Can Reasonably Well Off Elderly Mom Afford A Nicer Home?

[rogue_economist]

Wow.

That's your view. Your entitled to your opinion. But unless we are talking about your estate planning (for money you already have), it's not your money, so it's not your decision.

The fact that the law allows people to dispose of their assets in whatever way they choose should not be confused with how people ought to actually disburse their assets. "it's not your money, so it's not your decision" is the recourse of those who cannot otherwise justify a course of action.

I might think that really, what is "right" is that everyone beyond $xxx,xxx level of wealth should give everything beyond a certain amount to charities to better the world when they die, because that's what's best for the world and future generations. And that they should live in the cheapest possible accommodations with the minimum amount of care possible to maximize those future charitable donations if they are past a particular age or lack of independence. [This is not my personal belief, certainly not to that extreme!] But I don't get to decide that for other people, anymore than potential heirs get to decide what is right for their elders to do with their money while living and their estates when they die.

Sure, you don't get to decide. You also aren't allowed to decide that grandma sending her life savings to that Nigerian Prince is not the thing to do. After all its her money, you don't have a say!

Just because someone isn't legally prohibited from doing something does not mean that everyone else should not council them not do certain things. People may not like to be told what they should do, but very often they need it. They can ignore good advice if they choose, but that isn't a reason not to give it to them.

You give a good example of why elders should be careful who they give their financial POA to, and to be sure that they are on the same page together about goals and wishes for the money while the elder is alive but needs assistance. If an elder giving you their POA and naming you as an heir agrees with your stance, that's fine and best wishes to both of you in that.

Fail to see how I'm a "good example" of that, unless you are implying that I would act in a manner inconsistent with my duty as a fiduciary in such circumstances.

[Tib]

Rogue, I was going to make these points on your behalf. Philosophical tangents are sometimes among the more interesting portions of a thread, even if not to the OP.

[AnnetteLouisan]

Hi all - sorry, I was busy.

1. In our family, individual finances are extremely separate. No taking advantage of the annual gift exclusion, for example.

2. Her money is hers. She earned it. She inherited about $30k, so she’s self made, if you will.

3. I was the driving force behind a potential move. I wanted to see her finally live better and possibly healthier. Since, as we determined, she can afford it. I thought it would be in her best interests and prolong her life, improve her mood and give her more exercise options.

4. She listened, but quashed the entire idea yesterday. She likes her neighbors and home is home. She said a move would be too strenuous for her. She also said she would not feel comfortable in such a spacious place where she doesn’t know her neighbors. The houses are more widely spaced in the new area, and some houses are summer homes not used year round, lending an aloof feel. She prefers her crowded but neighborly community and sees little wrong with her home.

5. She’s not particularly motivated by thinking of her heirs. She said she would not want to move even if money were no object. But she feels more comfortable not digging into her savings when she already had to for her aide expenses.

6. I’m an heir but consider that money entirely hers. As her agent under the POA, as a lawyer and as her executor, not to mention as her daughter, I’m ethically, morally and legally bound to act in her best interests. My conceit, lesson learned, was that I know what’s best for her. In fact, she may know what’s in her interests better than I do.

In any event, for such a big undertaking like a move, I’d want her to be ok with it, even excited about it. As time passes, we may have fewer choices but right now it’s still up to her.

We tried, thanks everyone.

[TN_Boy]

stuff deleted

Housing market isn't going anywhere, there is a massive supply shortage and millions of people trying to get into a house. Oh, and investment firms and foreign investors buying them up for rentals. And people need a roof over their head, demand is there.

Who cares. The point is not to maximize her wealth after 30 years. The point is to make her life as easy as possible, within the constraints of the money available, most likely for a relatively limited amount of time. There is plenty of money available. I'm not sure moving her and renting a larger house is the right move, but she can almost certainly afford it. Buying a different house instead of renting doesn't seem to change the overall financial risk to her situation.

Just because money is available does not make it right or wise to squander it. Her heirs will get the money when she is gone, so the more that is squandered now the less there will be to pass on.

As a software type, I can say that you have to understand the requirements .

Most of us who have been in this situation think the money is for the parent. I.e. the key requirement is not to preserve money for the kids, which seems to be your point of view. You have to be realistic -- e.g. trying to pay for 24x7 in-home care when the parent has only (as an example) 200k to their name and is likely to live several years is probably a mistake.

But in general, the parent's comfort is first, money to the heirs second. Exactly how best to spend the money can be a grey area.

The notion that the money is for the parent and not their heirs is a frequent assumption, but also a flawed one. It comes from people mistaking what is right with what the law lets people get away with.

Often that parent inherited money from their parents, why should they be entitled to burn up every cent of that family legacy at their death? They got to benefit from an inheritance, why shouldn't their children and grandchildren get the same consideration? Seems like there should be some base expectation to pay forward what you were given as it was freely given to you.
Even when someone didn't inherit anything they are often not spending "their money", its not uncommon for the man who was the sole or primary income earner to die a decade or more before the wife leaving her to spend the money. Spending a reasonable amount on her care is one thing, as that is likely consistent with his wishes, but feeling entitled to take everything and not pass anything on is dubious.
There is also a question of inter-generational transfer and equity here. The reality is previous generations had exceptionally good opportunities to generate wealth, some of which were purchased as a Faustian bargain of sorts that has left later generations with fewer opportunities to generate wealth. Passing along some of the surplus is the right thing to do.
Finally there is a question of utility of the money. Often it will do much more for someone who is young and starting out than someone who is in the last year of life.

So yes, I do think that passing funds on to heirs is an equal requirement with whatever reasonable care someone might need.

I'm will mostly skip your comments about who the parent's money belongs to -- your opinion is not universally shared -- because I think it is off-topic and potentially very contentious (certainly I could quickly .... not agree ....). So let's not go there.

However, I think it is on-topic to note that figuring out the "right" amount of money to spend on an aging parents care can be difficult. Sometimes the math is obvious - I gave one example previously. But often the decision is harder. A "nice" care facility at 6k a month? Or a really good one at 9k a month? The OP has already taken one expensive path -- hiring a 24x7 aide and keeping mom at home. Selling the family home and renting a "better" house is unlikely to change the picture very much, especially given mom's age.

Some people choose to do the caretaking themselves, a task that I would not wish upon my worst enemy, and would never ask a child of mine to do. But sometimes there are no funds for other options plus some children (and other relatives) feel called to accept this burden. And some parents feel that way; in one LTC thread a poster stated they expected their children to take care of them (hands on, bring them into the house etc) no matter what, because heck, then they could get a bigger inheritance. I thought this an extraordinarily selfish point of view, but cultures differ.

I was POA and then executor. I believe I always did "the right thing" in terms of spending their money, though it was literally taking funds out of mine and the other heir's pockets - any care expenses would be. But I wanted that person to be as comfortable as possible. Note also that some decisions benefit the caretakers as well as the patient (even if "all" they are doing is providing support, which in my case was the equivalent of a part time job). In general, the better the care, the fewer phone calls you get at 10 PM saying there is a problem that you need to start fixing. Well, I guess you could just stuff your "loved one" in the cheapest facility and not answer the phone. But most people don't do that if it can be avoided.

And no solution feels great. At even a good care facility at night, when staffing levels are low, your loved one might not get assistance in a timely fashion. Or when someone has dementia, they may be unhappy and anxious no matter what you try, and you (and others) will be finding ways to tell them no a lot. It's really sad when they keep asking you if they can go home, btw.

Interesting to see what decisions rogue_economist would (or will) make when in the position of managing someone's else life who needs help. It's not easy or fun.

[TN_Boy]

Hi all - sorry, I was busy.

1. In our family, individual finances are extremely separate. No taking advantage of the annual gift exclusion, for example.

2. Her money is hers. She earned it. She inherited about $30k, so she’s self made, if you will.

3. I was the driving force behind a potential move. I wanted to see her finally live better and possibly healthier. Since, as we determined, she can afford it. I thought it would be in her best interests and prolong her life, improve her mood and give her more exercise options.

4. She listened, but quashed the entire idea yesterday. She likes her neighbors and home is home. She said a move would be too strenuous for her. She also said she would not feel comfortable in such a spacious place where she doesn’t know her neighbors. The houses are more widely spaced in the new area, and some houses are summer homes not used year round, lending an aloof feel. She prefers her crowded but neighborly community and sees little wrong with her home.

5. She’s not particularly motivated by thinking of her heirs. She said she would not want to move even if money were no object. But she feels more comfortable not digging into her savings when she already had to for her aide expenses.

6. I’m an heir but consider that money entirely hers. As her agent under the POA, as a lawyer and as her executor, not to mention as her daughter, I’m ethically and morally bound to act in her best interests. My conceit, lesson learned, was that she may know what’s in her interests better than I do.

We tried, thanks everyone.

Thanks for the update. Best wishes to you and mom. Check into deducting the medical expenses .

[TN_Boy]

deleted

Fail to see how I'm a "good example" of that, unless you are implying that I would act in a manner inconsistent with my duty as a fiduciary in such circumstances.

If you are managing someone's life -- and that's what caretaking/POA/etc turns into much of the time -- it's not all about the money. It's about making health care choices for them, such as whether to treat a condition or not. They want a pet; how do you respond to that. They are not eating enough. How do you respond to that? If you care about the person, you want them to feel safe and be as comfortable as possible. Do you visit enough? Do you know the staff (by name) that is taking care of them? Lots of non-$$ issues.

Most of us find managing the money (assuming adequate resources) quite a bit easier than all the other tasks involved.

[LotsaGray]

Nope, stay away from rentals in retirement. The lack of cost certainty on your largest (or possibly second largest if healthcare becomes major) expense is taking on too much risk.

Apparently already has some. Not an additional risk.

OP she can do anything reasonable she wants x

[Tib]

The mother’s preference is predictable. In Christine Benz’s new book on retirement, in which she interviews experts on various facets of retirement, I was especially interested in the section on retirement housing, which recommended a book I then ordered: Aging in the Right Place (iirc). It cited all the rational reasons that the elderly typically prefer to stay in their long-time home as long as possible, even though others may judge that they’d be better off elsewhere. At 80, and with no one like the mother’s dutiful daughter to help me in case of need, I think about these issues a lot. So far, I think the pros and and cons favor staying in my SFH. It seems the least bad option.

[PeninsulaPerson]

I’m an heir but consider that money entirely hers. As her agent under the POA, as a lawyer and as her executor, not to mention as her daughter, I’m ethically and morally bound to act in her best interests.

And God bless you for that.

You did what you could and let your competent mother decide.

It's never an easy situation even under the best of circumstances. Hope you're taking good care of yourself, AL.

[single2019]

Hi all - sorry, I was busy.

1. In our family, individual finances are extremely separate. No taking advantage of the annual gift exclusion, for example.

2. Her money is hers. She earned it. She inherited about $30k, so she’s self made, if you will.

3. I was the driving force behind a potential move. I wanted to see her finally live better and possibly healthier. Since, as we determined, she can afford it. I thought it would be in her best interests and prolong her life, improve her mood and give her more exercise options.

4. She listened, but quashed the entire idea yesterday. She likes her neighbors and home is home. She said a move would be too strenuous for her. She also said she would not feel comfortable in such a spacious place where she doesn’t know her neighbors. The houses are more widely spaced in the new area, and some houses are summer homes not used year round, lending an aloof feel. She prefers her crowded but neighborly community and sees little wrong with her home.

5. She’s not particularly motivated by thinking of her heirs. She said she would not want to move even if money were no object. But she feels more comfortable not digging into her savings when she already had to for her aide expenses.

6. I’m an heir but consider that money entirely hers. As her agent under the POA, as a lawyer and as her executor, not to mention as her daughter, I’m ethically, morally and legally bound to act in her best interests. My conceit, lesson learned, was that I know what’s best for her. In fact, she may know what’s in her interests better than I do.

In any event, for such a big undertaking like a move, I’d want her to be ok with it, even excited about it. As time passes, we may have fewer choices but right now it’s still up to her.

We tried, thanks everyone.

So NOW you are telling us that this was your idea?
The responses would have been different if you had mentioned that in your original post

[PeninsulaPerson]

So NOW you are telling us that this was your idea?

The responses would have been different if you had mentioned that in your original post

It was there in the first paragraph ...

She is considering a move to a larger, healthier, cheerier, serviced suburban rental I found ...

And then there was this:

Is moving to a new place something your Mother wants to do?

It wasn’t her idea originally but having seen a few options I showed her, she is realizing there may be benefits to a healthier, more spacious and cheerier place. Her current house is very far from ideal and she can afford something nicer but still in tune with her values and lifestyle.

The OP also gave a ton of other pertinent details in the original post and follow-ups.

Her mother is 90. In many families, the 50-to-60-ish kids having "ideas" and "hopes" for a 90-year-old parent with $$$ and a possibly-not-ideal home would be presumed.

The OP's original question was about affordability.

How would the responses have been different?

[TN_Boy]

The mother’s preference is predictable. In Christine Benz’s new book on retirement, in which she interviews experts on various facets of retirement, I was especially interested in the section on retirement housing, which recommended a book I then ordered: Retiring in the Right Place (iirc). It cited all the rational reasons that the elderly typically prefer to stay in their long-time home as long as possible, even though others may judge that they’d be better off elsewhere. At 80, and with no one like the mother’s dutiful daughter to help me in case of need, I think about these issues a lot. So far, I think the pros and and cons favor staying in my SFH. It seems the least bad option.

Usually the aging senior prefers to stay at home. Not surprising. I would. This may be a bad choice -- especially for a housebound senior, who can become very isolated, while a good assisted living facility might provide much better social interaction.

What usually happens, from what I've seen, is that the senior resists moving (for good or bad reasons) until they need more help than they can get at home. Either the family can't afford to pay aides, and/or the family burns out providing care. A lot of "independent" seniors don't realize how much help they are using. Especially if there is dementia involved.

At which point the family moves the senior, as respectfully as possible, because that is the only choice. In this scenario, usually the person being moved has less input than if the move had been made earlier, something all of us getting older should remember. But the exact path aging takes varies. Everybody does the best they can. At a minimum, the senior and/or their family should have a plan -- if I I/they can't stay at home, what will happen? Waiting until the crisis hits is not a good plan. Though usually, you need at least a mini-crisis or two before it becomes obvious to everybody that a plan is needed.

[TN_Boy]

Hi all - sorry, I was busy.

1. In our family, individual finances are extremely separate. No taking advantage of the annual gift exclusion, for example.

2. Her money is hers. She earned it. She inherited about $30k, so she’s self made, if you will.

3. I was the driving force behind a potential move. I wanted to see her finally live better and possibly healthier. Since, as we determined, she can afford it. I thought it would be in her best interests and prolong her life, improve her mood and give her more exercise options.

4. She listened, but quashed the entire idea yesterday. She likes her neighbors and home is home. She said a move would be too strenuous for her. She also said she would not feel comfortable in such a spacious place where she doesn’t know her neighbors. The houses are more widely spaced in the new area, and some houses are summer homes not used year round, lending an aloof feel. She prefers her crowded but neighborly community and sees little wrong with her home.

5. She’s not particularly motivated by thinking of her heirs. She said she would not want to move even if money were no object. But she feels more comfortable not digging into her savings when she already had to for her aide expenses.

6. I’m an heir but consider that money entirely hers. As her agent under the POA, as a lawyer and as her executor, not to mention as her daughter, I’m ethically, morally and legally bound to act in her best interests. My conceit, lesson learned, was that I know what’s best for her. In fact, she may know what’s in her interests better than I do.

In any event, for such a big undertaking like a move, I’d want her to be ok with it, even excited about it. As time passes, we may have fewer choices but right now it’s still up to her.

We tried, thanks everyone.

So NOW you are telling us that this was your idea?
The responses would have been different if you had mentioned that in your original post

Why? The OP asked if they could afford this plan, not if it was a great plan. The cost question was answered.

[MoreTaxes]

So yes, I do think that passing funds on to heirs is an equal requirement with whatever reasonable care someone might need.

Wow.

That's your view. Your entitled to your opinion. But unless we are talking about your estate planning (for money you already have), it's not your money, so it's not your decision.

There is no need for a "wow" here. Leaving an inheritance is often an important consideration. As usual, everything depends on the unique situation. But I don't find it surprising at all that not every elderly person would rather spend their money than leave it to heirs. My aging parent, now in a nursing home, doesn't want to be there primarily because she believes it is using up her kids' inheritance. She desperately wants to leave a meaningful inheritance, even though the heirs don't care about that.

[DebiT]

It’s interesting. I am 67,5 years widowed, with a mother who is 93 this week, widowed, and who moved to assisted living after relocating to my new area during Covid (near my young grandkids). She has a decent amount of money from the sale of her house, probably won’t run out, although I have worried about that before but finally let it go.

I am comfortable, although it has taken me a few years to truly believe that despite the obvious math. I am fortunate to have two sons who make very good livings. I’m pretty sure, though, that even if they didn’t, I view my money as a tool to not have to burden them with worries about how will we care for mom in her very old age? In the same way, I am grateful that my mom is safe, in a decent facility with some activities and kind staff. I am grateful that I can come and go, even take a trip, without having to worry about who will take care of mom for those hours or days. And I want that freedom for my kids.

There, I view my money as 100% for my care, for their sakes, and any remaining inheritance as bonus.