Are You Responsible for Other People’s Money?

By Laura Chiesman

It’s not uncommon for successful individuals and couples to realize at some point that they have become the financial go-to person for their extended families and often even for friends.  The classic blessing and a curse scenario!

It makes sense. Friends and family who see your success and knowledge come to you for advice, guidance and answers to their “how to” questions. You may be quizzed on financial life issues ranging from banking and loans, budgeting, investments, college funding and all kinds of insurance, all the way out to how to handle long term care expenses and estate planning. If you are this type of a “go to person” you may find it helpful to have an arsenal of resources ready to get people started. I find that having people do some of their own leg work is a great first step – it’s educational for them and protects your time by sifting out the “just curious” or those looking for an easy out! Your arsenal might include good books and websites that you can share as a first step for those seeking your advice. Here are some helpful resources:

Five Things for Five Stages of Your Financial Life 

Listing of financial books, both classics and newer:

If there are specific needs you can share contact information for trusted professionals such as attorneys, CPAs, mortgage brokers, realtors, mortgage brokers, etc.  

Sometimes the situation goes beyond providing advice and resources. You may find yourself on a path of ever-increasing involvement and responsibility for an older or incapacitated relative’s everyday life, health, investments and other financial issues. You may actually be named in a relative’s Will as their personal representative (known as an executor in some states), as a Trustee in their living trust, or included in the lineup for responsibility in their financial or medical Powers of Attorney documents. 

Being entrusted to help with important issues and finances, or being named in someone’s Will, Trust or other documents may feel like an honor and of course it is a show of trust and confidence by those who are close to you.  However, in addition to that honor there is time commitment, lots of responsibility and sometimes liability so it’s wise to study up and get some advice yourself. This video put out by the Consumer Financial Protection Bureau (CFPB) puts the topic in perspective –

If you have concerns about your responsibility for a loved one’s financial well-being please feel welcome to call a WealthCoach for resources and to discuss our process designed to help those who are responsible for other people’s money, The Fiduciary Relief ActTM.

You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial. A copy of the FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.