Incurring Debt for Elderly Parents

[Baylee]

my in laws have made the sibling with the land the one in charge of their finances at the end of life and they would inherent the property of the home.

What would sister do with the mobile home she inherited when they died (if they never moved down to her beforehand)?  Would she still move it down there?  Would she ask everyone to pitch in with the costs involved?

And was moving the mobile home down to her place her idea to begin with?

The sister plans to rent it out to their adult children after my in laws die. The sister has 8 children from adults down to age 9 or so. With the cost of living rising, it's becoming very common in our area for adult children, including married children with kids, to continue living with their parents for some time.

Yes, I saw that.  I'm asking whether this was the plan all along (ie. when the mobile home wasn't on her property).  And, if it was the plan all along, would she have paid for the move?   I'm also curious whether this whole move was her idea in the first place.

[james03]

We have no savings and no retirement, except a rental property we invested in and are still paying for.

That's a problem.

They couldn't afford to retire, but still could afford to smoke?  What's their monthly outlay on cigarettes compared to their monthly trailer rent?

Yeah, if each smoke a pack a day, that's $450/month.  They can go on budget nicotine patches and save more than half.

Someone said just kick in some money to help with rent.  The land owners are going to get septic and other utilities?  That's pretty nice if you pay for that.  Why exactly do they have to move?  Pay the $100/mo to help out with rent, and they can go on patches and pocket another $200.  Your $100/mo is $1,200 a year.  Even after 10 years you still aren't up to $15,000.  And that sounds low to install septic and utilities, plus move the trailer home.  $20K is more realistic.

I'd think about this very hard. 

[MamaBearJMJ]

Ah so the sister will also get additional money from the home and pay nothing in for it.  I already don't trust her.

It doesn't sound like you really wanted our opinions.  Do what you want.  I'm done here.

That's fine if you are done. I think I'm just looking for more of an explanation to defend your position. Is there something in the Bible, Catechism, or church teaching that could help me understand?

In my mind I'm thinking of several Bible verses (one from the Old Testament, one from Timothy in the New) that give clear examples of our obligation to provide and care for our own. Jesus says if we are asked for our cloak to give them two and be generous. We shouldn't count the cost to us when it comes to charity. But we also do need to be responsible and good stewards. So I'm looking for the balance in the theology. Everyone had opinions but I post this on a Catholic forum because all our decisions should be based on Christs teachings. I'm seeing a lot of people say to be selfish and think of myself but no examples in teachings can back that thought up.

We did the "right thing" in a similar situation.  I won't go into further specifics, but we paid $100,000 ($50,000 was new debt for us) to help out my spouse's parents.  So, I don't like the implication that I am telling you to be "selfish".

Besides, I wasn't opining about what is the "right thing" to do because your first post was not clear about what kind of opinion you were looking for.  You didn't ask for Church teachings.  It seems to me that you are really just looking for people to agree with what you think needs to be done.

I was opining on making sure you protect yourself and to be cautious before jumping into it.  That isn't being "selfish".  It's called being "prudent".  These things can go awfully wrong, but it also seems that that advice is not welcome.

It isn't against our Faith to protect ourselves when helping out our elderly parents.  Honoring our parents doesn't necessarily mean doing anything and everything for them.  We thankfully got a lawyer involved and it helped us immensely when things went "wrong" down the road (which also included a sister that appeared to be doing the "right thing").

Maybe you should consult a traditional Catholic priest who knows Church teachings, the Bible, etc.  This sort of situation requires proper interpretation of Bible verses, commandments, etc.  None of us here can do that.  But I bet that a good and holy priest wouldn't say consulting a lawyer would be "selfish".

I apologize for not being clearer about wanting moral advice from the beginning. I specifically joined this forum to get a Catholic perspective rather than posting on social media, and that was just in my own head from the beginning without articulating it.

While I am admittedly stubborn, asking these things is me "not jumping in", and I am taking all of these responses in. If someone convinces me I'm wrong then I will heed their warnings.

I also didn't mean to indicate that you were somehow selfish in your decisions when you did "the right thing." This is a VERY gray area and I hate gray areas. It just seemed like many were saying "no" without a satisfactory answer as to "why" when we do own our parents.

And yes, I totally agree our obligation to our own children and family comes first, 100%.

I do plan to consult our priest, but they were literally in the confessional line behind me this saturday and it wasn't a good time to ask him since there was a long line for First Saturday.

They couldn't afford to retire, but still could afford to smoke?  What's their monthly outlay on cigarettes compared to their monthly trailer rent? 

I would be leery of them taking out their own loan because what happens if they default?  Will their children need to co-sign?  If they haven't been financially responsible up to this point, that's definitely not a good risk.  Financial irresponsibility is what started our need to help our parents and we knew right from the get-go that we weren't going to rely on them going forward.

THIS! If the in laws take out the loan, they will have to use the trailer as collateral. If something happens to them (they default, ones dies and they can't pay, etc) then this will be a surprise "emergency" the family will have to deal with. Which I don't like. I'd rather be in control now, you know?

my in laws have made the sibling with the land the one in charge of their finances at the end of life and they would inherent the property of the home.

What would sister do with the mobile home she inherited when they died (if they never moved down to her beforehand)?  Would she still move it down there?  Would she ask everyone to pitch in with the costs involved?

And was moving the mobile home down to her place her idea to begin with?

 

I'm not sure what the sister would do in this situation.  Possibly sell the trailer and either keep the money or share it between siblings. Or, move the trailer herself and keep all proceeds.

To give a little background on the sister: I think she definitely has good intentions. She is very responsible with her money. She even helped my husband when he was younger and irresponsible. I think the parents recognize that fact and that's why she has been given control over the finances for end of life. However, the impression I get from her is that she is slow and methodical. Based on our last conversation she wants to save up money monthly and then if they have to borrow money to finish it this summer, they could lower the amount of money borrowed. She didn't specify if that is HER borrowing money, the IN LAWS, or us all pitching in. So I need more clarification on that part. That approach all sounds good financially for herself and responsible, only here is the problem:

she has no life experience with dealing with contractors and construction. My husband is a contractor and we work with these things day in and day out. We've also had personal experience on our own property. If she does it that way, I feel confident there will be problems. She will wait until late spring or summer, then try to get everything in motion and by then contractors will be booked out, they will fall behind schedule, and then winter will come here in the north and my in laws will be walking up a hill to her house to use her septic system in the cold and dark and risk a fall. If they want them settled with hook ups before winter they need to line up a contractor with a down payment before the end of March. And they aren't thinking that far ahead. The sister wants to do it little by little as they can afford. Weather with all the digging and rain in the spring can really set you back, too.

We have no savings and no retirement, except a rental property we invested in and are still paying for.

That's a problem.

They couldn't afford to retire, but still could afford to smoke?  What's their monthly outlay on cigarettes compared to their monthly trailer rent?

Yeah, if each smoke a pack a day, that's $450/month.  They can go on budget nicotine patches and save more than half.

Someone said just kick in some money to help with rent.  The land owners are going to get septic and other utilities?  That's pretty nice if you pay for that.  Why exactly do they have to move?  Pay the $100/mo to help out with rent, and they can go on patches and pocket another $200.  Your $100/mo is $1,200 a year.  Even after 10 years you still aren't up to $15,000.  And that sounds low to install septic and utilities, plus move the trailer home.  $20K is more realistic.

I'd think about this very hard. 

I 100% agree it could even be over 20k. My husband just finished a job on a new construction home. He called the guy that did the septic and cistern and he said roughly 11k-14k and it could be 3k more depending on if the governing body says it needs to be engineered. But he was willing to work with us on cost if we do some of the excavating, which we have access to and people in the family have experience with. So we are trying to cut the costs down. So my hope is we only pull out money for the septic and cistern and have other people help with moving the trailer and other utilities. I don't think I'm willing to cover it all.

Regarding the smoking thing- you're way off on your math. My husband smokes half a pack a day and it costs about $70 a month. We buy bulk tobacco and filters and roll ourselves, as do the parents. They get the even cheaper stuff because my husband likes his methanol's and special filters. Even with the both of them I doubt it's over $150, and they probably eat less since it's an appetite suppressant. I'm not justifying them smoking at all, but there's no way they'd go on patches, and you can't force them.

Regarding our own lack of savings and retirement- our situation is a little different because we are self employed. About 3 yrs ago we had a profitable year, had no debt besides mortgage, and so we were able to just pull out 40K that year. That's when we invested in the rental property and should have it paid off in 10 yrs (and it's currently paying for itself as a rental) at which point we can sell etc. We've continued to do well but in this economy things are unpredictable and I don't want to RELY on it. But the hope is that we are in prime earning years and we should be able to start taking out large draws for savings/retirement soon. We did have some unexpected medical bills a couple years ago and such so we got a little behind. I'm in my 30's and my husband in his 40's. It would be nice to miraculously know how the business will do this year, but we don't.

Well the adult child of the sister who is going to benefit (no qualms about that) could take out a 15k loan for the mobile and then once in writing, the mobile belongs to the grandchild when both grandparents are gone.  The gp could pay off maybe contribute to the loan of 300$ per month until its paid off.

That's an alternative but the potential problem I see with that is the adult child may end up marrying and her situation change. Right now the adult child is almost 30 and single but wants to marry. They have so many kids I don't think it's a solid plan for that one child to use it, just a "we'll have the extra space if one of the kids want to utilize it" sort of thing.

[Baylee]

MamaBearJMJ,

I recognize that much of my input is biased due to my own terrible experience in a similar situation.    However, you should consider others' experiences/concerns as part of your decision process. 

I do hope that your sister-in-law has only good intentions. At the start, I thought mine had as well.  Two years later, it was clear she did not have good intentions.  She was looking for us to finance her "good intentions". 

I never said you thought I was being selfish.  I was put off by your comment that I was suggesting YOU be selfish by not going through with this. That is why I provided more information on my situation to show you that I was not against helping out your in-laws/doing the "right thing" because we clearly did that ourselves. 

Again, my only concern is that you be prudent in going forward (if you end up doing so) and protect yourself in case your sister-in-law does not turn out the way you expect. It doesn't hurt to do that.  In my case, it definitely helped. 

On a practical note (assuming you go through with this):

1. I do agree with you about their smoking.  That is very unfortunate, but I don't think you should expect them to change that after all of these years.  They won't.  By that age, they are set in their ways.  If the 2 heart attacks haven't scared your FIL to change that habit, then nothing will.

2. I agree that dragging one's feet with any contractor in this day and age will drastically slow down getting the work completed.  Then again, I don't see why this whole move can't wait another year.  This is not an "emergency, got to get them down there ASAP" situation. Things are tight for them, but not impossible.  Besides, taking your time and not rushing into things may make things a lot clearer.
 
3.  If you do take out a loan, take it out as an equity loan/second mortgage, so you have the benefit of claiming the mortgage interest on your tax return.  There is no such deduction for personal loans.  And as I say this, given your own financial situation, I think consulting your accountant/financial advisor in addition to a lawyer would be wise.

[awkward customer]

It doesn't hurt anyone to be aware of what can go on when it comes to money and families.

A friend of mine, along with two siblings paid their brother to organise a funeral plan for their aging mother.  For several years they all gave money to their brother to pay into the fund.

When the old lady died, the brother arranged a top notch funeral complete with horse drawn carriages, ushers in full funerary garb, the lot. 

And when it was all arranged, he announced that there was no money to pay for it, that they would all have to stump up again.  In his identical apology letter to them all, he admitted that he'd spent their money on Caribbean cruises.

[james03]

I apologize for not being clearer about wanting moral advice from the beginning.

With regards to morals, I don't think you have to do anything.  We're back to my question: Why are they moving?

And then we get to the smoking.  They can put back $100 per month (seems low) if they quit.  Are you ordering them to smoke?  Obviously not.  Your boomer in-laws can take some responsibility for once in their lives and realize they screwed up so now they need to quit smoking because they can't afford it.

Now if you do go ahead and contribute your hard-earned cash, which you have because you sacrificed and were responsible, I'd get a promissory note from the land owners that either they pay it back, or you can have an ownership interest in the trailer, which is going to run around 20-25%.  So they can either pay you all off, or you get say 25% of the rental income in the future.

At the end of the day it's your husband's family.  You can advise him, but at the end of the day obey and support his decision.

[moneil]

I'm not an expert on this, but I am on the board and an active volunteer with a local St. Vincent DePaul Conference, and we deal with these situations on a regular basis.

Without knowing more it is very inappropriate for the forum to "blame the parents" for not having savings and other resources available to them, though that is a problem as James said.  Other than the daughter-in-law none of us know their circumstances or what challenges they faced.  Even if their financial condition is due to poor decisions on their part there is an obligation in charity to assist them as one is able, I believe.  The question is how best to do this.

The first thing that came to mind is that in many areas municipal housing authorities and organizations such as Catholic Charities offer housing options for seniors and others.  With these programs one pays 30% of their income for rent (and I believe including utilities) and no more.  If these were available they could sell the trailer and maybe have a nicer habitation at a lower cost.  However, I'm sure these units would be non-smoking.  Some have balconies (and often residents have small gardens on them) where maybe they could smoke?

The current $600 per month lot rent needs to be compared with amortizing the cost of moving their trailer and installing utilities on the land.  Could it be more cost effective for the children to collectively help with the lot rent in exchange for jointly inheriting the trailer or setting up a reverse mortgage type of arrangement?  That analysis should be looked at, if it already hasn't been.

The OP is correct that Medicaid does not offer housing assistance, unless one needs to move to an assisted living facility.  I don't know exactly what the criteria is, but with their age and health that might be an option at some point.  Smoking would be the issue, they would have to go outside.

One has an obligation to care for their parents, as our parents once cared for us, but not an obligation to be taken advantage of.  When the estate is settled the remaining assets should be (in my opinion) proportionally distributed to the children who helped the parents.  If one of the parties is in a position to forgive all or part of the "debt" or have their assistance be a gift that would be appropriate when the time comes, but not until then.  These arrangements should be in writing, and liens recorded as appropriate.  If the in-laws balk it seems like you are "holding the cards".  If they finance the whole arrangement they should inherit the trailer.  If you are making a $15-20 k investment in the arrangement, you have a legitimate claim against future sales proceeds or rental income from the trailer.  Again, this should be in writing.

The parents also need to be in on the conversation, and they need to treat their assisting children fairly.  I may be misreading things, but one family providing land they have (with no real impact on their monthly cash flow) and inheriting the trailer, and another family putting up a substantial cash investment without any assurance of reimbursement or ownership interest in the trailer or land, that's not fair.  And they really need to face the smoking issue, and yes, it is a challenge (I quit chewing tobacco about 25 years ago, wasn't easy but I made it happen, nicotine gum helped a lot).  They can quit and enjoy a better living arrangement and more disposable income, or enjoy the brisk winter air for smoke breaks, their choice, but they should contribute what they can to the solution.

[james03]

^^^
Summed up nicely.

[queen.saints]

As far as the morality:

St. Thomas says that children are obliged to help their parents when they are in need. Parents, on the other hand, he says are obliged to help their children their whole life, whether they are in need or not.




"Neither ought the children to lay up for the parents, but the parents for the children."

"the duty of children to their parents consists chiefly in honor: while that of parents to their children is especially one of care."

"it belongs properly to the father to receive honor from his children, and to the children to be provided by their parents with what is good for them. Nevertheless in cases of necessity the child is bound out of the favors received to provide for his parents before all."

"We owe something to our parents in two ways: that is to say, both essentially, and accidentally. We owe them essentially that which is due to a father as such: and since he is his son's superior through being the principle of his being, the latter owes him reverence and service. Accidentally, that is due to a father, which it befits him to receive in respect of something accidental to him, for instance, if he be ill, it is fitting that his children should visit him and see to his cure; if he be poor, it is fitting that they should support him; and so on in like instance, all of which come under the head of service due. Hence Tully says (De Invent. Rhet. ii) that "piety gives both duty and homage": "duty" referring to service, and "homage" to reverence or honor, because, as Augustine says (De Civ. Dei x), "we are said to give homage to those whose memory or presence we honor.""

"Since a father stands in the relation of principle, and his son in the relation of that which is from a principle, it is essentially fitting for a father to support his son: and consequently he is bound to support him not only for a time, but for all his life, and this is to lay by. On the other hand, for the son to bestow something on his father is accidental, arising from some momentary necessity, wherein he is bound to support him, but not to lay by as for a long time beforehand, because naturally parents are not the successors of their children, but children of their parents."

https://www.newadvent.org/summa/3026.htm#article9

https://www.newadvent.org/summa/3101.htm

[dymphnaw]

Why don't you just tell everyone that your family is too poor to help financially? Offer to drive the truck to move their stuff or help with maintenance around the trailer but make it clear that you can't afford anything else.

[Bonaventure]

We have an obligation to assist relatives and especially parents, according to our means.

You stated you have no retirement and no savings.

I believe it would be imprudent to take this on, and the fallout to you and your marriage would be not good.