Would you borrow money from your children?

[pryncess527]

In my experience, those who ask are exactly the kind I'd probably never loan $$ to, because in so many cases the bad decision making isn't over . . . this situation sounds like one of those instances. I would not loan it, and I can't imagine putting my hypothetical children in that position.

If my mother needed it, I'd loan her anything I could in a heartbeat. But she's also worked hard to make sure she never has to ask. Which is exactly why I'd say yes.

 

[Bec3b1g]

Is this person willing to speak with a financial adviser who can present an impartial view of the situation? Maybe if they see what can be gained financially from selling off the assets, what sort of income they might be able to earn even from just the interest, how the sale of assets could eliminate credit card debt, etc.

Sometimes it's hard for a aged parent to accept advice like this from their children.

Unfortunately, no. Not willing to speak to a financial advisor. Person "would rather die."

 

[pryncess527]

Unfortunately, no. Not willing to speak to a financial advisor. Person "would rather die."

That makes NO sense!?!?! (I'm sure you know that, just expressing shock)
I can't wrap my mind around the thought that a person would rather die than meet with a financial advisor. How many people would LOVE to have enough in assets to need financial advice. What a silly thing to feel shame about, I can't understand that at all. Willing to borrow money, but not willing to do what tons of "rich" people do every day and talk to an expert? That's insanity.

 

[robinb]

The assumption is that upon death, the estate will pay back the money "borrowed" if there are any assets remaining

I agree with TMM, that's a load of crap. I *did* lend money to my mother for a debt that another relative ran up and she was paying it back until my step father died and there went the money she was using for debt payment. It was clear that she didn't have any extra to pay anyone anything she owed them. She swore up and down that she would set up her will so that I would be paid first but when she passed away 4 years later the only will that could be found was from 1973.

Do I regret lending her money? Yes and No. No, because while I "lent" her money, I was OK with not being paid back. I had the money and she said she needed it. Yes, because the money was wasted. My DH encouraged me to look into her financials but I was too trusting and stupid. I thought that the debt was a one-time thing caused by this other person. He was right. It turns out that she was so far over her head in her own debt and the money I lent her was just a drop in the bucket. She *should* have cut bait and declared bankruptcy at the time, but she continued to spend like a sailor. She eventually just stopped paying after my step father died and now there is a LONG line of creditors who want to be paid ... all of them before I see a dime.

OP, in your case it seems that the money will be, at best, a stop gap measure and your parents will continue to spend above their means. Be aware that any debt they currently have will follow them into death and the estate will have to pay their creditors before any of the heirs see anything. I'm assuming that the "assets" is a house. Perhaps they can get a reverse mortgage to help with their expenses.

 

[Bec3b1g]

Ha, wait until the person in question takes out the reverse mortgage or a home equity line of credit (which is what my dad did).

Fun times...not!

Now they are living in my brother's condo. They lived with my sister for 2yrs prior to that. I am next in line.

It never ends.

The house was originally paid for in cash. Credit card debt 10 years ago was eliminated through a line of credit on the house. Now, a line of credit and credit card debt both exist.

 

[pryncess527]

The house was originally paid for in cash. Credit card debt 10 years ago was eliminated through a line of credit on the house. Now, a line of credit and credit card debt both exist.

That seals it. The only thing they'd get from me is a gift copy of You Need a Budget.

 

[Bec3b1g]

......I'm assuming that the "assets" is a house. Perhaps they can get a reverse mortgage to help with their expenses.

Person has travelled all over the world and has acquired very expensive personal belongings, like Persian rugs, sculptures, etc. It would be very easy to auction off 1 or 2 of these items every several months and meet the shortfall.

The house is up for sale and has been for 5 years. It was built to a very specific taste with very expensive fixtures and finishes (50K custom dining room fixture for example) in a remote low socioeconimic area. The list price has been unreasonable for the area. It would not affect the list price to swap out a fixture or two.

I've never been attached to "things" so I don't understand the staunch refusal to sell. It seems illogical when the house is up for sale anyway and the fixtures will be sold with the house.

 

[robinb]

Person has travelled all over the world and has acquired very expensive personal belongings, like Persian rugs, sculptures, etc. It would be very easy to auction off 1 or 2 of these items every several months and meet the shortfall.

The house is up for sale and has been for 5 years. It was built to a very specific taste with very expensive fixtures and finishes (50K custom dining room fixture for example) in a remote low socioeconimic area. The list price has been unreasonable for the area. It would not affect the list price to swap out a fixture or two.

I've never been attached to "things" so I don't understand the staunch refusal to sell. It seems illogical when the house is up for sale anyway and the fixtures will be sold with the house.

Well, I understand not wanting to sell your treasures you have acquired over a lifetime. How old is the parent? Do they live alone?

 

[SLP958]

No.

 

[rrehman]

This is slightly off subject, but we borrow money from our children all the time (8 and 4). We rarely have cash on us, or in the house. If someone comes to our door for fudraising, we either write a check, or borrow cash off our children and replace it when we go to the bank.

 

[Bec3b1g]

Well, I understand not wanting to sell your treasures you have acquired over a lifetime. How old is the parent? Do they live alone?

90--No longer driving or able to shop for own groceries. Health is deteriorating. Lives alone and demands family help for day-to-day living.

 

[rwdavis2]

Apply for guardianship or power of attorney. If one of the kids refuses then let them pay for it all. There's no peaceful solution that does not require (I'm assuming siblings) that all 3 siblings to agree on a solution.

 

[jdb in AZ]

This is slightly off subject, but we borrow money from our children all the time (8 and 4). We rarely have cash on us, or in the house. If someone comes to our door for fudraising, we either write a check, or borrow cash off our children and replace it when we go to the bank.

If it's a quickie loan to juggle funds from one account to another, that's different from a large sum that probably won't be repaid.

 

[Dawnlight]

Apply for guardianship or power of attorney. If one of the kids refuses then let them pay for it all. There's no peaceful solution that does not require (I'm assuming siblings) that all 3 siblings to agree on a solution.

Yes, do this. Is there a current power of attorney or have things like this been neglected?

 

[robinb]

90--No longer driving or able to shop for own groceries. Health is deteriorating. Lives alone and demands family help for day-to-day living.

I guess I don't begrudge them wanting to live in their home surrounded by their treasures for the last few years of their life. I can also understand that, at 90, they doesn't want some stranger sticking their nose into their business.

This is a very difficult situation because I can sympathize with both the parent and the children. Maybe another home equity loan to over the monthly overages for 5-10 years? Would the parent allow one of the children to take over finances? I had to do that with my mom.

 

[hereyago]

But to get guardianship, wouldnt the
person have to be found unfit, mentally incapcitated? What if this persons mind is clear as a bell and just doesnt want to get rid of stuff to
help themselves?

 

[mnrose]

Hmmm. I hope I'm never in the position to ask my children for money!

That being said, my Dad was in assisted living, and then nursing home care for about 3.5 years before he passed earlier this year. His "income" was around $3000 a month from all sources, and assisted living was 3700; nursing home care was 8300....per month. You can easily see the problem. He had no savings of any appreciable amount. He did own 120 acres of good/great farm land. He very much did not want to "sell" the land....it had been his long time dream that he would be able to will that land to his children. Now, of course, NONE of his children had any intention of ever farming that land...indeed, it will be sold as soon as practical (currently under lease to another farmer), and proceeds divided.

It was clear that we had a cash flow issue. I had the money to "lend" him, taking a mortgage on the farm land to secure the loan. That is what we did. For whatever reason, he was comfortable borrowing money from me against the land, but not selling it outright.

Under similar circumstances, I could see doing something like that with my children. Lending my Dad money (at a modest interest rate, BTW) was a win/win. I was getting better rates than anywhere else I could invest my cash (this was money I prefer not to have in the stock market...I have plenty there LOL) for a better return, and it was a highly secured loan (the land being worth many times more than the amount I lent him.

 

[NewRVLady]

I feel for you, OP

When we suggested MIL get a "reverse mortgage " on her house , we thought that little extra every month would last for many years
None of us knew what bad shape her finances were in-she already had a 2nd mortgage on the house-so HALF of the money paid that off. She had to pay off FIL expensive end of life surgery...so now at 87 she has ONLY SS (under $1000 a month).

I know DH & I will have to pay for a chunk of her funeral costs and PRAY a little is left when the house is sold to pay us back....and WE are retired now.

 

[elaine amj]

My mom is sort of in this situation. She has been very very generous with us throughout her life and now she is in a bit of a financial pickle. She is willing to liquidate, but the whole liquidation process is probably going to take another 1-2 years. Once she does, she should be OK if she lives frugally the rest of her life. For now, she is managing.

Recently, she needed a fairly large outlay of cash and initially was going to borrow from my brother and I. In the end, she borrowed from her life insurance policies. I told her I was much happier with her doing that since it is not money for her daily living, but rather, an inheritance for my brother and I (and both of us consider that money hers, not ours).

I'm a little worried how things will end up for her. We came up with a plan that will work, but there's plenty of things that can go wrong. I think there is a strong possibility I may have to delay my retirement plans or something if I need to help her out more. The only thing is - I can realistically only help so much. DH and I live simple lives and what we can provide is a drop in the bucket for her lifestyle (and her current debt load).

 

[tina.tina]

The assumption is that upon death, the estate will pay back the money "borrowed" if there are any assets remaining.



No attempt to preserve an inheritance. Just a flat out refusal to sell anything. As to the why, maybe senility, pride, or a sense of entitlement?

This could also be solved by moving in with one of the adult children, but the person in question won't.

Unfortunately, no. Not willing to speak to a financial advisor. Person "would rather die."

90--No longer driving or able to shop for own groceries. Health is deteriorating. Lives alone and demands family help for day-to-day living.

But to get guardianship, wouldnt the
person have to be found unfit, mentally incapcitated? What if this persons mind is clear as a bell and just doesnt want to get rid of stuff to
help themselves?

It seems to me that a person who refuses to handle their own financial matters in order to take care of himself/herself and expects others to care for him/her is not thinking logically and is therefore incapacitated. It often seems that government programs are only geared to people who need financial assistance, but maybe someone from a Dept. of Aging could help?