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

[Anonymous]

That put our own retirement and long term care in jeopardy.

[Anonymous]

Anonymous wrote:

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.

PP, how did this come to pass?

[Anonymous]

You need to have them sign POAs, both a health POA and a financial POA. Your husband and brother-in-law need to work that out with their parents immediately. They need to talk with their parents about what this means, agreed upon when to use POA, so their parents feel better.

No offense, but you're focusing on the house too much.

[Anonymous]

Do not pay for a new roof unless your retirement and children’s education are fully funded.

The roof will probably be fine. A few leaks here and there aren’t a big deal if the house is already a tear down.

They want to leave feet first. This is fine. Let them be and don’t pester them.

[Anonymous]

Anonymous wrote:You need to have them sign POAs, both a health POA and a financial POA. Your husband and brother-in-law need to work that out with their parents immediately. They need to talk with their parents about what this means, agreed upon when to use POA, so their parents feel better.

No offense, but you're focusing on the house too much.

If you haven't BTDT, then focusing on the house is understandable - it's the most obvious in an otherwise bleak scenario.

FWIW, I've been through this twice and, after the first time, I told friends, family, colleagues, whoever would listen - get health and financial POAs. My parents thought they had done it, but it was not the case. We totally lucked out in being able to make it right before it would have been too late.

OP, GL - and come back here for support in order that you can support DH and also be reasonable about the circumstances.

[Anonymous]

Op. Fix what needs fixing only. If the roof is not leaking it’s fine. Maybe bring in a cleaning crew. We bought a house like this and slowly fixed it up. You sell it as is. The kids allowed us to do an information only inspection and we all agreed that if it was bad enough they’d let us walk and sell to a builder but they wanted a family in the house. It worked out well for all of us. Easy sale for all of us. The parents took care of it for many years but got older and couldn’t.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, the reason there is no path to making the finances work is because the house is a tear-down. Your inlaws got into this situation over YEARS and YEARS. Any money spent to improve the house is throwing good money after bad.

And the best answer their kids can give them is to tell them you are really sorry that there is not a financial option that will let them stay in the house. It is too bad there is a bunch of deferred maintenance and they can't afford to fix it, but there are all kinds of things I want and can't afford.

You guys are not in a position to help, not really. (If helping is at the exclusion of college and retirement savings.) This is a huge problem and if you start throwing money at home repairs you might as well be lighting it on fire. Your inlaws have a path out. They just need to know that there is no money fairy coming to let them have everything the way they want.

Thank you for your comment. I 100% agree, and these statements are literally exact things I have said to my husband. They have made so many complex bad decisions. I can’t believe they even owe money on this house that they bought more than 25 years ago, but that shows you how little they have been paying down their original mortgage, and how much they have been spending on fancy brunches and crap from eBay. They have a wonderful, perfect escape hatch out of this terrible situation, they put them self, and that will clear their debt, give them cash, and let them live in a really safe, spacious house. It is so incredibly selfish to me that they just want to stay and keep throwing money into this hole in the ground, quite literally.

Others have covered this, but just to reiterate, you should absolutely not damage your family's financial future to coddle them. If they were in danger of being homeless, that's a different story. But they're asking you to put off purchasing a home and funding your retirement and kids' education to enable their lifestyle choices - unreasonable and impractical choices at that.

Another point to reiterate - whatever happens, your husband or his sibling should try to get a financial POA immediately. Because of their history of bad decisions, they could put themselves back here even if they sell the house. They have a small margin for error now, but next time, you could find yourself in a situation where you *have* to help them out.

Thank you. Yes, we have talked about POAs; I don’t think it will fly because they don’t seem to think they need it. We have plans for who will manage the estate and end of life decisions, they and sibling are on board and it has been notarized. Our charge now is to try to funnel them into making the right choice that doesn’t drown them in this house and it’s never ending needs and also pull down their children trying to support (enable) them.

OP, I'm not a lawyer, but have been through this phase of life for a few folks - what were the plans for managing the estate and end of life decisions? What was the notary for? Unless these are truly legal documents able to hold up to scrutiny in court, I would not bank on what seems like an already shaky foundation (no pun intended).

[Anonymous]

OP you obviously care a great deal about your in laws.

Is there any way DH's sibling who lives close can somehow block eBay on your in-laws' computer? To at least curb the tchotchke spending?

We are in a somewhat similar situation w my ILs, minus the 100k mortgage. The baby boomers put the Xers in a pickle, for sure.

[Anonymous]

Stop fixating on the state of the house. Truly. Plenty of old and/or poor people live in rundown houses with leaky roofs. Let the next storm roll through and rip the whole thing off and insurance can cover the replacement.

I would not ever put money into a house that only may be an inheritance for my spouse, which means it's not marital property. No effing way. The money should be going into your retirement. Don't be foolish here.

[Anonymous]

OP - this is not your burden. YOUR burden. Your DH and his siblings, it is their burden. They have to handle this ... or they don't handle it. Aside from making sure ILs are not receiving a large amount of money that should stay with your family -- YOU have no role in this. It might be a sh*t storm. And all you can do is watch. But truly, it is not your role to solve this.

With your own parents, yes.

[Anonymous]

OP, I feel for you as I am in a similar situation with my father. As everyone has already suggested, you should not be helping out at all—not for the roof, not even for the semi-regular deposits you are making. If they truly run out of money, they can apply for food stamps, energy assistance, meals on wheels, etc. Don’t enable them any longer especially while you have your own house to buy, retirement and education to fund. At some point, one of them will be hospitalized and you’ll have to tell the hospital that they need to find a Medicaid home for them. The spouse at home will get to keep some assets, but they will have to spend down their assets and apply for Medicaid once their money runs out. They will be private pay until then.

You mention funeral costs. Once you have financial POA, you can put aside $15,000 of their assets in a funeral trust. This is allowed by Medicaid and is part of the spend down. You shouldn’t have to be worried about paying for their funeral or burial expenses out of your own pocket.

Good luck. This is a hard road. It’s time consuming and emotionally exhausting. There are no great alternatives, but you want to make sure you come out financially whole. It would not be fair to you and your kids otherwise.

[Anonymous]

^^^you also mentioned paying for “junking out the house”. If the house is sold as is to a developer, let them deal with it. I have seen true hoarder houses sold as is for $700-$800k here in DC.

[Anonymous]

Selfish boomers awful

[Anonymous]

If they’re obsessed with appearances, I think you need to show them some sort of luxury condos with amenities. Tell them it’s the fanciest place available and The Who’s who of their town is moving there. Make them think they’re trading up versus downsizing.

[Anonymous]

1) there are brokerages that will lend you the money to fix it up to sell

2) reverse mortgage