Buying a house for Mom - Pros, cons, pitfalls?.

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Re: Buying a house for Mom - Pros, cons, pitfalls?.

Post by Freetime76 » Tue Jul 02, 2019 3:27 pm

Herekittykitty wrote:
Sun Jun 30, 2019 11:16 am
I suggest you get a copy of the divorce decree and read and understand it. It will have information that could help you help your mother including understanding what the decree entitled her to and may lead you to track down things, such as whether she did qualify for part of his military pension and for some reason either bargained it away or still is entitled and just didn't file for it. It will also show whether your father is required to send her a certain amount of money or if he is just doing it because he wants to. Knowing that will help you and your mother know how secure the money he is sending is, and if she is getting all she is entitled to.
Thank you for the references!
RE: divorce decree: I'm glad you suggested it, because it makes me feel better (I was the one who suggested pulling it :) ...We did go get the decree. Just as you said, it answered several critical questions, and combined with a few tidbits dropped here and there, we ended up with a much better picture of MIL's situation.

The saying "you don't know what you don't know" was apropos in this situation. We started to learn what we do and don't know and could help MIL sort through things better.

Again, thank you for thinking of this, too... the real question was much larger than the original post about the house :?

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Re: Buying a house for Mom - Pros, cons, pitfalls?.

Post by JGoneRiding » Tue Jul 02, 2019 5:10 pm

Why don you think a "house environment " would be better for her? My mom is a similar age in excellent health and active. All she talks about is moving to a small 2 bed condo where someone else cooks, cleans, and does meal prep! Of course my parents have lived 40 years in a large house and mom is sick of caring for it.

On that note alone I think it's a bad idea. You would be better off just telling her you will subsidize housing if/when necessary. On a similar note living in a large home (hard to get less than 3 bed inmost neighbor hoods) can be very isolating for older women and they can do much better in a ccrc or nice condo/apt

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Re: Buying a house for Mom - Pros, cons, pitfalls?.

Post by Freetime76 » Wed Jul 10, 2019 5:24 pm

Another update from OP, in case anyone is interested:

#1 Hindsight is 20/20: The whole "problem" here has been figuring out **what is going on** (emphasis added :) We've learned a good lesson that the problem you observe isn't necessarily the root problem. Here, we saw missed bills, overdrawn accounts, and an IRS debt, so we though it wasn't enough income. Hence, we floated the "solution" of stabilizing living expenses. After a lot of digging and stressed-out discussions, the **actual** problem is too many checking accounts not all connected together and being mentally overwhelmed as 10 years of disorganization came to a head in about 4 different ways all at once.

#2 The heavens have moved!!!! :D So proud of my MIL. I can't believe it. She's on a real, bona fide budget (Everydollar, for you Dave Ramsey fans - easy to use and "cute"...does the math without confusing spreadsheets/charts/graphs in a small font). She met with her accountant and started getting on a payment plan with the IRS. This isn't dealing with the housing situation quite, yet it is a Huge Step to be open with finances. Its really nice to see my husband's siblings working together on something, and my MIL is excited and happy to have conquered the demon (calling the IRS and getting #s for income/expenses into a budget was a scary/anxiety-filled task that kept getting put off).

DH and I are really happy for her doing this herself. Another poster had said she found it empowering to handle a budget herself, and MIL definitely seems to be in agreement. It is priceless that the accountant knew exactly what we were all saying (everydollar/Dave Ramsey plan - at least in terms that it IS a plan) and was encouraging but also no BS/no excuses. Interestingly, the accountant said to listen to us and not to the other siblings, and I really hope they don't hear that later from MIL :oops:

P.S. To answer the person above, the idea of a house was to get a mentally healthier living situation, to own an asset that could be sold later if need be, and to stabilize monthly living expenses for aging in place. Rent isn't stable (increases, unless we get MIL into subsidized or income-adjusted housing) and her income is fixed. Condos weren't first on the list because of HOA issues and special assessments. What I mean is that the family works in the trades and can take care of fixing a house, but we didn't want to write checks for high special assessments (common in 2 of the condo associations we know of, but have heard very positive things from Bogleheads/others about condo-living.... so can re-evaluate in the future... right now she's not moving). Not sure a CCRC would be in the price range (unless subsidized massively, again, not moving right now :) MIl and kids want to keep her living on her own resources as long as possible, rather than set up a perpetually subsidized rent just for her basic living expenses. She has plenty of income right now to cover rent if she gets organized, which she is doing, which is super-fabulous. Her income later likely drops, so we want to be prepared for that possibility, too.

Anyway, wanted to share our happiness - my DH had a 10,000 Watt smile after talking with his mom today, because she is handling this business. Wow :D :D :D
Thank you for walking with us for the past several days.

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Re: Buying a house for Mom - Pros, cons, pitfalls?.

Post by clip651 » Wed Jul 10, 2019 5:43 pm

Freetime76 wrote:
Wed Jul 10, 2019 5:24 pm
Another update from OP, in case anyone is interested:
Thanks so much for taking the time to update the thread, Freetime76! It makes threads so much more interesting and helpful to hear updates on how things are going.

And congrats on a really great update about the situation as well. It sounds like she is on the right track, and everyone around her is in a much better situation with things out in the open, and being handled. Way to go!


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Re: Buying a house for Mom - Pros, cons, pitfalls?.

Post by Fallible » Wed Jul 10, 2019 6:41 pm

Freetime76 wrote:
Fri Jun 28, 2019 1:06 pm
... I had the bright idea to buy a house for Mom (my MIL), with the main objective being to stabilize her living expenses. ...
Has she said she wants to live in a house and own rather than rent? Does she understand the loan and help needed from family members to make this possible? Does she have health problems, in particular those that are progressive and will be costly down the road? Is she familiar with senior housing options? It's hard to tell if she's playing an active role in any of this so that's wwhy I wonder if she understands everything that's going on and the consequences for herself and others?
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle

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Re: Buying a house for Mom - Pros, cons, pitfalls?.

Post by Tamarind » Wed Jul 10, 2019 6:51 pm

It's interesting that you talk about aging in place, OP. For my parents, who are a decade younger, selling their home and renting has been key to aging well in place. They were becoming less able to care for the property themselves, and too stubborn/cheap to hire in adequate help. Now they are renting they have so much less to worry about and it seems to give them peace of mind. They are in a LCOL area and rent is affordable.

We often get threads here from adult children trying to rescue a property that has been neglected so badly by the elderly relative that value is permanently lost without more cash infusions.

I would suggest that you set the extra money aside for now by investing it, but keep it "earmarked" if you like for assisting your MIL. She might need rent money first, but perhaps it'll be medical costs instead, etc. Cash is fungible as a house is not. You are not committed to fund everything forever just because the gift is liquid rather than real estate. Investing the money will let it continue to grow faster than inflation, and give you the maximum flexibility when she's ready to admit she needs help (which appears to be "not yet").

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