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In-laws in late 70s have net worth of $600 to 700k but 99% tied up in house that they own mortgage free. Savings almost depleted and fixed income will not cover basic, recurring expenses. If there are any unexpected expenses for home or health they are even deeper in the red. In theory, they could downsize and buy a nice condo or coop, put some proceeds away and also have much lower monthly costs (given they are currently paying $21k+ in taxes, home insurance, utilities, yard, etc.) on a 90 year old house.


Sale is not being considered however, as they are very slow to purge anything and they are very attached to their home...ie they are no different than many older individuals. Home equity line of credit they qualify for is limited (might last them three years) plus additional monthly payments for the line cannot be covered without outside assistance. Have looked into reverse mortgage but they are very resistant to the $20k closing costs and floating interest rate. There is another product -- Unison -- with low closing costs and no interest...the company invests in the home (no interest accrues) and they take a large % of the appreciation from the time they make the investment until the house is sold. Sounds interesting on paper but there isn't a lot of third party info available on the pros and cons. They do not have a financial advisor, nor do any of their children including me and my spouse/their son. We helped in 2018 with some unexpected expenses and other siblings may have as well, but that is not a sustainable solution given their age and the condition of their house...which probably needs a minimum of $10k of work today which has been deferred for years.


Any suggestions relative to a financial advisor who specializes in these situations and can provide them with a comprehensive view, and unbiased opinion, of all their options? They have asked for input from family members, but there is often too much emotion involved for construction discussion.

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My bad for not reading the entire post before I said anything. $21 K per YEAR.

This situation is very reminiscent of my folks. They could NOT keep up their huge house and yard, we were all raising small families and trying to deal with our own stuff--having to give up 4+ days a month to simply keep their lawns mowed and the weeds down was about all we could manage. They 2nd mortgaged the house and gave oldest brother $175,000--and there went any chance at a secure "retirement".

We tried to get them to rent out the basement to a family, which would have helped--in the end, they HAD to sell, under the gun and it was horrible.

Your IL's have a lot of options. But taking money from you kids shouldn't be one of them.

We're in the beginning process of "downsizing"--makes me laugh b/c our house is only 1800 sf, but it's a split entry and I simply do not want to have all these stairs. DH is giving me nothing but pushback---but in the end, I will get my way b/c I am sick and tired of shoveling snow off my car (he gets the garage) and hauling everything up and down stairs all day. I've had a cast on my broken foot for the last 5 weeks and thunking up and down those stairs all day is making him nuts....plus it hurts and it's dangerous, but half of the house is downstairs!

I am taking a page from my g-ma's book. Suddenly widowed at age 61, she took a year to grieve and breathe--then she bravely sold her "dream home" and moved to a condo. Never looked back. I know this took incredible courage and I appreciate it more as I am now older than she was when she did this. She lived 100% independently until a couple of months before her death.

Not planning will result in disaster and sadness--almost for sure. Mother and daddy dragged their feet so much it wound up that they had NO options but to move in with brother. 22 years now. And really. nobody is happy with this.
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Tothill Jan 23, 2019
Great post Midkid,

I am 52 and have a two level house, but I could put in a basement suite that would have ground level access. My plan in 10 years is to renovate the house for a suite, then move into the smaller basement suite. That will give me rental income and a no stairs home. I will still have access to the backyard and will not lose my neighbourhood.

I am not so wedded to living in this house that I would not sell it if that made more sense.
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Whichever way you slice it, and however governments regulate them, mortgages are loans on which interest is payable.

For young adults buying a house, it makes sense to take out a long term loan. Their incomes are likely to rise. They have years and years ahead. They will benefit from the increased equity in the house.

For older people trying to maintain a house and lifestyle that are beyond both their needs and their income, it is STUPID. It is STUPID to borrow money to keep up a house that you do not need and cannot afford to live in comfortably.

What if they outlive the cash they derive from the reverse mortgage?

Why doesn't every one of these products come with a specification showing the exact amount of money to be paid to the finance company in fees and interest?

And - this has got steam coming out of my ears - it will "enable them to stay HAPPY in their own home" Happy? Really? Not increasingly frail, disabled, at risk and isolated?

Reverse mortgage/equity release products are needless debt sold to emotionally vulnerable people through empty promises that prey on their fears. I can't think of a legal financial product that's more cynical in all its premises.
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AliBoBali Jan 25, 2019
This is one of the simplest to understand and most accurate take-downs of reverse mortgages I've ever read. lol You're spot on, CM, as usual.

I'm sure there are cases where the sentimental benefits may outweigh the common sense defects (wanting to stay in a certain neighborhood close to friends and family, perhaps), but in general, it doesn't make good financial sense to do a reverse mortgage in your older years.
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"Your ILs have a lot of options. But taking money from you kids shouldn't be one of them."

Midkid is so right. You set the precedent in 2018 of helping with some unexpected expenses. The other sibs may have, as well. As time goes on, though, chances are all sibs won't keep ponying up cash for the elders. Will your H insist on continuing to help them?

NO ONE should be helping them financially. Don't make that mistake again. As long as they can guilt their kids into doing it, there won't be any forward progress made in getting them to be more realistic.
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You want a financial advisor that you pay. This way they will take you as a client even without a brokerage account. The free ones are interested in running your brokerage account. A reverse mortgage is a bad idea. Selling the house outright will get you much more total money in the long run. Have you taken them to any free lunches at an assisted living? Once they see the place, they may be interested in moving. As far as the junk in the house, you help them pick what to take. Everything that is left, you can clear our. As far as repairs on the house, $10,000 sounds like a low number for repairs on a house of that value. Consult a real estate agent to see if you can sell the house without repairs. Please get them to a lawyer for power of attorney and health care poa/ directive. You will need these soon enough. In the meanwhile, stop enabling them by paying ANY of their expenses. They need to be forced to face reality. The are adults. Adults pay their own bills.
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AT1234 Jan 25, 2019
Excellent advice here, don’t go to “free” financial advisor.
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Do you think they would listen to a financial advisor if he/she said "You are over-housed. You need to downsize?"

There really isn't any magic formula except that you need to spend less than you bring in every year.

They are spending more of their income than they should and soon will have to tap the equity in their home. How they do that is up to them. And it sounds like they won't even consider it until they are convinced they can't keep going as they are. I agree with the advice to stop giving them money. People will resist the truth longer if they don't feel the consequences. Step back.
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MEP1965 Jan 21, 2019
I am in commercial real estate but the most numbers savy of the children and their spouses hence I have been asked to help. My MIL actually worked in residential RE many years ago and is trying to get her license up to date....I am not sure why. She wanted to take a break thinking about it until this spring, which coincides with a nice time to look at places. I will suggest to my spouse and his siblings in the near-term and hopefully they will suggest to her so she can get out when the inventory is highest. If they dont broach the topic...I will. It doesnt hurt to investigate and do the math. If she decides it still makes more sense to hold rather than put a few hundred thousand in the bank and cut her annual expenses in half, then we should all agree its her issue to manage. THX
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I believe the only way for anything to happen is for the kids to stop funding. Young people are supposed to fund their future, and the parents, the future of themselves and their kids. Never the other way with kids funding the grands or parents!! When our elders reach the bottom of the barrel, they are forced to make decisions they don't like.

Help them prepare for that eventuality by asking if you can have this or that that you know they would not take to a smaller house, and dispose of it - donate or sell if you like. If you are ever asked, "I don't know exactly where it is, but thank you so much for that!" The work that needs to be done on the house can be with the line of credit, now, so that the house is ready to be sold. Medical payments can be stretched out over time, but the need for house repair can come suddenly.
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Sometimes it is the whole process of downsizing and moving that causes all the resistance rather than the move itself, just the though of finding a new home and figuring out what to do with their stuff, let alone the actual labour involved, can cause people to shut down. Maybe the best strategy would be to do the leg work in finding a more senior friendly home in a nice 55+ community and then assure them that You All will take care of the details of a move and sale. Even if you have do it all it would save you so much grief in the long run.
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I am currently studying Personal Financial Planning and repeatedly the professors state that seniors are loath to sell the family home, even when it makes sense.

I am faced with that with Mum right now. Step Dad just died and she has considerably less income to work with. She owns her own home. When she complains that she will not have enough money I unemotionally state you have more than enough equity in your house to live very comfortably for the next decade. I do not offer her any financial support.

Mum is showing signs of age related decline, she talks about needing to write everything down on her calendar, but no diagnosed dementia at this point. She is still capable of learning new software on the computer, balance the check book etc. Her mother and mil lived in their own homes until a very short hospital stay prior to death, but she has outlived both of them and most her savings.

She wants to go on a trip with her sister to celebrate their 85 birthday this year. If she sold hte house it would be a no brainer.
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They are spending $21k annually in housing-related expenses including taxes; they are spending more with all other expenses taken into account and will be $5k in the red annually per my budget, which I worked up with their assistance and which does not have much fat in it. The have SS and a small pension and no investments and limited cash. Happen to live in a very expensive part of the country which makes it difficult with a limited fixed income, no investments and depleted savings. MIL -- who is lucid but has a very hard time making decisions about towels let alone something of this magnitude -- has come to me for assistance since I can run numbers for her, I am in the real estate field and I am less attached to the house, albeit I have enjoyed many a family celebration there and understand the decision is difficult. Prior to me getting involved they hadnt worked up an annual budget nor had they put together a five year capital plan of repairs for the house to understand how expensive this situation could become. They knew this day would come, my FIL left the decisions to my MIL and she hasnt been able to focus/decide. More recently the children have busy helping the parents on a day to day basis as there were health issues with FIL, so I was assisting more with the long view. My spouse regularly deals with any repairs he can handle, which helps. The children have discussed assisting financially rather than the parents taking out expensive loans, but at the risk of sounding awful, we have a mortgage, two kids in HS and going to college and I have other plans for my savings, hence I feel if they dont focus we can get left contributing for many years to come...which will make me extremely bitter. If they had no equity in their home that would be another (worse) story, however, they do and have a net worth significantly higher than many people their age...they just dont like their options. MY MIL is terrified she hasnt considered all options, so i have encouraged her to speak to her estate lawyer who may be able to give her advice or push her in the right direction. She hasnt done that because she doesnt have the $$ to pay him...which I have in the past indicated we would cover if it meant she would take some forward movement. Round and round we go...been several years now!!
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anonymous594015 Jan 21, 2019
One of the first things I saw in my husband's step mother was an increasing difficulty in making decisions. This was years before her Alzheimer's was diagnosed. (I'm not saying your MIL has Alzheimer's. I'm just saying that we stood for a good ten minutes in front of bottled water deciding which brand to buy and that was my first indication that something was wrong.)

Since you are in the real estate field, do you think you could show your MIL some downsizing options? I thought some of the continuing care communities were especially attractive. I think that it's hard to envision a life other than the one you currently live.

Full disclosure: I did this myself. I found a couple of places to show my (almost 90 year old) mother. We did tours and had lunch. It didn't really help. She still lives alone. What can you do?
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MEP1965, I assume your in-laws are clear minded, thus no memory issues. If that is the case, there is nothing you or your husband can do except try to advise them. Of course, that doesn't always work, as parents still viewed us the "kids" and what do we know :P

Good luck in trying to get your in-laws to downsize. I tried that with my parents, who were in their mid-to-late 90's. My Mom refused. Nope, nada, never. But Dad was ready to move as he was getting too tired of having the responsibility of home owner ship. But he wouldn't leave Mom behind.

Many elders are quite proud that they have a home that is mortgage free... it is a right of passage. That how it was generations ago. No one downsized back then.

Time to set boundaries. If your in-laws need help with household chores, remember it's not everyone's dream to have 2 houses to clean and 2 yards/houses to maintain. That is just too draining. Learn to say "no". They are still young enough to figure something out. Be careful, parents are really good at using guilt to get things done.

I assume the in-laws are living off of their monthly social security and probably a pension or two. Any stock dividends? If they own stock, they can sell it unless the dividend is healthy enough to give them funds.
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