What Can You Do When an Inheritance Threatens Family Harmony? by Carrie Schwab-Pomerantz on Creators.com

Recently

Worried About Your Retirement Income? Dear Carrie: I'm 83; I have always invested; and now I want to make sure I have stable income for the rest of my life. Where should I put my money? —A Reader Dear Reader: This is a great question, especially in light of the most recent …Read more. Can You Take a Hardship Distribution From a 401(k)? Dear Carrie: I'm 57 years old and unemployed. I have $250,000 in a 401(k). Can I withdraw some of the money under hardship? —A Reader Dear Reader: While it sounds like you're experiencing a tough time, your age and the size of your 401(k) mean …Read more. First Job. First Financial Responsibility. Now What? Dear Carrie: I'm about to graduate from college and have landed my first job. It doesn't pay a lot, but it's in my field. From a financial perspective, what are my first moves? —A Reader Dear Reader: Congratulations on what sounds like a …Read more. Can You Protect a Senior From Internet Scams? Dear Carrie: My 75-year-old mother is pretty independent. She uses email and is comfortable online getting news and even making some purchases. Lately, she's been telling me about offers for things such as insurance and investments, and I worry she'…Read more.

What Can You Do When an Inheritance Threatens Family Harmony?

Dear Carrie: My elderly mother is very ill, and we don't expect her to live much longer. My four siblings and I have expected to inherit a reasonable sum, but I just saw a bank statement with a balance less than half of what I expected. One of my sisters has been managing Mom's money but never mentioned anything. I'm scared to bring it up with her or talk to my other sibs because I don't want to stir up a big problem. But I'm also really shocked and want to know what happened to the account. Help! —A Reader

Dear Reader: You're right that this is an awkward situation but your instinct to talk out what you saw is spot on. And I don't think you necessarily have to be afraid to bring this up with your sister. First, don't assume there's anything terribly wrong. Just tell her what you saw and that you were surprised, and see what she says. There may be a perfectly good explanation. Maybe she opened up another account or perhaps the statement you saw reflected only part of the assets.

But if there is a problem, your sister may be relieved to get it out in the open and even welcome your help. Tell her you want to work with her to find a solution — and that you want to include your other siblings in the discussion. Here are some practical ideas to help you get started.

START WITH THE BANK

Discuss your sister's relationship with the bank. For instance, who has been managing the assets? How often do they check in with her? What were the goals for the portfolio? What was discussed regarding basic issues such as risk, asset allocation and diversification? Does she know how often they rebalance? Also, look closely at management fees.

DO A PERFORMANCE REALITY CHECK

The market volatility of the last few years has taken a toll on many portfolios, so it wouldn't be surprising if your mother's assets have declined. The better question is how much they've gone down relative to market benchmarks. For instance, for large-cap stocks, take a look at the S&P 500 Index; for small-cap, the Russell 2000 Index.

Morningstar is a good resource for checking mutual fund performance.

Market fluctuations are a given, but if your mother's portfolio is significantly underperforming the appropriate benchmark, it's probably time to make some changes — both in the types of investments she has and perhaps in the management of her portfolio.

HAVE A FAMILY CONFERENCE

The way your mother has set up her estate and who has decision-making rights will determine how involved you and your siblings can be now. But whatever the circumstances, I think it's important for all of you to come together to discuss the financial reality and what you can do about it. Include your mother if she's up to it.

I'd start by looking at the history of the account, how it's been invested and the performance over time. Put everything on the table: the investment decisions and the changes you think could be made to improve performance. Make it clear that this is the time for solutions, not finger pointing. Enlist everyone's ideas and support. Then lay out a step-by-step plan so that you all have the same set of expectations.

CONSULT AND ADVISOR

Family dynamics around money can cause problems in the best of times. When emotions are running high, you have to tread even more carefully. If your mother or any one of you has a financial advisor you trust, it might be wise to enlist this person's help as a moderator for your family discussion. An advisor could help put your situation in perspective and offer solutions you might not otherwise consider.

Talking about money with family members is never easy but now's the time to pull together. I'm sure that's what your mother would want: to know you're there for her now — and will be there for each other in the future.

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER(tm), is president of Charles Schwab Foundation and author of "It Pays to Talk." You can email Carrie at askcarrie@schwab.com. This column is no substitute for an individualized recommendation, tax, legal or personalized investment advice. To find out more about Carrie Schwab-Pomerantz and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

DIST BY CREATORS SYNDICATE, INC.