Parents out of money at 75

[Anonymous]

Anonymous wrote:

Anonymous wrote:WTF is wrong with people? You give the money and leave it alone. SS sounds like it's enough for them. They can also receive Meals on Wheels deliveries.

You don't give money. You pay the bills.

This is what we do for FL. We bought a house that he lives in (fly over country, so it was not a significant outlay), we've covered some uninsured medical expenses, and we've paid some other bills directly. I get annoyed when I see that he spends his small retirement on booze and golf, so he's not really doing his part, but for now, the help we provide is manageable, so I try not to dwell on it. DH has some siblings who've asked for help, and he can't say now, so we have ended up with separate brokerage accounts as a compromise. My parents also don't give us cash gifts at my insistence (I asked them if they want to give money away, put it in 529 plans for the kids, pay for vacations, give me gifts instead of cash, or work with their estate planner to put it in a trust for me, and then our kids).

[Anonymous]

Anonymous wrote:My in-laws have just revealed to us that they have depleted their savings and are living 100% on social security. They have a paid for house and can manage their routine expenses with what they get from SS, but recently needed a $20k home repair which is how this situation came to light. We can provide them with the money they need for the repair, but I want to set it up as a loan against their home equity (roughly valued at $350k). Does that sound reasonable? How would you go about documenting such an arrangement?

Knowing that they're out of money, any recommendations on what we should be factoring into our own finances to help them navigate the next phase of life? Any financial burden will fall to us and I'm worried this is going to change our own retirement planning...

You could structure it as a secured loan. Draft a promissory note (with interest that accumulates even if they don't pay you anything) and have a security interest recorded against their house for $20k plus interest. When they pass, their estate will have to pay it back when the home is sold and only the net proceeds get divided to their designated heirs.

[Anonymous]

Reverse mortgages are a scam. Sell the house, find an inexpensive place to live. Stretch SS+earnings on house as far as possible

[Anonymous]

Anonymous wrote:My in-laws have just revealed to us that they have depleted their savings and are living 100% on social security. They have a paid for house and can manage their routine expenses with what they get from SS, but recently needed a $20k home repair which is how this situation came to light. We can provide them with the money they need for the repair, but I want to set it up as a loan against their home equity (roughly valued at $350k). Does that sound reasonable? How would you go about documenting such an arrangement?

Knowing that they're out of money, any recommendations on what we should be factoring into our own finances to help them navigate the next phase of life? Any financial burden will fall to us and I'm worried this is going to change our own retirement planning...

Sounds like one of them needs to go back to work.

[Anonymous]

Anonymous wrote:I would sell the house and get them into a continuous care community near you, take the left-over money and put it in the bank/whatever a financial planner recommends.

Use the extra money for fun trips and save some for care when they are too told to care for themselves.

We did this for my mom and it was the best thing we did. Friends, no house to care for, activities, easily affordable.

You are clueless about what a continuous care place costs, methinks. There would be no extra money.

[Anonymous]

Anonymous wrote:Clarification. We can give them $20k, but I worry that this is the beginning of an ongoing, unexpected financial expense for us. We don't make a lot of money and have been diligently saving for our own retirement (we're both 50). I'm just worried about the setback. Does it start with a roof and end with $9k/month in assisted living? I surely can't be the only one going through this situation. There's one sibling with no money, hence the question about a loan against their equity. They are wonderful people, I'm not vying for their house, we're happy to help them. I'm just hoping it doesn't come at the expense of our own retirement.

Yes, it might. I would consult an elder care attorney. Seriously. You might set some sort of precedent that could come into play down the road in states with filial laws.

[Anonymous]

Anonymous wrote:Clarification. We can give them $20k, but I worry that this is the beginning of an ongoing, unexpected financial expense for us. We don't make a lot of money and have been diligently saving for our own retirement (we're both 50). I'm just worried about the setback. Does it start with a roof and end with $9k/month in assisted living? I surely can't be the only one going through this situation. There's one sibling with no money, hence the question about a loan against their equity. They are wonderful people, I'm not vying for their house, we're happy to help them. I'm just hoping it doesn't come at the expense of our own retirement.

No—they will be perfectly situated for Medicaid to pay. How your spouse feels about the SNFs that take Medicaid is another story.