Welcome to Ask the Bills, where every two weeks Helaine Olen answers readers’ questions about their most nagging personal finance and financial etiquette dilemmas. Seeking advice on a money issue? Email firstname.lastname@example.org.
A few years ago my father-in-law’s life started unraveling. He and my mother-in-law had a nice but not outrageous house, vacation homes, and nice cars. They should have been set. But it turned out he had made a bad real estate deal and lost a mid-six-figures sum. Then we learned he’d been having an ongoing affair and had spent six figures on that, too. He’d been gambling and going to fancy restaurants and strip clubs with business associates. His credit-card debt is in the mid–six figures. He transferred money from his youngest son’s account into his own, and he took from retirement accounts too. Now he and my mother-in-law are broke and working through bankruptcy and divorce, though he’s dragging his feet. My mother-in-law will be fine: She works part time, has a pension, and the children are doing well enough to help out. My father-in-law still makes enough that if he went through bankruptcy and lived frugally, he would be able to pay off his remaining debts and put some money aside for retirement. But he won’t stop spending. We’ve been trying to find modestly priced apartments for him, but he just comes back with a place that’s bigger and more expensive than he needs. At one point he was taking a bus to a casino and gambling; my mother-in-law had to cut off his line of credit at a couple of casinos. She’s got a tight control on their accounts now, but it’s a constant struggle to make sure he’s not opening new credit cards or transferring money out. He’s burned everyone, over and over again. He’s got zero self-control and an entitlement to live in a way he can’t anymore. He’s like a drug addict but with money. There’s probably an alcohol-abuse issue too, but not a debilitating one. He’s in therapy, but no one is convinced it’s working. What can a family do?
I can toss out a few theories. Maybe, like you sort of suspect, your father-in-law is an alcoholic. Maybe he’s a gambling addict. Perhaps he’s a narcissist or suffering from another personality disorder. Most likely, he’s some combination of those things. But unless he recognizes there’s a problem and agrees to seek serious help, your options are quite limited—unless, perchance, he gets busted for drunk driving and is ordered by a court to attend a 12-step program or rehab center. Even then it might not take. Yes, there are treatment centers (both in-patient and out-) for people with compulsive-spending issues, not to mention Debtors Anonymous and Gamblers Anonymous. But since you brought up alcohol, I’d suggest the family start there. If he’s indeed an alcoholic, I can all but guarantee you that treating the compulsive spending or gambling without addressing the underlying substance addiction is a waste of everyone’s time
One way to start is for all of his children to sit down with Dad. They shouldn’t think of it as an intervention, though that’s what it is. If possible, they should try to use his own words of remorse and worry to convince him to accept help. But they may need to take a tougher stance. Your father-in-law sounds like a very troubled person, and likely not a kind one. Remember, he carried on a long-term affair behind his wife’s back while draining their joint assets and illegally accessing a child’s savings! (On that note, if your mother-in-law doesn’t have her own separate attorney for their joint bankruptcy filing, New York divorce attorney Casey Greenfield says she needs one yesterday. Ditto for the divorce.) A parallel strategy could involve the son whose accounts Dad tapped. Did this happen recently enough that he could threaten to file charges unless your father-in-law enters treatment? And could he even bring himself to do that? (The child who will actually tip off legal authorities to theft by a parent is a rare one indeed.)
What if all this doesn’t work? Many interventions, no matter how well-staged, don’t. Then your spouse and siblings-in-law can only control their own behavior. No one in the family should offer your father-in-law anything that could be construed as financial help, even helpful budget advice. Don’t try to find him an inexpensive car or a reasonably priced apartment. To do this is to enable abusive and addictive behavior. Until he admits he has a problem, he needs to stand or fall on his own.
One final note: I suspect all the children of your father-in-law could benefit from attending Al-Anon meetings. You say this is a recent unraveling, but I would guess they’ve been dealing with their father’s troubled personality their entire lives. They need to talk to people who can offer support because they’ve lived the same experience.
My father recently received an inheritance. He intends to spend part of it on a house, and I assume save the rest for his retirement, which is eight to 10 years away. Here’s the issue: My dad has bipolar disorder. The condition is under control with the help of medications, but he has experienced severe manic episodes in the past that have caused him to become impulsive and reckless, financially and otherwise. He’s made big, impulsive purchases like a riding lawnmower; taken impromptu trips with no plans to return; and stolen money from his own children’s piggy banks and savings accounts after getting cut off from family finances. He’s divorced from both my mother and my stepmother, and I’m wondering what I can do to protect him and our family if he experiences another manic episode, especially now that he would have access to more money. I want to make it clear to him that I have no intention of interfering with his finances unless absolutely necessary, but I would want to limit his access to his money if he was significantly impaired or unstable, as well as have access to his accounts to make sure his bills would be paid if he could not do so himself. I would never, under any circumstances, take money out of his accounts for any other reason. I’ve brought up this topic before, and it clearly made him uncomfortable. I know he feels like people treat him differently even though he’s been stable and responsible with money in the recent past. My hope is he will be well for the remainder of his life, and I will never have to use this nuclear option. However, it’s a good possibility he will experience a manic episode again. What can I do to protect his investments and retirement?
One of the hardest moments in the parent-child relationship is the point when it reverses. And no surprise, our approach to the resulting conversation can often lead to a defensive response. According to Julie Fast, an Oregon-based mental-wellness coach who works with people suffering from bipolar disorder and their families, the problem starts when we dictate a solution to a parent who has gone through life thinking he or she is in charge of us. For someone like your dad, who has what sounds like a severe form of bipolar disorder, it could be even tougher. After all, he’s currently doing well and may never experience another intense episode. But he could. It is, as you’ve no doubt learned, an unpredictable disease.
Fast suggests you begin by listening to your father. The solution, after all, needs to be something he wants, not something you insist on. It sounds like he’s expressed regret for some of the financial decisions he’s made when in a manic phase. You could remind him of those statements and express your desire to help protect him if it ever happens again. All of us want a confirmation of our beliefs, not to mention the comfort that someone is actually paying attention to what we’re saying. From there, discuss steps you can take together, like setting up a signature system at the bank, capping the amount of money he can withdraw without your sign-off. There are also advance directives, which would put you in charge of his medical care should conditions the two of you agree on—likely the diagnosis of a manic phase—come to pass. Finally, he should sign paperwork with his doctors so they can legally discuss his treatment with you without running afoul of federal medical privacy laws. But you need to understand that no plan is going to be perfect. It’s likely, for instance, that your father still could access or obtain a credit card if his illness leaves him determined to make an extravagant purchase.
“It’s his money and his life,” Fast says. “You ultimately need to accept that you’ve done your best.”