Anonymous wrote:I'm basically trying to offer them a reverse mortgage without fees. Instead of a bank, they use us as a line of credit. If there happens to be anything left from the house, we would recoup. I'm not expecting that to be the case and essentially consider the money a gift from us, but just trying to document appropriately for transparency among siblings.

I agree there's a bigger conversation to be had. Perhaps they should not be in a house they can no longer afford to maintain. But I have no idea where they could go that would make more financial sense.

We're committed to helping. I'm just feeling a bit overwhelmed by this turn of events.

I wouldn’t get into any kind of situation like this. Either you help them as a gift and accept that yes, it almost certainly will be ongoing. Or they accept that they are not able to afford their life in the house and they downsize to match their income. Or they don’t do that and they just stay in there while it falls apart around them. That happens a lot.

I'm basically trying to offer them a reverse mortgage without fees. Instead of a bank, they use us as a line of credit. If there happens to be anything left from the house, we would recoup. I'm not expecting that to be the case and essentially consider the money a gift from us, but just trying to document appropriately for transparency among siblings.

I agree there's a bigger conversation to be had. Perhaps they should not be in a house they can no longer afford to maintain. But I have no idea where they could go that would make more financial sense.

We're committed to helping. I'm just feeling a bit overwhelmed by this turn of events.

They obviously can’t afford to live in the house anymore if they can’t afford maintenance and repairs. I am hesitant to recommend selling and renting since they may not be able to manage the money well. Perhaps selling and moving into a retiree community is best? That way there are no surprise maintenance costs and costs are kept under control..

Retiree communities are not cheap. Renting would be cheaper. There are no surprise maintenance costs with renting. Landlord maintains it.
When/if they need nursing care it is likely that they will go on Medicaid.

Another option which people around the world use -

Why not they sell the house and move in with you? Then invest the money smartly for them, so they are getting some returns.

You charge them a acceptable amount for room, board and other amenities (without being greedy), so that they can live with dignity and they also save money from their SS. The saved money will be used to get them the nursing care or hospice care that they need at the end of their life.

Take some of the money they pay to get cleaning service, lawn service and inhome care etc at home, so it is comfortable for all of you. Make sure that there is an equitable sharing of their wealth after their passing with your sibling and your sibling is looped into all the major decisions.

You do not ask them for their house. Your DH can help them make a long term plan, but you don't ask for their house.

Might want to at least consider putting the home in a trust. It has to be in a trust for five years to avoid the lookback for end of life facilities can use that as an asset for payment.

They obviously can’t afford to live in the house anymore if they can’t afford maintenance and repairs. I am hesitant to recommend selling and renting since they may not be able to manage the money well. Perhaps selling and moving into a retiree community is best? That way there are no surprise maintenance costs and costs are kept under control..

Anonymous wrote:It does not sound like you can afford to give them 20k. If you do it at the risk of your own retirement, you are passing the burden to your children who will have to dig you out.

They should sell their house and buy a 150k apartment. Then they should both find part time jobs. Even if it is working at the grocery store for 15 hours a week. Every bit adds up.

If you give the 20k for this repair, what happens with the next repair. Today will be the roof, tomorrow the HVAC system, next year the windows etc

This. Maintaining a home is expensive. It sounds like they're pretty bad with money, so help them get set up in a sustainable situation. You may end up needing to pay the maintenance fee for the condo, eventually, though, so make sure that it's something affordable.

Someone mentioned it already - a reverse mortgage. It is a real and effective tool designed specifically for people like your in laws. It is called HECM, US government backed reverse mortgage. Given their age they should be able to get about 50% of their house value as a loan. They will not be required to pay either interest or principal on the loan as long as they occupy the house. But the principal and accumulated interested would become due the moment they leave the house. If they die and you inherit the house you would have to repay the loan or turn the house over to the bank. Worst case financial scenario for you just don’t get the house.

All these posts saying the 75 year olds should get part time jobs are ridiculous. My 80 year old parents can't reliably email, text or even hear well. I can't imagine themtrying to navigate applying online, clocking hours on some company app, getting trained or doing customer service of any type. The amount of help they need when we go to a store shows me they cannot be the one behind the counter.

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.

this is not hard. money has to come from somewhere. you have two options - not help them and live with guilt or blames coming your way for years to come or help them. elder care is a huge burden/expense, and you are slowly getting pulled into it.

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.

There isn't going to be money when its all said and done. When they need care, they sell the house for assisted living then go into medicaid nursing home beds.

Anonymous wrote:It does not sound like you can afford to give them 20k. If you do it at the risk of your own retirement, you are passing the burden to your children who will have to dig you out.

They should sell their house and buy a 150k apartment. Then they should both find part time jobs. Even if it is working at the grocery store for 15 hours a week. Every bit adds up.

If you give the 20k for this repair, what happens with the next repair. Today will be the roof, tomorrow the HVAC system, next year the windows etc

You buy a condo, not apartment and there are condo fees on top of repairs.

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.

They canot afford this.

They should sell the house and move into $1700 all included rental with no upkeep. They also need to get some kind of part time job instead of sitting around. The house money is enough to pay rent for 20 years.
They could have added money to Roth IRAs the whole time working part time til 75. Gotten EIC, saver's credit perhaps.