Elderly in-laws are house-rich and cash poor. What are their options since they won't sell the house?

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.

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.

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.

"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.

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.

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.

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.

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!!

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.

As your inlaws are only in their late 70's--they could need all the money they can lay hands on for 15+ years.

A LOT of people wind up in this situation, sadly. All their money is tied up--no liquidity.

I've only heard awful things about RM's so I'd be cautious there.

If they can afford 21K per month for upkeep on the house, etc., then they can certainly afford a VERY nice ALF apartment. Or a condo, where all upkeep is included--they may actually find that refreshing! I know, nobody ever wants to leave their home--but it sounds like the house is draining them dry. Selling it would put a nice chunk of cash in reserve.

ABSOLUTELY find someone who specializes in this kind of financial arrangement. We actually use our attorney for a lot of these kinds of decisions.

I agree with not getting family involved if your parents have all their decision making abilities.

The problem is that they don't WANT to move, right? And the house is packed with memories and junk, I bet. They don't want to deal with it, I'm sure.

Take it slow. It took us 3 years to get mother and daddy to realize they could not stay in their home--and during that time we were sloooooowly purging all the junk and trying to get the huge yard in shape.

Sadly, by putting off the decision for so long, they had fewer options. They SHOULD have kept my grandmother's condo and lived there--but they didn't "want to" and in the 2+ years after she passed, things went badly south for the folks and they wound up living with my brother. NOT a good idea--and 22 years later, mother is as unhappy with this situation as she was the day we moved her in.

Failure to plan---this will come back to bite them and they will be left with fewer options.

Initially, one of you family members needs to broach this subject with mom & dad. I'd find some professional help first, a few options and then let them make the appointments and decisions. Just be supportive but don't make the decisions for them (unless that's your JOB)--they will happier if THEY have made this life altering decision.