many years.

[Read more…]

I Handed All My Money to the Handyman

loaned moneyWhy did an intelligent woman loan nearly all her money to a guy who was only in the Friend Zone?

There aren’t any easy or obvious answers.

Quite often we don’t understand why we do certain things with money.

Spend. Save. Earn. Waste. Loan. Borrow. Invest. Donate. Hide. Hoard. Give. Take. Splurge. Keep.

There’s a complicated hodge-podge of emotions behind every financial decision we make.

[Read more…]

A Golden Oldie Blog

Personal finance

UPDATE 9.3.2014: Voting has closed and this blog was selected as a finalist! Thanks for your support.

Dear Friends, Readers, and Perfect Strangers,

I’m asking for your help.

Soon I’m attending FinCon, the premier conference for personal finance bloggers and writers.

I know it sounds like a lot of dry, dull, snooze-inducing lectures about topics you’d rather not have shoved down your throat all weekend. Budgeting. Credit. Paying off debt. Investing. College loans. Retirement. Blah.

Instead, it’s a lot of fun hanging out with 500+ personal finance people who proudly proclaim ourselves as money nerds! [Read more…]

The Gold Digger Who Would Murder for Money

gold digger

An attractive woman in her mid-60s, Julie told me about her three failed marriages while we sipped hot chocolate on a wintery afternoon. The details of the first two are not important to this story.

Her third husband, Doug, was a real lady-killer.

She didn’t know he was a cold-blooded gold digger who would  murder for money.

[Read more…]