HELP! Parents have $0 for retirement - how can I keep them afloat??

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nafreed
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HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Sat Oct 05, 2019 8:16 pm

Hi Bogleheads,

My aunt owns a NYC apartment that appraised (for arguments sake) at $800K. It's willed to me (for reasons that I'll spare you). My parents are both chronically ill with no retirement savings. When my aunt passes, does anyone have any suggestions on the most efficient way to maximize this asset to provide as much security as I can to my parents? I do not want to sell it, as this is the only asset my whole family has and I see the potential income it can generate over the long haul. This worries me greatly. I'll be seeking out a real estate attorney, but I trust the bogleheads' savvy investment strategies and practices.

Many thanks in advance!

N

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celia
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat!

Post by celia » Sat Oct 05, 2019 8:29 pm

I suppose you could sell the condo and move your parents to a LCOL area where the money would go much further.

How are their expenses covered now?
Are they on Medicaid?

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arcticpineapplecorp.
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by arcticpineapplecorp. » Sat Oct 05, 2019 8:36 pm

how much net income does the apt now generate? Short of selling or tapping equity, isn't the only option left to use the net income received to give to your parents? Seems pretty straightforward.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by whodidntante » Sat Oct 05, 2019 8:39 pm

One can live pretty cheaply in Iowa or Mississippi. It's surprisingly reasonable.

Regarding the condo, you could take a reverse mortgage, combined with renting or AirBnB'ing the space. Or you could sell it. If you sell, a SPIA could provide a predictable, guaranteed income stream for the rest of their lives. But I would probably take acceptable risks and buy securities with it. I'm assuming chronic illness means permanent disability and not terminal illness.

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nafreed
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Sat Oct 05, 2019 8:42 pm

arcticpineapplecorp. wrote:
Sat Oct 05, 2019 8:36 pm
how much net income does the apt now generate? Short of selling or tapping equity, isn't the only option left to use the net income received to give to your parents? Seems pretty straightforward.
Thanks for your reply. It doesn't generate anything now since my aunt still lives there (I'm trying to think ahead). I suppose there aren't many options.

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nafreed
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Sat Oct 05, 2019 8:42 pm

whodidntante wrote:
Sat Oct 05, 2019 8:39 pm
One can live pretty cheaply in Iowa or Mississippi. It's surprisingly reasonable.

Regarding the condo, you could take a reverse mortgage, combined with renting or AirBnB'ing the space. Or you could sell it. If you sell, a SPIA could provide a predictable, guaranteed income stream for the rest of their lives. But I would probably take acceptable risks and buy securities with it. I'm assuming chronic illness means permanent disability and not terminal illness.
All good suggestions thank you. Yes, not terminal.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by 2tall4economy » Sat Oct 05, 2019 8:46 pm

NYC rent to buy ratio is vastly in favor of renting vs owning, so the best answer is to sell it and then invest the proceeds as needed.

Apply for Medicare and related for your parents if possible.

Good luck.
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arcticpineapplecorp.
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by arcticpineapplecorp. » Sat Oct 05, 2019 8:50 pm

nafreed wrote:
Sat Oct 05, 2019 8:42 pm
arcticpineapplecorp. wrote:
Sat Oct 05, 2019 8:36 pm
how much net income does the apt now generate? Short of selling or tapping equity, isn't the only option left to use the net income received to give to your parents? Seems pretty straightforward.
Thanks for your reply. It doesn't generate anything now since my aunt still lives there (I'm trying to think ahead). I suppose there aren't many options.
oh, well then selling's out of the question now too. If the aunt is over 62 she could get a reverse mortgage and the money could be given to your parents (assuming the aunt's ok with this and doesn't need extra income). But there are problems with this of course:
1. there are costs associated with this
2. then you wouldn't be willed the property, it would be sold at the aunt's death (or if she needs to vacate the property--goes into skilled care long term, etc) to pay back the bank that gave the reverse mortgage
3. you can't tap all the equity, only a portion...and so on.

Are they on medicaid? Have you looked into whether they might be eligible for home and community based services (waiver for in home care paid for through medicaid)?

have you contacted the office of aging?
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

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nafreed
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Sat Oct 05, 2019 8:55 pm

arcticpineapplecorp. wrote:
Sat Oct 05, 2019 8:50 pm
nafreed wrote:
Sat Oct 05, 2019 8:42 pm
arcticpineapplecorp. wrote:
Sat Oct 05, 2019 8:36 pm
how much net income does the apt now generate? Short of selling or tapping equity, isn't the only option left to use the net income received to give to your parents? Seems pretty straightforward.
Thanks for your reply. It doesn't generate anything now since my aunt still lives there (I'm trying to think ahead). I suppose there aren't many options.
oh, well then selling's out of the question now too. If the aunt is over 62 she could get a reverse mortgage and the money could be given to your parents (assuming the aunt's ok with this and doesn't need extra income). But there are problems with this of course:
1. there are costs associated with this
2. then you wouldn't be willed the property, it would be sold at the aunt's death (or if she needs to vacate the property--goes into skilled care long term, etc) to pay back the bank that gave the reverse mortgage
3. you can't tap all the equity, only a portion...and so on.

Are they on medicaid? Have you looked into whether they might be eligible for home and community based services (waiver for in home care paid for through medicaid)?

have you contacted the office of aging?
Makes sense regarding the reverse mortgage. Yes, they're on medicaid. I need to look into any services as well as office of the aging!

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by cheese_breath » Sat Oct 05, 2019 9:43 pm

nafreed wrote:
Sat Oct 05, 2019 8:55 pm
...Yes, they're on medicaid. I need to look into any services as well as office of the aging!
Plus an elder care lawyer before you give them anything. If not done carefully Medicade might consider your help as income to them and rule them ineligible to continue on Medicaid.
The surest way to know the future is when it becomes the past.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by iljets10 » Sat Oct 05, 2019 9:59 pm

Is the apartment a condo or a coop? If a coop, you may not have a choice as most coops limit the amount of time you can rent the apartment out and assess additional fees to do so.

Condos offer much more flexibility.

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Watty
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Watty » Sat Oct 05, 2019 10:04 pm

nafreed wrote:
Sat Oct 05, 2019 8:16 pm
When my aunt passes, does anyone have any suggestions on the most efficient way to maximize this asset to provide as much security as I can to my parents? I do not want to sell it, as this is the only asset my whole family has and I see the potential income it can generate over the long haul.
If you inherited $800K in cash would you buy that apartment?

Probably not.

Sometimes you need to do things you might not want to do, the best thing to do would be to sell it if you do inherit it.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by willthrill81 » Sat Oct 05, 2019 10:08 pm

Determine their living expenses.

Determine their SS benefits (I'm guessing that they are both already receiving benefits).

Potentially sell the property if the gap between their living expenses and SS benefits is too large for you to satisfy on your own (i.e. based on your desire to keep the property).

Potentially use as much of the proceeds from the sale of the apartment to buy a single-premium immediate annuity (SPIA) to fill the gap between their income and expenses.

Potentially move them to a lower cost of living area, if their SS benefits and SPIA payout do not satisfy their living expenses with room to spare.
Last edited by willthrill81 on Sat Oct 05, 2019 10:10 pm, edited 1 time in total.
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by leeks » Sat Oct 05, 2019 10:08 pm

Do you have reason to believe your parents will outlive your aunt?
It seems premature to be worrying about an apartment you may inherit someday while your aunt is alive (and free to change her mind about her will and also free to spend down any equity in her apartment to support her own lifestyle or medical needs).
If she wants to give your parents any money while she is alive, that is her own business and I don't see why you would be involved (ie some reverse mortgage scheme).
It sounds like you are already thinking of this apartment as your own asset, and while it is admirable that you want to use it to help your parents, I would encourage you not to view a potential inheritance as something to which you are entitled.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Sun Oct 06, 2019 12:56 am

You seem to be conflating several issues.

Your parents are chronically ill and have no assets saved.

Are they working? Are they collecting Social Security? SSI, or SSDI?

Are they on Medicaid? Do they live in NYC?

Do they own or rent?

Frankly, your parents' financial well-being is not your responsibility, but if you want to help them out, reach out the their local Area Agency on Aging (the City contracts this our to private agencies like Catholic Charities) and get them hooked up with resources.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

phxjcc
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by phxjcc » Sun Oct 06, 2019 1:29 am

^this.

Your parents have no assets?

Ok, what is their revenue stream?
What are the sources?
What is their expense run rate?
Please provide every detailed line item expense.
What are the extra-ordinary periodic expenses?
CAR REGISTRATION, GLASSES, HEARING AIDES, ANNUAL CHECKUPS, LAB TESTS
Amortize those over 12 months and then look again.
Got everything? Good, add 10% because S)$& happens.

What is the monthly P/L?

What can you do to lower the run rate?

There is NO magic wand.

Do the work and report back.

The aunt's apartment is a red herring....unless you are thing of taking out a reverse mortgage on Aunty's property to cover your parents expenses. (Ding ding ding, I think we have a winner!).
If I was your aunt's lawyer I would file litigation to prevent that.

Come back when you have done (all of) your homework.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by RobLyons » Sun Oct 06, 2019 5:13 am

cheese_breath wrote:
Sat Oct 05, 2019 9:43 pm
nafreed wrote:
Sat Oct 05, 2019 8:55 pm
...Yes, they're on medicaid. I need to look into any services as well as office of the aging!
Plus an elder care lawyer before you give them anything. If not done carefully Medicade might consider your help as income to them and rule them ineligible to continue on Medicaid.

x2

An attorney can guide you much better in this situation. I am going through elder care now with my parents and just a few hours with an attorney will guide you better than a decade on this forum, no offense to anyone here.
"Great parenting sets the foundation for a better world"

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Stinky
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Stinky » Sun Oct 06, 2019 5:41 am

BarbBrooklyn wrote:
Sun Oct 06, 2019 12:56 am

Frankly, your parents' financial well-being is not your responsibility, but if you want to help them out, reach out the their local Area Agency on Aging (the City contracts this our to private agencies like Catholic Charities) and get them hooked up with resources.
Agree that parents' financial well-being is not your responsibility.

What is the plan for the parents if the aunt outlives your parents? How are your parents getting along day-by-day right now, without any savings?
It's a GREAT day to be alive - Travis Tritt

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Mr. Rumples » Sun Oct 06, 2019 6:04 am

As pointed out above, you need an elder law attorney. (I'm going through the process of screening for one now.) They are the only ones who can bring all of the moving parts together and determine their consequences. Its not going to be an instant solution; you are going to have to find an attorney, schedule the appointment which might be weeks down the road, complete forms detailing every aspect of their finances and make decisions regarding their care, some of which y'all may have never considered before.

Depending on the attorney, you may or may not have to pay for the initial consultation; depending on the attorney, the fee may or may not be applicable to any legal work they are going to do. The cost of the attorney will seem high at first, but compared to the cost of making a mistake and the time spent if you don't hire one, its peanuts.

Elder law is complex; while Medicaid is a federal program, states are charged with administering it and many of the rules vary from state to state; couple that with how much inheritance and real estate law varies from state to state, you need an expert in this complex field of law.

You may find an attorney who works alone and who only does elder law; you may want an attorney who specializes in elder law, but who is in a larger practice that also handles real estate. You may want an attorney whose practice has included attorneys who have served as court appointed guardians, or that may not matter...you have to think about what would happen to them if something happened to you. All of you have some difficult decisions to make.
Last edited by Mr. Rumples on Sun Oct 06, 2019 6:22 am, edited 6 times in total.

grettman
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by grettman » Sun Oct 06, 2019 6:08 am

Stinky wrote:
Sun Oct 06, 2019 5:41 am
BarbBrooklyn wrote:
Sun Oct 06, 2019 12:56 am

Frankly, your parents' financial well-being is not your responsibility, but if you want to help them out, reach out the their local Area Agency on Aging (the City contracts this our to private agencies like Catholic Charities) and get them hooked up with resources.
Agree that parents' financial well-being is not your responsibility.

What is the plan for the parents if the aunt outlives your parents? How are your parents getting along day-by-day right now, without any savings?
Are you referring to legal or moral responsibility? In a few years I will be facing a situation when my mom, who has Alzheimer's, runs out of money. She will be broke while I am on a glide path to retire at 57. I agree the financials aren't technically the OP's responsibility but morally it is tough thing to reconcile.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by grettman » Sun Oct 06, 2019 6:10 am

grettman wrote:
Sun Oct 06, 2019 6:08 am
Stinky wrote:
Sun Oct 06, 2019 5:41 am
BarbBrooklyn wrote:
Sun Oct 06, 2019 12:56 am

Frankly, your parents' financial well-being is not your responsibility, but if you want to help them out, reach out the their local Area Agency on Aging (the City contracts this our to private agencies like Catholic Charities) and get them hooked up with resources.
Agree that parents' financial well-being is not your responsibility.

What is the plan for the parents if the aunt outlives your parents? How are your parents getting along day-by-day right now, without any savings?
Are you referring to legal or moral responsibility? In a few years I will be facing a situation when my mom, who has Alzheimer's, runs out of money. She will be broke while I am on a glide path to retire at 57. Should I forgo my retirement and make other financial sacrifices so she can stay out of medicaid? (Rhetorical question that I am dealing with - I do not want to hijack the thread). So I agree the financials aren't technically the OP's responsibility but morally it is tough thing to reconcile.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by LittleGreenSoldiers » Sun Oct 06, 2019 6:16 am

To the OP,
I wish you well on what ever course you take.
Never mind those who say it is not your responsibility. There is a difference between responsibility and obligation.
I for one would move heaven an earth to take care of my parents.

Good on ya mate!

Mr. Rumples
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Mr. Rumples » Sun Oct 06, 2019 6:26 am

Many states, mine included, have filial responsibility laws. My state has them and it even includes a specific provision where the children may have to pay for nursing home care; from what I can tell, NY doesn't, but again, an attorney can tell you. In Virginia, there is criminal liability imposed for not complying. (Virginia's filial law dates back from English common law (the Elizabethan Poor Law of 1601); it was revised during the great legal reforms of 1776 and again in 1780 and imposed more burden on the family as it moved away from having the church pay for it and has withstood being tested over the centuries.)

https://law.lis.virginia.gov/vacode/tit ... tion20-88/

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Sun Oct 06, 2019 6:53 am

The point I was making about the OP's responsibility to his parents was to emphasize that his seemingly panicky, ill-conceived thoughts regarding a property he hasn't inherited yet were getting in the way of making a plan to actually HELP his parents.

Impoverishing oneself to give money to parents who can't manage their own is a recipe for disaster. Far better to start by looking into what help parents are entitled to and what supports exist in the community for folks in their situation.

NYC Medicaid is unusual in that it will pay for 24/7 in home care. Even if this couple doesn't need or qualify for fulltime support, they certainly should take advantage of what help is available before asking their son to fund it.
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Nate79 » Sun Oct 06, 2019 7:20 am

Sounds like they need to get a job.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Sun Oct 06, 2019 7:52 am

Nate79 wrote:
Sun Oct 06, 2019 7:20 am
Sounds like they need to get a job.
They are chronically ill.

This from the OP, 12 or so years ago: "I am extremely neurotic about my finances because I must achieve comfortability after witnessing my parents' drastic financial planning."

Perhaps he means disastrous?
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

Mr. Rumples
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Mr. Rumples » Sun Oct 06, 2019 9:32 am

There are at least two parts to this: what is the rational thing to do and how does that play into family dynamics. An attorney can help shield a son or daughter from the pressure which might come into play with a parent. You need to be aware of your legal liability if you sign documents; co-owner, co-signer, co-borrower, co-applicant they all mean different things and there may be some differences by state. The last thing you might want is to be unknowingly liable for $100,000 of nursing home debt; that could even affect your ability to get employment or loans for yourself.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by retire2022 » Sun Oct 06, 2019 9:46 am

nafreed wrote:
Sat Oct 05, 2019 8:16 pm
Hi Bogleheads,

My aunt owns a NYC apartment that appraised (for arguments sake) at $800K. It's willed to me (for reasons that I'll spare you). My parents are both chronically ill with no retirement savings. When my aunt passes, does anyone have any suggestions on the most efficient way to maximize this asset to provide as much security as I can to my parents? I do not want to sell it, as this is the only asset my whole family has and I see the potential income it can generate over the long haul. This worries me greatly. I'll be seeking out a real estate attorney, but I trust the bogleheads' savvy investment strategies and practices.

Many thanks in advance!

N


OP

I would seek Attorney on BH i.e. BSteiner and opine on this situation.

-Reverse mortgages could work however at the end of the period, residue value could be worthless at your aunt's passing.

-I would consider a family Trust if the Cooperative allows for transfer of Real Estate into one, it will cost money, I'd know of one which charges $2500 for this to occur.

Having a trust would make it easier than a will the former would avoid probate.

-NYState has Medicaid claw-back provision aka "look-back"

When an individual applies for nursing home Medicaid coverage, one of the key issues to consider when preparing the Medicaid application is whether any gifts or transfers by the applicant were made during the last five years. Medicaid requires applicants to disclose all financial transactions that occurred during the five years prior to the submission of the nursing home Medicaid application. This five-year period is known as the “look-back” period. In New York State, the five-year look-back is only imposed with respect to “Institutional Medicaid”—or nursing home—applications. There is currently no look-back for a “Community Medicaid” application (home care). The focus of this article is the five-year lookback requirement for Institutional Medicaid.


http://www.nysscpa.org/news/publication ... d-planning

The apartment can be seized or lein on the title by the NYS

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Wiggums » Sun Oct 06, 2019 11:29 am

This is definitely a tough situation and I wish you all the best. Hopefully there are services out there that can help your parents.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Turbo29 » Sun Oct 06, 2019 11:56 am

Mr. Rumples wrote:
Sun Oct 06, 2019 6:26 am
Many states, mine included, have filial responsibility laws.
I just Googled it, more than half of the states (28) have filial responsibility laws, NY is not one of them.

https://en.m.wikipedia.org/wiki/Filial_ ... ility_laws
It seems that the line oft seen here on Bogleheads, "Your parents' financial well-being is not your responsibility" may be untrue in >50% of the states.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Sun Oct 06, 2019 12:15 pm

Turbo29 wrote:
Sun Oct 06, 2019 11:56 am
Mr. Rumples wrote:
Sun Oct 06, 2019 6:26 am
Many states, mine included, have filial responsibility laws.
I just Googled it, more than half of the states (28) have filial responsibility laws, NY is not one of them.

https://en.m.wikipedia.org/wiki/Filial_ ... ility_laws
It seems that the line oft seen here on Bogleheads, "Your parents' financial well-being is not your responsibility" may be untrue in >50% of the states.
Yes, lots of states have filial responsibility laws. Very few of them chose to enforce them. Why? IMO because it makes ZERO sense to drain the assets of the next generation in order to fund elders. This is especially true in situations in which abuse or financial irresponsibility obtains. Most elders, if they are destitute can apply for Medicaid funding for NH care if that is what is needed.

There is an old proverb: "When a father gives a son money, both laugh; when a son gives his father money, both weep".

There was a very wise post here a few months back which encouraged folks to figure out the "limits of their responsibility" for parents who have been irresponsible with money and those who have mental illnesses that cause them not to understand where their best interests lie. We try to get those folks the care they need without mortgaging our own livelihoods or the future of our kids. We are undeniably responsible for caring for our minor children; that is where the priority lies.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by remomnyc » Sun Oct 06, 2019 1:46 pm

Whatever you do, do not give your parents money. You could disqualify them for benefits they may be entitled to. First, help them reduce their expenses as much as they can. Then, determine the delta between their income and expenses. If you can float the difference, pay those expenses directly. If you can't cover the delta, then help them apply for public benefits, Medicaid, senior housing facilities, etc. You should contact a senior center to see what resources are available in your area. An elder attorney can tell you what the laws in your state are for eligibility for various programs and how their finances should be structured, but if they have no assets, you may be able to skip this.

Forget about your aunt. She may outlive your parents. She may need to use the equity in her place. She may change her will.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by delamer » Sun Oct 06, 2019 1:58 pm

Specifically regarding he apartment, if it truly is the only asset owned by your parents’ generation of the family then holding onto it if your aunt predeceases them is a bad idea.

Having all the assets tied up in one illiquid asset is not prudent. What if housing prices crash and the apartment is suddenly worth $400,000? It has happened in other places.

Better to invest in a diversified liquid portfolio for their benefit.

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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Sun Oct 06, 2019 2:20 pm

####"I would consider a family Trust if the Cooperative allows for transfer of Real Estate into one, it will cost money, I'd know of one which charges $2500 for this to occur.

Having a trust would make it easier than a will the former would avoid probate."####

The apartment is the Aunt's asset. Presumably bought with HER funds and not a "family" purchase.

The fact that she has told the OP that she is leaving it to him is lovely. But her circumstances could change at any moment and she might need the cash that her investment represents to pay for her eldercare at any point.

The OP is panicked about the fact that his parents have no retirement savings and are in poor health.

The aunt's ownership of an apartment is neither here nor there in the scheme of things.
Last edited by BarbBrooklyn on Sun Oct 06, 2019 10:37 pm, edited 2 times in total.
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Hillview » Sun Oct 06, 2019 2:25 pm

I was in this situation 15 years ago. We moved them into a house with us and then a year later purchased a 2 family house and moved all of us to this house. We drastically reduced our run rate to accommodate their bills. We helped them manage their run rate to a degree (they were never good with finances). After our first mistake of loaning them money we never did that again. We paid their bills directly instead. Today my mom still lives with us (father passed away). I pay her medicare supplement bills and her electric/heat/cable/internet bills directly. With her social security she pays for her car insurance, gas and food as well as for anything she "wants" I check her credit card bills regularly to make sure she isn't getting herself into debt (father died with 30k of debt).

Good luck. It is very hard and an emotional roller coaster but for us there wasn't a choice of what we felt we needed to do.

Mr. Rumples
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Mr. Rumples » Sun Oct 06, 2019 2:58 pm

BarbBrooklyn wrote:
Sun Oct 06, 2019 12:15 pm
Turbo29 wrote:
Sun Oct 06, 2019 11:56 am
Mr. Rumples wrote:
Sun Oct 06, 2019 6:26 am
Many states, mine included, have filial responsibility laws.
I just Googled it, more than half of the states (28) have filial responsibility laws, NY is not one of them.

https://en.m.wikipedia.org/wiki/Filial_ ... ility_laws
It seems that the line oft seen here on Bogleheads, "Your parents' financial well-being is not your responsibility" may be untrue in >50% of the states.
Yes, lots of states have filial responsibility laws. Very few of them chose to enforce them. Why? IMO because it makes ZERO sense to drain the assets of the next generation in order to fund elders. This is especially true in situations in which abuse or financial irresponsibility obtains. Most elders, if they are destitute can apply for Medicaid funding for NH care if that is what is needed.

There is an old proverb: "When a father gives a son money, both laugh; when a son gives his father money, both weep".

There was a very wise post here a few months back which encouraged folks to figure out the "limits of their responsibility" for parents who have been irresponsible with money and those who have mental illnesses that cause them not to understand where their best interests lie. We try to get those folks the care they need without mortgaging our own livelihoods or the future of our kids. We are undeniably responsible for caring for our minor children; that is where the priority lies.
Yes, you are right. The Virginia law was written in 1920 when costs were much lower. From what I can tell, no case has gone to court to enforce the collection of nursing home care in Virginia; however, in Pennsylvania in 2012 after Maryann Pittias left the US for Greece and did not pay her nursing home bill, her son John who made about $85,000 a year was left with her nursing home bill of $93,000. He lost the court case and had to pay under Pennsylvania's filial law. Virginia law does include an exemption of the parent is on public assistance which is, perhaps, one reason medicare trusts are around.
Last edited by Mr. Rumples on Sun Oct 06, 2019 7:17 pm, edited 1 time in total.

renue74
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by renue74 » Sun Oct 06, 2019 5:57 pm

BarbBrooklyn wrote:
Sun Oct 06, 2019 2:20 pm
Delamer, the apartment is the Aunt's asset. Presumably bought with HER funds and not a "family" purchase.

The fact that she has told the OP that she is leaving it to him is lovely. But her circumstances could change at any moment and she might need the cash that her investment represents to pay for her eldercare at any point.

The OP is panicked about the fact that his parents have no retirement savings and are in poor health.

The aunt's ownership of an apartment is neither here nor there in the scheme of things.
+1. This is important.

I've had friends who were sorta, kinda banking on receiving timberland that could be sold off as an inheritance. Then, the older relative ends up selling it because of health issues and needed money.

You may or may not receive that property.

As others have said, you should consult an elder law attorney, discuss in detail your parent's financial status, and be ready to make tough decisions.

My mother is 68 and basically lives on $900/month, plus some elder care she does during the week. She's on Medicare, but at some point my wife and I will have to have the conversation with her about next steps.

Keep in mind...as I read recently here (and didn't really think about), but a 68 year old may live another 25-30 years. What happens during that time?!?

delamer
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by delamer » Sun Oct 06, 2019 10:17 pm

BarbBrooklyn wrote:
Sun Oct 06, 2019 2:20 pm
Delamer, the apartment is the Aunt's asset. Presumably bought with HER funds and not a "family" purchase.

The fact that she has told the OP that she is leaving it to him is lovely. But her circumstances could change at any moment and she might need the cash that her investment represents to pay for her eldercare at any point.

The OP is panicked about the fact that his parents have no retirement savings and are in poor health.

The aunt's ownership of an apartment is neither here nor there in the scheme of things.
Geesh, I started out my post with “specifically regarding the apartment.” How much clearer could I have been that I wasn’t addressing the parents’ situation in general?

I was working off of the OP’s point-of-view that it is an asset that might be available to the parents.

So I stand by my comment that if s/he inherits the property and needs money for the parents, that keeping the apartment and renting it is a bad idea.

BarbBrooklyn
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Sun Oct 06, 2019 10:30 pm

Delamer, my apologies. I was replying to someone's suggestion that the apartment be placed in a family trust. That wasn't you. I will edit. Again, I'm sorry.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

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HomerJ
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by HomerJ » Sun Oct 06, 2019 10:59 pm

nafreed wrote:
Sat Oct 05, 2019 8:16 pm
Hi Bogleheads,

My aunt owns a NYC apartment that appraised (for arguments sake) at $800K. It's willed to me (for reasons that I'll spare you). My parents are both chronically ill with no retirement savings. When my aunt passes...
Is your aunt MORE chronically ill?

Not much you can do as long as your aunt is still alive. And unless there is more to this story, it sounds like she is going to out-live your chronically ill parents.
The J stands for Jay

delamer
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by delamer » Sun Oct 06, 2019 11:24 pm

BarbBrooklyn wrote:
Sun Oct 06, 2019 10:30 pm
Delamer, my apologies. I was replying to someone's suggestion that the apartment be placed in a family trust. That wasn't you. I will edit. Again, I'm sorry.
Accepted :happy

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oldcomputerguy
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by oldcomputerguy » Mon Oct 07, 2019 7:11 am

This topic is now in the Personal Finance forum (mortgage, legal issues with financial component).
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

NameRedacted
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by NameRedacted » Mon Oct 07, 2019 8:49 am

Have you spoken to your parents and asked what they want to do? Surely you can't decide anything without talking to them first. They're not children.

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nafreed
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Mon Oct 07, 2019 4:01 pm

I just want to say thanks to all that contributed here. Yes, it's a little bit of a panicky post--sorry about that, my emotions got the best of me. I take personal finances super seriously. I've been a member of this message board for 12 years. I practice the Boglehead way. Perhaps, it's not my direct responsibility, but I can't turn a blind eye here. From what I gather, the consensus thinks consulting an elder care attorney is the way to go -- so I'm going to work towards doing that. Sorry if I didn't paint the clearest picture. I know it's not your guys/gals' job to solve my dilemma. Thanks again for your thoughtful answers!

N

BarbBrooklyn
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by BarbBrooklyn » Mon Oct 07, 2019 5:09 pm

Nafreed, I'm so glad you posted back. You clearly have taken the BH way to heart and in part, that seems to be a reaction to your parents' lack of thoughtful financial planning.

You shouldn't turn a blind eye, but neither should you let your parents lack of planning derail your financial health.

If you are going to help them out financially, it needs to be with consideration of what makes sense for both you and they, and that takes into account laws and regs that govern their benefits.

Seeing an ElderCare attorney is a great first step. Do some research first so that you have a framework for a productive session.
BarbBrooklyn | "The enemy of a good plan is the dream of a perfect plan."

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nafreed
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Mon Oct 07, 2019 8:06 pm

BarbBrooklyn wrote:
Mon Oct 07, 2019 5:09 pm
Nafreed, I'm so glad you posted back. You clearly have taken the BH way to heart and in part, that seems to be a reaction to your parents' lack of thoughtful financial planning.

You shouldn't turn a blind eye, but neither should you let your parents lack of planning derail your financial health.

If you are going to help them out financially, it needs to be with consideration of what makes sense for both you and they, and that takes into account laws and regs that govern their benefits.

Seeing an ElderCare attorney is a great first step. Do some research first so that you have a framework for a productive session.

@BarbBrooklyn <3 thank you.

Dregob
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by Dregob » Mon Oct 07, 2019 8:27 pm

I'm confused by your logic. How old is your Aunt? Your parents? If they are close to the same age and your parents have chronic health issues (sorry to be so blunt) isn't it likely your Aunt will outlive your parents?

Edit-I just noticed someone posted the identical question/thought.

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nafreed
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by nafreed » Mon Oct 07, 2019 8:41 pm

Dregob wrote:
Mon Oct 07, 2019 8:27 pm
I'm confused by your logic. How old is your Aunt? Your parents? If they are close to the same age and your parents have chronic health issues (sorry to be so blunt) isn't it likely your Aunt will outlive your parents?

Edit-I just noticed someone posted the identical question/thought.
Aunt is in poor health as well.

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FIREchief
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by FIREchief » Mon Oct 07, 2019 10:27 pm

Hillview wrote:
Sun Oct 06, 2019 2:25 pm
I pay her medicare supplement bills and her electric/heat/cable/internet bills directly. With her social security she pays for her car insurance, gas and food as well as for anything she "wants" I check her credit card bills regularly to make sure she isn't getting herself into debt (father died with 30k of debt).
Why are you paying for electric and heat for somebody who has money for a car and "wants"?
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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JoeRetire
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Re: HELP! Parents have $0 for retirement - how can I keep them afloat??

Post by JoeRetire » Tue Oct 08, 2019 7:02 am

nafreed wrote:
Sat Oct 05, 2019 8:16 pm
My aunt owns a NYC apartment that appraised (for arguments sake) at $800K. It's willed to me (for reasons that I'll spare you). My parents are both chronically ill with no retirement savings. When my aunt passes, does anyone have any suggestions on the most efficient way to maximize this asset to provide as much security as I can to my parents? I do not want to sell it
Let your parents live in the apartment rent-free. Then pay for the rest of their expenses out of your own pocket. Very efficient, particularly for your parents.

You haven't provided nearly enough information to get a useful answer. You haven't indicate anything about your parents income sources or their expenses. And it's not at all clear what is the actual situation regarding your aunt and the potential inheritance you have focused on.

While an elder care attorney may be useful, a fee-only, fiduciary financial adviser may be more appropriate. They can help you determine a budget to cover your parents' needs, and help you find a way to meet those needs given your own financial situation (which is what I assume you are actually seeking).
Don't be a lemming.

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