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Home for Mother In Law

Posted: Thu Feb 20, 2020 2:43 am
by Dilbydog
So it’s become obvious to DW and I that we need to move my MIL closer to our home, (this is also her request) as she currently lives out-of-state. Some background:

MIL has a 2nd home with $214k mortgage that she was renting (at a loss) to her son. Son moved out, and left the house and property a mess. Holes in walls, all flooring and trim will have to be replaced, several cracked windows, etc. DW and MIL have decided to sell the property “as-is”, Agent seems to think we can get $275-$300k. We are currently paying the note on this property.

MIL has also let us know that she currently has $15k in CC debt and has been paying minimum for years. Finally, she also let us know that she has a $200k mortgage on her current home. (Zillow claims value of ~$500k FWIW) This is frustrating, as the home was paid off at one point. Current home needs new common fencing, a good coat of paint inside and out, and new floor trim. MIL is a retired federal worker, and she takes home a little over $4k/mo. There may or may not be funds in an investment account, DW is gathering up all pertinent docs.

Our thoughts are to purchase a home close enough to our place where we could check-in or she could come over daily. We’d like to keep the purchase price around $300k, which is what I think we’ll net after the sale of her two current properties. How should we structure this? MIL doesn’t want to be able to access credit or equity moving forward. We believe she’s realizing there’s some advancing cognitive decline and she doesn’t want the stress of dealing with her financials. Should we finance the new home (we’d prefer to move her into the new property and rehab her current home prior to placing it on the market) and then pay off once the other properties sell? Put 20% down and charge MIL “rent”? Something else?

MIL would prefer #2, I don’t know exactly why.

Should the property go into a trust, LLC, our name??? DW is worried property could be attached if MIL incurs large medical expense. MIL is currently on Medicare and pays for Kaiser supplemental. Will need to switch to BC/BS as Kaiser isn’t available in our state. Is this a valid concern?

These are uncharted waters us, and we want to do what’s best for MIL, any guidance is appreciated.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 5:58 am
by alec
If it’s just MIL, why buy a whole house that requires upkeep, etc. Why not rent?

When my grandmother was in her early late 70s, she sold her house several hours away, and moved into an apartment 5 mins away from my parents and grandkids (us).

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 6:20 am
by renue74
My mom is 68 and lives about and hour away. She's rented her entire life and probably only makes about $1500 to $2000 per month. (SS and senior care income)

At some point she will need to move closer to us. We've discussed her moving in, but recently I purchased a small 2 bedroom rental condo in a "good" part of town for $68K. It's about an 8 minute drive from our house and decent.

Our plan is to move her into that condo when the time comes. But for now, I rent it out for $850/month to a young couple.

As the other poster said....look at a rental...or a small condo.

Your MIL has demonstrated a lack of money management. No need to get her out of the thicket on her 2 houses to set her up in another. It can be frustrating when loved ones aren't logical with their money management, but they won't change.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 6:30 am
by Watty
It would be good to talk to a lawyer that specializes in elder care law to help figure out how best to handle her finances.
alec wrote: Thu Feb 20, 2020 5:58 am If it’s just MIL, why buy a whole house that requires upkeep, etc. Why not rent?
+1

She could rent for a year then after the other properties are sold you could figure out what to do for the long term.

It might also turn out that she does not like living in your area and wants to move back to where she used to live. If she is renting then she would also have the option of trying out some other place if she does not like where she is.
Dilbydog wrote: Thu Feb 20, 2020 2:43 am Our thoughts are to purchase a home close......
I would highly recommend against a typical single family home.

The problem is that these can be very isolating especially if she has to give up driving. My mom insisted on staying in the suburban single family home that I was raised in. I can understand that and it was her choice but that caused her to drive long after she should have given it up and as she aged most of her friends either died, moved away, or stopped driving so that she did not have a lot of social contact.

An apartment or condo in some sort of a senior community(not necessarily one with a long term care option) would give her a lot more chance for social interaction with people. That could be especially important since she would be moving to a new city and would not know anyone except you.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 6:47 am
by GeoffD
I lived this with pretty much those numbers. In a high cost of living area, $300k and $48k/year in income will fund maybe 5 years of assisted living and then another 3 or so years of memory care. If she spends it to zero before all that happens, either you pay the bill, put her up at your house as caregivers, or she lands in a double occupancy Medicaid warehouse.

You don’t want her spending that money. It’s probably ok to have it tied up as home equity until she can’t live independently.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 7:47 am
by forgeblast
I would think townhouse so there is no maintenance/upkeep. sell the first property, pay off cc etc and anything left over put it into getting the primary home ready for sale. then sell it and find something small for her. I agree about elder care lawyer and make sure will, power of attorney, directives are up to date too.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 8:10 am
by HomeStretch
+1 on renting a small apartment or condo with little upkeep in a complex where MIL can socialize. Having MIL nearer to you will enable you to help with financial and healthcare matters more easily.

Evaluate her financial position after your spouse gathers all the financial documents. Help MIL cleanup her accounts (you can put POA in place to make this easier) and come up with a budget. Hopefully MIL is not continuing to provide financial assistance to son as she doesn’t sound like she is in a position to do so.

The best course of action may be for MIL to spend down her assets after which she can apply for assistance, if available, to help with housing, healthcare, etc. You can supplement her income as needed if you are in a position to do so.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 8:12 am
by JoeRetire
Dilbydog wrote: Thu Feb 20, 2020 2:43 am Our thoughts are to purchase a home close enough to our place where we could check-in or she could come over daily. We’d like to keep the purchase price around $300k, which is what I think we’ll net after the sale of her two current properties.
You haven't said how old MIL is. Since she is on Medicare, she is at least 65.

But apparently she has debt and little money. She is experiencing cognitive decline. She is by herself.

She should either move in with you, or rent. She should not be purchasing a house now.

Re: Home for Mother In Law

Posted: Thu Feb 20, 2020 9:32 am
by Dilbydog
Thanks for the replies...Here are some responses:
MIL has two mid-size dogs that would make renting difficult. Separating her from the pets is a non-starter for everyone involved. She’s still independent and can drive. She and I did a grocery run during the holidays and her driving skills did not seem diminished. Cognitive decline may hav been too aggressive of a statement. Over the last few years we’ve observed that MIL struggles with increased stress, and makes decisions based on “what makes it go away quicker vs the most thoughtful decision”

In our area rent for a condo or apt close to us and safe would be in the $1500-$1600/mo range. A 30 year on $260k note pencils out to $1,070. Edit: we also want her in a single story residence.

MIL is 72. There will not be any additional support to my BIL, the events leading to this have created a rift. MIL and BIL are barely on speaking terms, and MIL has removed him from her Will.

Re: Home for Mother In Law

Posted: Fri Feb 21, 2020 11:43 am
by LadyGeek
I removed an off-topic post (rant). As a reminder, see: General Etiquette
At all times we must conduct ourselves in a respectful manner to other posters.

Re: Home for Mother In Law

Posted: Fri Feb 21, 2020 4:47 pm
by JoeRetire
Dilbydog wrote: Thu Feb 20, 2020 9:32 am MIL has two mid-size dogs that would make renting difficult.

Over the last few years we’ve observed that MIL struggles with increased stress, and makes decisions based on “what makes it go away quicker vs the most thoughtful decision”

In our area rent for a condo or apt close to us and safe would be in the $1500-$1600/mo range. A 30 year on $260k note pencils out to $1,070. Edit: we also want her in a single story residence.

MIL is 72. There will not be any additional support to my BIL, the events leading to this have created a rift. MIL and BIL are barely on speaking terms, and MIL has removed him from her Will.
(shrug)
I'd still advise finding a suitable apartment or having her move in with you.
But it sounds like your mind is made up.

I believe you wrote that mom would prefer that you "Put 20% down and charge her rent". So you should probably just do that.

I wish you well.