Is there anything I can do about my parents making bad investment decisions?

1 answer | Last updated: Nov 12, 2016
A fellow caregiver asked...

What can be done about a parent who invests their life savings aggressively in money-losing businesses and investments? Although my parents made good money when they were younger, as they've aged, they've lost more and more money with each "investment" and now they're pushing themselves to the brink of bankruptcy. I think one of them may feel "behind" in terms of becoming wealthy and accomplishing life goals, so they take bigger and bigger gambles -- in industries they know very little about -- to "hit it big," losing more and more money each time. Even if they get enough money to pay of their debts -- perhaps relying on friends and family to bail them out -- I fear they'll use much of those funds betting on another "investment" gambit instead of paying their debts (including the IRS, banks, mortgage etc.). It feels like a gambling addiction, and I know of another family with this same kind of problem.

Expert Answers

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

Although the most respectful and practical course of action may be to deal with your parents making bad investments by helping to educate them as to where they are making mistakes, particularly as their investments increasingly become risky speculations rather than carefully thought out invesments, if the situation became dire enough you could petiton the court to be appointed their conservator.  A conservator is appointed when someone (the ward) is unable to manage his or her finances.  It will be necessary to prove to the court that they are incapable of managing their own finances in order to be appointed conservator.  It is not a great option, but if you believe you have no choice, it may be a viable option.