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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]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. [b]We are also saving to buy our own home and have kids[/b] 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.

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If you do not yet own your primary residence, and 401ks and 529s are not fully funded, then you CAN NOT afford to help financially. You have to bring DH around to grasp this. It is incredibly poor judgement to put your own financial future and the future of your children at risk in order to fund your in-laws' preferences. It would be a different call if you were using the funds for groceries or critical medications or to keep the heat on. [/quote]

+1. And I question the wisdom of putting hundreds of thousands of dollars of work into this house with a goal towards making it sellable. Putting money towards making it liveable for two elderly people - getting everything on one level, or putting in an elevator, eliminating steps/installing ramps, etc. might make sense. But probably not if they are barely making it financially.

From one DIL to another I am going to caution you against pressing for any solution other than holding your ground that your family is not able to contribute in a financially significant way and supporting whatever your husband and his brother decide to do.

My IL's owned a house a lot like your ILs. Not dilapidated, but dated and not elderly friendly. It was on a big piece of property so they decided to subdivide and build a smaller one level home on the smaller lot and sell the house and bigger lot. I didn't think it was a great idea for them to live next to their home of 50 years while it was being torn down, but it was my MIL's idea/effort. They tried to pick buyers that would keep the old house on some level and not raze it. The buyers they raved about kept two or three walls so they could claim it was in line with the historic look, etc. My IL's hired an estate sale company to take most of the furniture/belongings for sale and then the rest was supposed to be donated. That company pulled a dumpster up and started tossing everything in, which caused my MIL to get EXTREMELY upset. I felt really bad for her.

I think at the end of the day my MIL was able to deal with all of that because she knew it was all her idea. For better or for worse, she had wanted this. The kids didn't want the house sold. My FIL wanted to put money into making it liveable for them as they aged, but my MIL was insistent that they sell it. She was probably right. They now split the year between their condo in FL and their old hometown.[/quote]

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