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
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