I'm new to this site but I'm writing because I feel like I'm drowning trying to help my mother these days.
My dad passed away in December 2019. I've spent the last month helping my mom start to understand her financial situation. It's dire. They had no plan, no savings and the small insurance plan they took out on my dad 18 months before his death is being contested by the insurance company so who knows how long it'll be before it's paid out, if it's paid out.
My parents were in the process of filing bankruptcy before my dad passed away. Without my dad's social security income my mom has a shortfall of over $900 a month for her budget, and that's being optimistic knowing how she spends.
I've outlined all this to her and showed her budget spreadsheets to clearly demonstrate where she's at now and how we can move forward by selling her house (which they owe nearly what it's worth due to multiple refinances) and move into a 62+ apartment community. She's 71 and independent. She has some mobility issues but capable of self-care.
My problem, is the sharks are coming out and trying to get my mom to refinance her house again with another cash out option. This cash out would just be a very temporary fix and put her right back in the situation she's in less than 5 years, and that's if she didn't spend a dime of the cash out on anything but bills.
I don't know how in the world to get her to listen to me. I know the idea of moving from her 4 bedroom home and downsizing to a 2 bedroom apartment is overwhelming her (and me to be honest).... but I just don't see a real way she can stay in her home. She lives on an acre and has an above ground pool... the maintenance of the yard and pool are more than she can handle and she doesn't have money to pay someone to do it.
She qualifies for low-income senior housing and we can get her on a wait list for a nice apartment. She'd need to sell her house, come live with us for a short time until the apartment becomes available but she's digging her heals in and doesn't want to budge.
If she waits to do anything, her credit is going to tank and they will want a co-signer plus extra money for the security deposit. My husband has said that we are not co-signing on anything for her due to their history of financial issues and bankruptcy (3 times in their lifetime). We have excellent credit. He also doesn't really want her moving in our home but is willing to concede that if he knows it's temporary.
I feel so overwhelmed with how to get her to listen, how to help her and how to get my husband on board with her situation now. I feel so stuck.
My brothers are useless in terms of financial help. One doesn't have a job and is living in an RV in her backyard sucking up her money (that's a whole other story) and the other one is barely keeping his head above water in another state.
I don't even really know what I'm looking for here... maybe just venting and maybe some ideas about how to get her to recognize her financial issues and deal with them in a positive way. She's never been alone since she was 16 so this is really scary for her to have to be the one to make all of the decisions. I'm trying to be sensitive to her situation but I just don't get how she can put her hands over her eyes and ignore what's clearly in front of her.
What is the financial difference between refinancing the house again and selling it, other than your concern the funds will be wasted? Is moving your mother temporarily into your household one way to keep your brothers from getting to the house proceeds? Would your mother be willing to sign a DPOA in your favor? Open an account with your name also on the account as DPOA and joint authorization required for cash withdrawals? Set her SS to be deposited into the joint account?
I think you might be better off letting your mother cash out the value of the house with a refinance IF you can set it up so the money isn't wasted. Those funds would allow her to remain in the house a few more months as she downsizes the contents and prepares for the apartment move as soon as it's available. Sale the house as soon as the apartment becomes available.
If your mother has never handled finances or taken responsibility, she may be perfectly willing to allow you to manage everything for her if you can come up with a plan that allows her to remain in her house for a few more months. It might be worth doing to enhance your influence over her future choices and therefore reduce your stress.
She doesn't want to have a joint account with this bankruptcy stuff happening, so that our credit doesn't get entangled with her issues. Maybe once the bankruptcy is done and we figure out what to do with the house, we can revisit a joint account.
My concern about refinancing the house vs selling it, is that the mortgage payment is only coming down $62 per month. She's $900 a month SHORT based on current bills. If she sells it, she no longer has a $1300 mortgage payment to pay. If she stays with us, that's money she can bank, if she moves to an rent controlled senior apartment that rents for $500 less a month that will help. Then she'll let her leased car go back and won't have to pay insurance on a car she doesn't have so, she'll be able to afford the apartment.
If she gets a cash out refinance, then she might be able to use that cash out to fund the difference for a few years (if she doesn't spend the cash out on anything else) but it's just pushing the inevitable down the road. At least now, she's in better health and more capable of making certain type of decisions. I don't want to get to a point I have to force her into anything. I'm hoping I can get her to see the light without taking over.
I also don't know if her having a $20K in cash in the bank, from the refinance will impact her being considered a "low income" senior. I don't want that to disqualify her and force her to pay market rates which are nearly as high as her mortgage.
So sorry that your Mom doesn't seem to understand. But really, they wouldn't have been bankrupted 3x if they understood money. Seems she doesn't understand that you can't spend more than she brings in. Not sure if you can teach her now. I had a very intellegent sister who died in debt because she never understood this. The only thing I can say is your going have to allow her just to lose everything. When she does, then you get her into a Senior apt that charges rent on scale. Keep her name on that list. You are not responsible for her bills. I would make it known that living with u is not an option. Maybe call Office of Aging and ask if they have a person who can go over Moms bills and advice her. She may listen to a stranger.
Thank you for your advice.
To answer your questions... I asked her too why she needed the extra bedroom. She just wants the space for her computer "office". She was an administrative professional in her younger years and having an office is a comfort for her. Plus it's a place where she can have a pull out couch or blow up mattress when her grandkids visit. They are all teenagers now so she'd like them to have a little bit of privacy.
She says they checked on the legalities of him living there and supposedly it's a legal here in Florida.
She finally was able to get her bankruptcy attorney to set up an appointment next week, so maybe I can get him to help me figure out a way forward. I'm hoping he can at least get her to listen.
This will come to a head when it does. You need to step back. As long as you are out there flailing to take care of all this no one will act for themselves and no one living nearer to her will help. Step away. She already knows all about how her financial stuff has gone to heck in a handbasket, as she is the one who did it. Not everything can be fixed. When Mom has nothing the state will step in and help her find housing. This all sounds brutal, but what she has done with her life is what is brutal, and she did it to herself. I am so sorry you have to witness it but I doubt you can do anything about it except to assist her in getting "on the list" and in selling the house when she wants to. As long as she is competent to act in her own behalf you have no choice. The short answer is "Mom isn't going to change now".
Thank you for your advice. I have to be honest, it's an intense struggle for me to step back and watch her go down this road without stepping in, if I can. That said, I'm still learning to let my teenager girls, who are 15 and 17, grow up, be independent and make mistakes too, so this is just as tough to watch my mom go through on her own. I know she's made her bed and I know my dad struggled to get control of there finances over and over again when he was here. She just doesn't listen and can't see the forest for the trees.
Your mom is fairly young and soundly stubborn. Tough combination with all that SHE is facing.
You can not force her to do anything. I know that you look at HER situation and your business acumen comes into play, making you ready to sort her out for her benefit. I learned the hard way that you are fighting a battle that isn't yours and you will die trying if you are not careful.
Can I suggest that you step back and let her do whatever she is going to do and let her deal with the consequences of her lifetime of choices. I know that sounds like a terrible idea, but she will never change her ways and you will be so immersed trying to save her from herself that you will lose everything that you cherish. If you move her into your house and she decides she is not going to move then you have to do a legal conviction to get her out. In the months and months you are battling her your family will suffer because you are so overwhelmed with her nonsense that you can't be there for them. Your husband doesn't want her there, so he isn't going to be helpful to you, he is just going to be angry that she and you have put his family in this situation. No win, lots of potential loss.
As for selling her house, you can not even evict your brother, she has to do it. So how could you sell with a squatter in the yard? You can't. You can't do anything in this situation because she is a competent, grown woman with rights. You have zero authority, so DO NOT assume the responsibility.
There is a reason for throwing a life ring to a drowning person and NOT swimming to them yourself, they will drown you to save themselves and then you both die.
Please help her with resources, getting dads social security benefits, meals on wheels, transportation department pass for the local senior/disabled transit, help for utilities through social programs and anything else available to help her. But you mustn't sacrifice yourself and your family to her.
I know that you are thinking how cold and callous, maybe, but I have tried to help a mom that spends money like she prints it and it never ends. She will not care about her situation and just blindly keeps doing the same thing that she has always done and I lose sleep trying to sort it out. No more, I know now that you can not care more about her situation than she does and you can not rescue someone that doesn't think there is a problem. Please save your energy for the time that she no longer has any choice but to change. Do not ever move her in to your home and never co-sign for anything.
You can turn this over to social services when she has hit bottom and they will ensure that she is not homeless and hungry. No guilt needed for stepping back and letting her make her choices and live with the consequences of them. She is not stupid, she knows that you will bail her out when it has all fallen apart, so make it very clear that she will be dealing with the consequences and you will not be bailing her out. This is the best way to get her to make decisions. This is what I am willing to do and when I am willing to do it, this is what will NOT be happening! Put it in writing and stick to it.
Sorry for being so long winded, I am freaking out that you are heading into the eye of a storm that will cost you more then you can imagine.
Thank you so much for your insight. I feel like I'm heading into a storm for sure. I'm trying to batten down the proverbial hatches. I will say, the idea of watching her fail, makes me sick to my stomach especially if I can try to head that off.
One of my husband's biggest fears is that she will come to the house and never leave. She stayed with us for 2 months each time my girls were born because I was on bedrest before and after each delivery due to complications. It was a strained between them then, even when both knew she was leaving.
I believe our marriage would take an irreparable hit if she did end up with us long term, but I honestly can't imagine the idea of my mom hitting bottom with nowhere to go. He would never have let his mother go this way but his parents had solid plans made before they passed away.
My hubby is adamant about us not co-signing anything and after reading the responses here, I'm feeling more confident about saying no. Our oldest graduates high school this spring and is heading to college next fall, so we have those expenses looming too. Our youngest is in 9th grade so we still have a couple more years of high school to get through. Not to mention her college life is looming too.
Yesterday, the bank already discussed putting me on her accounts as a joint owner, but she said no. After the representative left, she said she didn't want our credit to get pulled into her mess, so that's why she doesn't want my name on her accounts at this point. So, I guess that goes to show that she does understand, a least somewhat, what her situation is.
As for my brother, she's already warned him, he's going to have to take his RV and leave if/when she sells and there will be no place for him to stay in her apartment. Supposedly, he understands and is willing to move on. He's just not contributing anything and using her electricity, water and food. If he could contribute $400-$500 a month, then she might be able to keep her house. He does mow the lawn and take care of the above ground pool, but he's wishy-washy and we'll see just how long he sticks around when she stops giving him any money.
However, you are smartest to help her temporarily get on her grounding. If her husband died a month ago, she is still grieving and probably won't listen to a word about moving on. You may need to give her a little time, and shoveling out her home and getting rid of stuff quickly is probably not a great idea. You have already started planning though, which is great. The apartment for her sounds like a winner.
Some people aren't willing to help themselves even when they aren't grieving. But honestly the bigger problem to selling her house sounds like getting your brother off of her property. That is job number one and I would speak with an attorney about that. In the meantime keep talking to your mom and perhaps enlist the help of people she trusts like a pastor or friend that may help you plead your case.
Best wishes.
I have chatted with her best friend, because she listens to her. Her best friend is suggesting she just let the house foreclose. Don't pay anything and stay there as long as she can banking money until they force her out. My problem with that is I don't know how she'd afford to get into one of the senior apartments since her credit would be toast.
We see her bankruptcy attorney tomorrow and I'm hoping he can give us some guidance on what is in her best interests.
Could you take your mother to stay with you for two weeks, starting now?
Pack enough clothes and personal possessions to last her. Spend the two weeks getting her stable, and away from her home environment, and if time allows take her to visit the place you're hoping she'll be accepted for.
What I'm hoping is that this step right away from her house will make it less impossible for her to imagine being somewhere different. You'd also be able to leave discussions and come back to them when she's getting tired or overwhelmed (or you are).
It's such a short time since you lost your father, such huge changes she's facing, and all so complicated to boot. Is the enforced, defined break a possible idea, do you think?
I know she's grieving. The idea of leaving her home and getting rid of her "stuff" is truly overwhelming to her. My husband is really pushing back hard on having her come here for any length of time. She was here after a hip surgery and is one demanding person. I stayed with her when I got out of the service and my kids were toddlers and my husband was still up north waiting for his job to transfer down to Florida. It was a stressful month for her and I. I couldn't wait to leave her house and I can only imagine how things might get here for all of us.
I really don't know if she'd even go for a "trial". We'd have some rearranging to do in our house to accommodate her since we don't have a guest room set up at the moment. My office would have to get transformed into a bedroom so I know the hubs won't want to do all that just for a trial period.
My family had a very similar situation with my financially irresponsible inlaws. First, to legally (and more "easily") help your mom, you need some authority/control to act on her behalf. If you do not now have durable Power of Attorney for your mom, you need to get it. If she has been resistant to assigning anyone as durable PoA, you need to tell her that the condition for you to help her further is for her to give you (and your brothers, if necessary) PoA. Since it does not sound like she owns any assets other than her ss payments (house probs doesn't count since she owes so much on it), then I'm not sure spending the money to talk to an elder law/estate planning attorney will be much help, but you and your husband can decide this. It may be worth the money just to have an objective and knowledgable person advise you for an hour or 2. Your mom should go with you and hopefully she will agree to do the PoA if she hears someone else's perspective.
It would be best if she would assign you durable PoA before she ever has a cognitive test by her doctor. It should happen in this order so that your siblings or anyone else cannot contest the validity of the PoA papers because she needs to not be "incapacitated". I don't think a little memory loss qualifies, but I'm not an attorney. I believe your mom can apply for her husband's ss payments (to replace hers). You will need to make an appointment to physically go to the Social Security Admin office with her, with the correct documents (death certificate for sure, plus others so ask before you go). Even so if your mom is in a financial pit, this extra income won't be much help in the long run.
Next, do not worry about her "credit". She is in no position to be borrowing anything anymore, anyway. And as was emphasized by another commenter, DO NOT co-sign anything for her. Period. Those days of living off credit are now gone for her forever. My stepFIL's strategy was to not hold down a job but keep remortgaging the house and living off that. I'm not sure how he kept getting approved, but that's what he did. We just stopped any payments towards my inlaws debts because they couldn't hardly afford groceries or medical care.
In your ensuing conversations with your mom, it may go better and she may be more cooperative and trusting if you can keep your cool and have her see it as you being happy to help her manage things but it needs to be made as simple and easy as possible. This means getting all her bills and banking stuff online access. When I went in to help my MIL we found dozens and dozens of boxes of checks. Once you go into your mom's place and really take a good look, you may find more disarray and signs of trouble than you ever suspected. My MIL had $900+ in overdraft charges, etc. Honestly I think your mom is going to need Medicaid. So filing bankruptcy may not be necessary. Once she goes on Medicaid, and if she's the only one signed on her debts (cc's, mortgage, car loans) you may be able to just let the debts go into collections. If she has no money, there's nothing to collect and her credit score no longer matters. You won't be liable if you're not listed jointly. I will private message you more info.
We have two girls at home still, 15 and 17. One is graduating this spring and heading off to college next fall (hopefully). However, we are still trying to help her figure out HOW to pay for college herself. The youngest still has some time before she graduates.
It was rough when she stayed with us when my daughters were born and then when she had hip surgery. The same was true when I stayed with her for a short time after I got out of the service and was waiting for our house to close and the hubby to get transferred down here with us.
The reason I'm worried about my Mom's credit is because many of the senior apartments (even the ones that are rent controlled and based on being low income) require credit checks and larger deposits or co-signers in order to get into their apartments. So, I'm trying to keep her credit reasonable as long as possible.
I've tried talking to her about a durable POA but she's pushing back on it. We see an attorney on Monday, maybe he'll have some advice for us. I keep telling her I won't use it until it's necessary. But if we wait too long, I won't be able to get one and really help her out without a court order.
I'll check my PMs in a bit....
By sharks, I mean the refinance and mortgage people. She's received 3 offers for refi addressed just to her and not her and my dad, just in the last week. AND... one of my brothers (the one living in the RV), saw his golden opportunity to move in as soon as my Dad passed. She's always had a soft spot for him... and he knew it. I had a talk with him when I had to go pick him up. I told him every minute he was there, every dime he asked her to give him and every piece of food he ate, was money he was taking away from her and that much sooner she'd (and he would) have to leave her house. He's finally coming to see what I'm talking about. He was always able to wheedle money out of her even when my parents didn't have it.
We talk to the bankruptcy attorney on Monday, she and I will have a better feel for what her options are. I hate the idea of letting the house go into foreclosure. I think she could sell it or have Open Door or whatever buy it to pay off her loan. This might give her enough time to get downsized and come to terms with what has to change, not to mention she's not behind on the house payments yet... her credit cards... those are behind already.
i think you have to get her declared incompetent and then just start to handle this all without her consent.
as long as she has control, she will continue on this self destructive path. There probably isn’t anything you can do.
I am thinking she believes she will just live with you after she has blown through all possible financial resources...I strongly suggest to you that you make it clear to her that she will not be moving in with you AFTER she destroys what is now the only financial path forward.
in other words, unless she comes around...and quickly, you need to step way back and protect yourselves or she will drag you into bankruptcy with her.
And I agree with your husband you can not co-sign on anything for your mom.
I think the smartest thing is to sell the house as quickly as possible and (if it is for a short time as you say) move her in with you.
Start the purging process now. I hate the idea of renting a storage unit as once items are there it is "out of sight out of mind" but it would enable you to sell the house faster. (Other option would be have a an Estate Sale but those companies do take a % of the sales)
I don't know if it would help but you could become her payee for Social Security and you could establish a budget and give her her spending money for the week, month how ever you do it.
You probably will not be able to change her outlook, attitude about money but you might be able to keep her head above water.
Sign her up for whatever help she can get Medicaid, Food Programs, there are programs the Gas and Electric companies have for low income. If possible Food Bank or Pantry for some food items as well as programs like Meals on Wheels might help if she has a budget shortfall for food.
By the way a thought came to me...you can thank your mom and dad for at least one thing...you are probably more financially responsible because of the way they treated their finances.
Good Luck!
We have gotten an offer from OpenDoor that would allow her to pay the house off so she could move. It wouldn't give her any extra money at all. I think a private sale would net her more money but I don't know if she could stay in the house long enough to close without getting behind on her mortgage.
We talked about having an estate sale. She understands that they'd get a percentage of what is made and she's actually coming around to that thought. She has quite a few antiques that she's attached to and thinks are valuable. I personally don't think they are worth as much as she's hoping but I'm not an antique professional, so who knows.
My husband is really the best one to thank because I learned bad spending habits from my mother that have been extremely challenging for me to break. One thing this experience has taught my husband and I, is that we need to get our own later lives planned out a little better, just in case something unexpected happens.