Reply to FIL divested assets and now has no way to pay for MIL's nursing home care.

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]What were the details of the sale of their house to BIL? I don’t understand how they sold a house 3 years ago and have less than $50k in savings. Just how far below market price was the sale? Why would elderly people with modest savings think they could give $125,000 away? None of this makes any sense.[/quote]

Ok, these aren't the exact details down to the dollar amount.

FIL inherited the home about 50 years ago. I believe it was mortgaged to 17K in the 1970s.
The house was sold for approximately ~450 in 2021. 
325 was owed on the home. FIL did cash out refi's every few years.
The home was appraised at ~575 (DH and I assumed it would be worth 700K, but we were incorrect)
FIL "gifted" the 125K in equity to BIL and walked away with (roughly) 100K.

FIL spent about 40K on an exterior building on his cabin property, building a workshop for himself. He spent about an extra 10K on various things: diamond earrings for MIL, etc.

FIL gifted the equity to secure a quasi-tenantship in the home, to come/go as he and MIL please to attend her Dr's appointments. FIL never moved out of the home. All of the original belongings, furniture, clothing, and dishes remain. FIL and MIL still occupy the master bedroom. FIL lives there almost full-time now.[/quote]

He didn’t gift the equity. He sold it for 125K less than appraisal which considering he still has all his crap there and  is living in the master bedroom years later was a deal in his  interest not the people who bought it.

It is unlikely that FIL would have actually gotten 575 without inspection and doing nothing to the house.[/quote]

yeah well, that’s not how the government sees it. if he wanted to make some kind of bona fide deal, he should have done it in writing. now he’s screwed himself. [/quote]

Wait did they not actually sell the house to BIL and skipped transaction costs, taxes and title changes? If he sold the house legitimately for 450 and walked away with only 100 k after mortgage and taxes and then spent 100K, I don’t think he’s triggering the look back. [/quote]

you don’t sell the house “legitimately” to a relative for $125k under the appraised value…[/quote]

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