When you discover your parents are broke

[Anonymous]

Bankruptcy helped my relative in a similar situation. There wasn’t going to be anything left for the kids and grandkids due to his debts. And the stress and family tension might have killed him quicker. He did the full bankruptcy not the structured payments one.

[Anonymous]

6:19, look into an Erickson Living facility. A friend's mom is there and I have to say I was very impressed by the services and activities. The cost seems manageable. They would have an apartment rather than a house. How old are your folks?

https://www.ericksonliving.com

[Anonymous]

My FIL has to move in with us because of his very poor financial decisions- gambling, reverse mortgage, no savings, debt, etc...

It sucks.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would like some feedback from anyone in a similar situation —

My parents don’t have secret debts and they are generally good and decent people, but they never focused on finances, lived in an ultra low cost of living area with modest jobs. They have some retirement savings — less than 500k, and social security. The immediate problem is that they want to move to be closer to one of my siblings and grandkids. I am generally supportive of this — they live in this big, old house now where things are constantly breaking and the house is ill equipped for their current lifestyle. I think they would be best served moving to a 55+ del Webb type community — while in decent health, there are some problems lurking beneath the surface (bad knees, diabetes, etc) and I think both of them would benefit from the community that these del Webb places offer. The problem of course is the $$$ — no way the current house is going to cover everything. I am inclined to help especially if it means they get a nicer place with a community as opposed to an old shabby house in a random subdivision in a new town where they don’t know anyone. It just feels like the latter option can contribute to further health declines (both parents can be prone to sedentary lifestyles unless you prod them). So that’s the short term issue. Do I help with this?

BUT the long term issue and the one that has (literally) been keeping me up at night — they have no game plan when it comes to long term care, nursing homes, etc. They never purchased long term care insurance and obviously their modest assets will not be enough to cover long term health care costs should the need arise. Neither of them have given this any thought — the plan is that they will both die before this becomes an issue or I will figure it out when the time comes. This is not a plan. I have a relatively high income ($400k+), wife, no kids and none in the future. I could obviously do more to help them but it is hard for me to figure out what I should be doing now. I have hired an elder law attorney to help protect assets for Medicaid. Should I just take the position that choices have consequences, they are likely headed to Medicaid someday, and it will be about just finding the best Medicaid option? Or should I be touring nursing home and continuing care communities myself, have all of my homework done way before anything is necessary, have a firm sense of the financial commitments, and start planning now? My wife is not opposed to helping but also becomes frustrated when I am spending all this time researching things and my parents response is “we aren’t discussing nursing homes; never bring up the subject again.”

I really appreciate any other perspectives.

Better to start your own thread so OP can continue to get answers to her question.

Thank you! (~ OP)

[Anonymous]

Anonymous wrote:In-laws have a history of poor financial decisions. When times were good, they spent their money.
Now they are 70 and, surprise! We just found out FIL has years of back taxes he owes, and has no savings.
They have a little retirement, and they both still work PT. I believe my FIL owes $100K +.
My husband has a brother, and they all do have a good relationship. But the FIL is very proud, and has kept everyone (including my MIL) out of the loop for this for years.
My husband is curious to know what is going on, and has a slight concern for his father’s mental state, but is now also concerned for his mother who claims she has been ignorant to this entire thing and feels betrayed, confused, etc. (There are lots of layers to this entire thing.)

Details aside... what is your BTDT advice, and what was a success when you found yourself aware of a major family financial explosion like this?
This is not just about finances / bills / repayment plans, etc but also concern for emotional well being, pride (who will he agree to talk to about this?), concern for my MIL and whatever nest egg she expected. To further illustrate their level of planning: neither of them has a will.

Thanks for reading.

I'm doing nothing to remain married. As much as I want to 'come up with a plan', I slow myself down and will wait until my opinion is asked. My wife has 3 other siblings who I believe are ignoring their parents upcoming retirement. Yes, my in-laws have also mismanaged their money (i.e. supporting other families and buying expensive cars.)

[Anonymous]

It’s not easy. I would not sacrifice my own family’s financial solvency in your situation. I would let my mother or sister or disorders in law live in our basement if they were broke, but no cash headed out of our house.

If I were you I would indeed look into what’s going on with their situation, help them sort it out as best they can, and figure out a plan for the future. Easier said than done, I know.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We saw that coming with my in laws and we sat them down when they were 60 and said, "you can't live with us and we won't support you".

We agreed to help them get a house they could afford meaning we put $$ down for them (big mistake). They just refinanced, pulled $$ out and went on a cruise.

10 year later they asked to move in with us. We said NO!

Now they have no money, live in a tiny house in Southern Maryland somewhere... don't know, don't care.

OTOH, my parents are very responsible ... never over spent, we bought my mom (with the $$ when we sold the family home) a condo in a retirement community. All her expenses are paid with retirement/SS.

We do not give her access to her money because she has scammers try to scam her yearly. She can have as much $$ as she wants but she has to ask and no she can't have $9000 to pre-pay taxes for her Publisher Clearing House win. (True story.) She can access $500/month without asking, we track that to make sure nobody is taking advantage of her.

You didn't buy your mom a condo. Your mom bought herself a condo, with the proceeds from the sale of the house *she* (not you) owned.

Oh, come on. They obviously meant they performed the transaction: found a property, worked with a real estate agent, did due diligence. They might have even had POA to sign all the documents. Let’s not fool ourselves about how much handholding our elderly parents need at times.

PP here and I have BTDT with my own parents. I never, however, thought of it as "I bought my mom a condo."

[Anonymous]

My parents didn’t have a plan (or so i thought) and didn’t care. I saw it coming about 10 years in advance and tried to help them. They ignored my advice. I tried to help them 5 years out with more advice. They ignored it again

When they ran out of money my mother was lucky to inherit some. She promptly divorced my father so she didn’t have to share it. I felt bad for my father and bought him a condo to live in (thankfully I kept in my name).

I asked my father to contribute a modest amount less than the condo does monthly to give him some value in what he was eyeing but he paid it sporadically and regularly bounced the checks. He borrowed money on top of it. Eventually he got kicked out of the condo (don’t even ask how but it is possible) and then I cut him off. I told him that I would not support him financially any longer and that while I loved him we could no longer discuss money and that while I wished him the best I would not help him financially any longer. As a result he hardly ever calls me except to ask for money. Very sad truthfully.

[Anonymous]

Anonymous wrote:My parents didn’t have a plan (or so i thought) and didn’t care. I saw it coming about 10 years in advance and tried to help them. They ignored my advice. I tried to help them 5 years out with more advice. They ignored it again

When they ran out of money my mother was lucky to inherit some. She promptly divorced my father so she didn’t have to share it. I felt bad for my father and bought him a condo to live in (thankfully I kept in my name).

I asked my father to contribute a modest amount less than the condo does monthly to give him some value in what he was eyeing but he paid it sporadically and regularly bounced the checks. He borrowed money on top of it. Eventually he got kicked out of the condo (don’t even ask how but it is possible) and then I cut him off. I told him that I would not support him financially any longer and that while I loved him we could no longer discuss money and that while I wished him the best I would not help him financially any longer. As a result he hardly ever calls me except to ask for money. Very sad truthfully.

Inherited money is not marital property. She would not have had to share it with her husband.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My parents didn’t have a plan (or so i thought) and didn’t care. I saw it coming about 10 years in advance and tried to help them. They ignored my advice. I tried to help them 5 years out with more advice. They ignored it again

When they ran out of money my mother was lucky to inherit some. She promptly divorced my father so she didn’t have to share it. I felt bad for my father and bought him a condo to live in (thankfully I kept in my name).

I asked my father to contribute a modest amount less than the condo does monthly to give him some value in what he was eyeing but he paid it sporadically and regularly bounced the checks. He borrowed money on top of it. Eventually he got kicked out of the condo (don’t even ask how but it is possible) and then I cut him off. I told him that I would not support him financially any longer and that while I loved him we could no longer discuss money and that while I wished him the best I would not help him financially any longer. As a result he hardly ever calls me except to ask for money. Very sad truthfully.

Inherited money is not marital property. She would not have had to share it with her husband.

Right, but I would assume the PP is referring to the practicality of living with someone in debt when you inherit money. ie, how do you justify buying new shoes with your inherited money when your spouse can’t afford groceries?

[Anonymous]

OP here.

Thanks for all the feedback. Sounds like many of you have been dealing this for awhile, and we are just in the beginning stages of learning the details of the debt.

But sadly, my MIL and FIL are in such denial and are projecting so much anger / frustration on those around them that my husband can not seem to have a rational conversation with them.

Sad that parents (or anyone) can have such pride they cannot accept help when offered it.
I fear this is not going to be resolved quickly or easily.

PS - I have also learned this is a pattern of avoiding taxes for many years.

[Anonymous]

I can quickly grow sick to my stomach contemplating this.

My parents were never well off and have done what they've had to do. My dad retired from the gov't early, but has the good "old" retirement plan so health care has never been an issue. They've lived off social security, his retirement pay, and working odd jobs. My dad, at age 70, stocked Walmart shelves seasonally for extra money. The recently sold their house and moved into an RV park. I think, ultimately, they will be independent for the rest of their lives, and maybe we just help with vacations to see us or simple things like that.

My in-laws live way above their means. My FIL retired early with one year's severance and a full pension and blew through the severance the first year he was retired. The house is fully mortgaged. He's not worked a day since. MIL continues to work part time. They went through bankruptcy about 20 years ago.

They are very image and status conscious and I can't imagine them ever downsizing. I also cam't imagine my inept FIL has managed what money they have nor paid taxes, which was the issue with the prior bankruptcy. They go on vacations regularly and pay for a timeshare.

Husband's siblings live close - we live away. The siblings are also image and status conscious and I fear will insist that we all pay into their old age care (just as our kids are reaching college age, argh). Meanwhile my parents are living in a trailer, not asking for anything. I really can't think about it much and just hope it will all work out but I'm deluding myself. My DH and I are comfortable and fine, but living in DC and with with kids there is not a lot extra.

[Anonymous]

Anonymous wrote:I can quickly grow sick to my stomach contemplating this.

My parents were never well off and have done what they've had to do. My dad retired from the gov't early, but has the good "old" retirement plan so health care has never been an issue. They've lived off social security, his retirement pay, and working odd jobs. My dad, at age 70, stocked Walmart shelves seasonally for extra money. The recently sold their house and moved into an RV park. I think, ultimately, they will be independent for the rest of their lives, and maybe we just help with vacations to see us or simple things like that.

My in-laws live way above their means. My FIL retired early with one year's severance and a full pension and blew through the severance the first year he was retired. The house is fully mortgaged. He's not worked a day since. MIL continues to work part time. They went through bankruptcy about 20 years ago.

They are very image and status conscious and I can't imagine them ever downsizing. I also cam't imagine my inept FIL has managed what money they have nor paid taxes, which was the issue with the prior bankruptcy. They go on vacations regularly and pay for a timeshare.

Husband's siblings live close - we live away. The siblings are also image and status conscious and I fear will insist that we all pay into their old age care (just as our kids are reaching college age, argh). Meanwhile my parents are living in a trailer, not asking for anything. I really can't think about it much and just hope it will all work out but I'm deluding myself. My DH and I are comfortable and fine, but living in DC and with with kids there is not a lot extra.

This hits on what my husband is wrestling with.
He's struck that his father is asking them to help bail him out, when any savings we have is intended for our children's educational future.
This whole experience is messing with my life/parents/family values; it's hard to let a young person screw up but expect they should learn from their mistakes - but, to let elderly parents screw up, knowing they knew better... this is becoming an emotional and stressful experience.
(OP)

[Anonymous]

Wondering what race and SES are the ppl in this post b/c I feel so sad reading these solutions.

[Anonymous]

Anonymous wrote:Wondering what race and SES are the ppl in this post b/c I feel so sad reading these solutions.

They sound white to me.