Elderly in-laws refuse to sell house that needs $200k of work, are out of money, can’t get loan

[Anonymous]

You cannot fund the repairs. You can’t afford this.

Getting a financial POA isn’t going to really help because they don’t sign their rights away with that, they just give you the authority to act on their behalf ALSO. This is a common misconception.

Patching the roof is likely to be the best option for now. They are not going to change and you cannot force them to do anything. But don’t enable them by giving them money!

[Anonymous]

Anonymous wrote:Folks in their 80’s with a $100K mortgage they can’t service, secured by a dwelling that is falling down around their ears, are not in a good place.

Hard as it may be, you should consider the admonition to “put on your own oxygen mask first.” If you and your husband’s siblings get dragged down with his parents everybody loses.

I wonder if you found a brand new place of manageable size, perhaps in a planned community with some amenities, you might be able to convince them that they’d be “trading up.” This might be more effective than convincing them their sentiment-laden home isn’t suitable any more. They bought a good place. They enjoyed it. They built up equity. Now is the time to cash out and enjoy the fruits of their prudence. Bonus points if they already know somebody who lives there or near there.

I think there is software that you can use to generate illustrations of how their favorite chairs, etc., would look in the new place.

Another suggestion before selling would be to contact a lawyer who is a member of the National Academy of Elder Law Attorneys to perhaps incorporate Medicaid planning into any transaction. A residence that a person intends to return to (however unlikely it is that that would occur) is treated very differently than a bag of cash or something jointly owned. Assets can also move between spouses to qualify for nursing home help. I know this isn’t on the table right now, but given their age it could come up any time.

It's just not that easy to convince people who want to stay in their home, that they should leave - even if you find them the absolute perfect place, where they would have a better quality of life.

[Anonymous]

Anonymous wrote:You cannot fund the repairs. You can’t afford this.

Getting a financial POA isn’t going to really help because they don’t sign their rights away with that, they just give you the authority to act on their behalf ALSO. This is a common misconception.

Patching the roof is likely to be the best option for now. They are not going to change and you cannot force them to do anything. But don’t enable them by giving them money!

+1. Patch the roof and only help with what absolutely needs to be done (replace hot water heater, keep heat and electricity on). Nevermind making it more sellable at the point or giving them extra money except for groceries. The next thing that will happen is one will fall and then they will have to move.

BTDT

[Anonymous]

Anonymous wrote:

Anonymous wrote:Folks in their 80’s with a $100K mortgage they can’t service, secured by a dwelling that is falling down around their ears, are not in a good place.

Hard as it may be, you should consider the admonition to “put on your own oxygen mask first.” If you and your husband’s siblings get dragged down with his parents everybody loses.

I wonder if you found a brand new place of manageable size, perhaps in a planned community with some amenities, you might be able to convince them that they’d be “trading up.” This might be more effective than convincing them their sentiment-laden home isn’t suitable any more. They bought a good place. They enjoyed it. They built up equity. Now is the time to cash out and enjoy the fruits of their prudence. Bonus points if they already know somebody who lives there or near there.

I think there is software that you can use to generate illustrations of how their favorite chairs, etc., would look in the new place.

Another suggestion before selling would be to contact a lawyer who is a member of the National Academy of Elder Law Attorneys to perhaps incorporate Medicaid planning into any transaction. A residence that a person intends to return to (however unlikely it is that that would occur) is treated very differently than a bag of cash or something jointly owned. Assets can also move between spouses to qualify for nursing home help. I know this isn’t on the table right now, but given their age it could come up any time.

It's just not that easy to convince people who want to stay in their home, that they should leave - even if you find them the absolute perfect place, where they would have a better quality of life.

Really? Say honest? No BS?

Gosh, then, I guess it’s not worth even trying. Because staying there is such a workable result, as OP explained at length.

[Anonymous]

The only solution in situations where everyone wants different things and the elderly parents are recalcitrant is to stall the process until the elderly parents are in such bad shape that they end up in hospital. Then you call the hospital, say you can't pick them up, they have nowhere to go, and room will be made for them in a nursing home. Assets will be used to pay until they're indigent and from then on, Medicaid will kick in.

It's what happens to thousands of older people all over America.

It's better that way than OP denying her children higher education options.

I have a senior in high school. The most expensive college he's applied to costs 85K a year. The least expensive is University of Maryland, which costs 30K since we're MD residents. UMD has become more selective and it's best to have a 4.0 gpa and interesting extra-curriculars if you want to get in (UVA is even more selective, for interested VA parents). Multiply that by number of kids. None of you are sure to get financial aid.

PLEASE do not underestimate the exorbitant cost of college, and what your kids will need in order to get there. "Interesting extra-curriculars" aren't free either, and neither is tutoring or test prep.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Folks in their 80’s with a $100K mortgage they can’t service, secured by a dwelling that is falling down around their ears, are not in a good place.

Hard as it may be, you should consider the admonition to “put on your own oxygen mask first.” If you and your husband’s siblings get dragged down with his parents everybody loses.

I wonder if you found a brand new place of manageable size, perhaps in a planned community with some amenities, you might be able to convince them that they’d be “trading up.” This might be more effective than convincing them their sentiment-laden home isn’t suitable any more. They bought a good place. They enjoyed it. They built up equity. Now is the time to cash out and enjoy the fruits of their prudence. Bonus points if they already know somebody who lives there or near there.

I think there is software that you can use to generate illustrations of how their favorite chairs, etc., would look in the new place.

Another suggestion before selling would be to contact a lawyer who is a member of the National Academy of Elder Law Attorneys to perhaps incorporate Medicaid planning into any transaction. A residence that a person intends to return to (however unlikely it is that that would occur) is treated very differently than a bag of cash or something jointly owned. Assets can also move between spouses to qualify for nursing home help. I know this isn’t on the table right now, but given their age it could come up any time.

It's just not that easy to convince people who want to stay in their home, that they should leave - even if you find them the absolute perfect place, where they would have a better quality of life.

Really? Say honest? No BS?

Gosh, then, I guess it’s not worth even trying. Because staying there is such a workable result, as OP explained at length.

Be as sarcastic as you want, but the fact is that OP can't MAKE them move if they don't want to. And suggesting that it's simply a matter of finding them a better house, then them being like "OH WOW SURE YES LET'S MOVE" is pie in the sky. Ask me how I know!

80 year olds don't want to leave their house. Even if it makes their lives worse to be there. My suggestion would be that you gird yourselves for the emergency that's going to happen at some point and force this decision in a crisis. Because that's where this is heading.

Maybe you all are more persuasive with your beloved parents and in laws than I am my sibling have managed to be.

[Anonymous]

OP, you are just throwing good money after bad if you use any of your own money to do repairs, especially if you say it will probably be a teardown when sold anyhow.

Having been in this situation, the pp is correct.

Wait until there is an emergency, and there will be one, and then whoever is healthcare and financial POA needs to go in there and figure out a solution. They do need a PAO in case of illness, so that is what I would concentrate on if they haven't already done the paperwork.

What will probably happen is that one elderly person will get sick, and be unable to be released back home. The other may or may not be able to live there without the other, and at that point they will both need to go to assisted living or a nursing / assisted living combo. Only then will anyone be able to do anything with the house.

[Anonymous]

PAO should be POA (Power of Attorney).

There is nothing much you can do to help stubborn 80 year olds who don't want to leave their house or spend their money in a certain way. Ask me how I know.

[Anonymous]

OP, you have received pages and pages and very good, solid advice. I hope you and your DH can use it to your (and his parents’) advantage.

Also, honestly, after reading all of your posts, I would be concerned about them driving more than their roof. I realize that’s a whole different hellish can of worms. Good luck with this and to your own home ownership one day.

[Anonymous]

If the house becomes truly unlivable, call adult protective services.

[Anonymous]

OP, bad financial choices are a symptom of dementia-- can be an early sign. Stop taking their choices so personally, stop saying to your husband that they're selfish-- it only hurts his feelings and the reality is, they're not capable of fully understanding their choices anymore. That doesn't mean you have to give them money, but you gotta understand that dementia's steering the ship here and irrational is how they're going to be.

https://www.aarp.org/money/credit-loans-debt/info-2020/bad-financial-decisions-may-be-dementia.html

[Anonymous]

The driving worries me, too.

This is such a great thread, too: not enough of us think about these issues until we are faced with such a situation personally.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, it sounds like your kids aren't college-aged yet. And you're early in saving for retirement, maybe?

There are calculators online that will help you both project a) what you need to save for retirement and b) what you need to save to pay for college for your kids.

(Side note on that, just use your state college flagship as a baseline -- if you want to pay for out of state or private, you will need to save much, much more. Take a look at current cost of attendance figures for colleges -- it's eye-opening).

You have to put your own oxygen mask on first, but getting cold hard figures of how much oxygen your family is going to need will help both you and DH in grappling with reality.

You also need to have a hard discussion with your DH about the power of compounding interest. It is far more valuable to save a dollar today than it is 10 years from now (which I'm sure you know); online calculators are also very helpful to illustrate how hard it is to catch later on deferred education and retirement savings.

One factor I would take out of the equation is inheritance. Do not approach this issue as your in-laws "squandering their kids' inheritance." There is no inheritance under these facts.

I agree with PP that you and DH could agree to help the ILs with funds to pay for the essentials of life, but you shouldn't put a dime into this house. It's a money pit and you shouldn't throw good money after bad.

Thanks for your thoughtful message. Yes, we have young children and 529s for them that are not fully funded yet as they are under age 5. We are also saving for a home ourselves. And we are making solid payments to our 401k but it’s maxed for just one income as I work PT and am home PT as primary caretaker for toddlers. Could we stop paying into our 401k to toss money at their house? Technically, yes. It’s money we don’t “see” as it goes into the account automatically. But doing so for 5 or 10 or more years is extremely scary to me and I don’t want to be so risky. We expect zero from inheritance / estate; in fact, we’re already planning on the expenses we will have to undertake when the time comes because they of course have said nothing aside for end of life requirements, and we will need to pay for funeral expenses, junking out the house, etc.

It would be absolutely insane to do this.

[Anonymous]

Anonymous wrote:We have a frustrating, stressful situation going on with my in laws. This will be long as it is complicated, but I would love some advice from anyone who may have been there before (my condolences).

* In laws are in early 80s, with moderate health problems, but can live independently and safely drive. They’re mentally competent but there are a couple signs of early dementia for one of them and they have become deeply sentimental at this stage in life. DH’s sibling lives nearby and regularly checks on them. We live across the country.

* They are terrible with finances — making poor “investments,” buying collectibles on eBay, going out to fancy dinners because keeping up with appearances is very important to them. They owe $100,000 on their mortgage. They are almost out of money. FIL works a few days a week for pocket money. DH and his sibling deposit a modest amount of money to their account on a semi-regular basis.

* They are deeply, emotionally connected to their large ramshackle house. They are terrible about upkeep and have always cut corners or done failed DIY projects. The house needs $100,000 in repairs to make it sellable/more livable, $200,000 to make it competitively sellable/more permanently livable. It somehow assessed for $600,000 (large lot with water access on coastal state). Even with the lower end of repair work done it would likely be a developer buy where the house would be torn down.

* They are in denial about their circumstances, and their plan is to stay in their house until the end of their days. They joke that will have to take them out feet first, even though, like the majority of people, especially those with health problems in their senior years, they will likely require assisted care at some point. For one, that could be within the next couple of years; the other could probably live independently for maybe 10 years.

* ALL of their problems could be solved by selling which would let them move into a smaller, safer, newer home; pay off their mortgage debt; and enjoy the remaining cash flow from the sale to help see them through the end of their days (or most of them).

* They absolutely refuse to sell. But the house is in such poor shape that they don’t qualify for a reverse mortgage. They could take out a home equity loan but wouldn’t be able to make the payments on it because they would need so much work done, and it also doesn’t help with daily expenses the way a reverse mortgage could.

* DH’s sibling just bought a house and isn’t in the position to give them the money they need to make the repairs. DH and I could make their home equity loan payments for them, but it would mean we’d have to stop making contributions to our 401k, for who knows how long. We are also saving to buy our own home and have kids who need to go to college one day, so it’s not ideal. DH is willing to do it, but I am not.

* Getting them to sell is the best choice for everyone of course. It buys them financial freedom, gives them a safer place to live, and cash to work with. But they are dead set on staying, even at the risk of continuing to minimally improve their living situation while worsening their financial situation, and even if their continued bad choices keep money out of the pockets of their children who keep financially helping them.

Outside of eventually having to get POAs to take over handling this horrible property and their finances when they eventually get too elderly to manage it, is there anything else we could possibly do? I have suggested that DH and his father meet with a financial planner to have a third party show them how selling would be a positive and staying would be a negative. I also suggested that he try to set up a meeting with a family counselor who can help walk through some of these very deep, emotional connections they are feeling to the house, as the reality of their situation just isn’t sinking in. He is game but needs to talk to his parents about both and doesn’t know if they will buy in to either. In the meantime, he is wracking his brain to see if there’s any other financial way for his parents to stay in their beloved (dilapidated) house but I truly think there’s no other option. Either they sell, or they stay and stay consumed with underfunded repairs they will constantly be in debt for. And eventually we will be too.

That's nothing. Mine gave their home to their daughter and we still had to get it fixed until they lived there on top of providing for their living and medical expenses, including driver, cook/cleaner and medical attendant.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:would they sell you half the house for less than market value so you can fix it up and allow them to live there until they pass? With the agreement that you inherit the house entirely at that time?

The bigger issue is we don’t want the house or anything to do with it. We don’t even own our own house yet and we don’t want the liability of theirs, even if it may be “deal” at some point. Just not an option.

I don't understand how it is a liability? And if you don't own a house yet.... but you are able to get one for half off, that's a good deal. As an investment/flip. You don't have to live there.

The house is in poor shape. We’re not in a great position to buy it / buy into it as it comes at a risk of our financial security for the future. I see a broken down house I don’t want to invest in or be left or purchase in a state 3,000 miles from where we live to be a gigantic stressor. We don’t know how the market would be when it comes time to sell; we don’t know if, being on water and in a flood plain, it may not be as sellable as it may seem to be, or if there are environmental issues with the house/land that would create more problems trying to unload it; we don’t know if it won’t sell and we are stuck making payments on it when we don’t currently own a home at this time. Bottom line: we do not want this house. It’s not a quick sell and it’s not a flip; but the bottom line is we are not financially risky people who are well off enough or have the time or ability to deal with this property. Again, if we were entrepreneurs, savvy home owners, house flippers, or had the time and means to take a gamble on this turf of a property, yeah, maybe it would be worth a potential gamble. But there is no desire at all to get involved other than DH feeling guilty that his parents “dying wish” is to stay in this nightmare of a house and they don’t have the cash to stay and want a hand out.

OP, we had a number of friends who bought second homes in the '08 financial crisis and some again in COVID. Boggled my mind until I realized that they had the assets to do so and we did not, so that's why it seemed so perilous to me. This house is not a few hours down the road and doesn't sound like rehabbing it would be a jam for you and your DH.

Suggest you try to support the emotional stress for your DH as best as you can, but work to limit any financial exposure to his parents. Small amounts are one thing; taking on partial home ownership, etc is vastly different, especially when you may not be able to get that money out if his parents end up on Medicaid.