Need advice...how to help parents

[mom2febgirls]

My parents live on the financial edge...they have had some really good years where their dreams have come true and some really bad years.

It has been bad a long time now. They have a house but it is mortgaged to the hilt and my sister has been paying all the bills (and living there) for a long time. But she's finally reached the breaking point and has decided that she can't afford the big house so she is letting the bank foreclose. They are moving out this month. We all thought my parents were going to get an apartment and be okay, but we just found out the IRS is taking most of what little they are earning.

I've offered to have my parents move in with us (we live on the opposite side of the country) but they are not on board. I feel it's not fair to my sister to have to keep supporting my parents and I can tell she is getting resentful.

I have had people at work telling me that I can buy my parents a house and write off almost everything...anyone have experience with that?

I'm at a loss and don't know what to do. We aren't rich...we save for retirement and 3 college educations and that takes most of our extra money...it'll be tough but we are willing.

 

[Sunnywho]

Are you ok if your parents don't keep up with maintenance on the gifted house or pay the tax or water bills or utility bills? I would think the risk would be high that they might not be able to manage a house, or that they would take out a refinance on the new house, and get right back into a bad situation.

A less permanent offering would be to pay their rent for a year. Are they utilizing any social/community programs that they might be eligible for? Section 8 housing?

 

[RitaE]

I'm going to assume by your statement of "we are not rich" that you really can't afford to buy a house and then support your parents in it .... indefinitely. I certainly can't recommend you throw your own retirement or your children's college savings to the wayside to support them.

I'm not sure what you mean by "You can write off almost everything." Perhaps they are talking of running it as a rental/investment property? Either way, you are not going to recoup much of what this will cost you in tax savings.

How old are your parents? Are they somehow of diminished physical or intellectual capacity that makes you feel totally responsible for bailing them out?

At this point you have offered to let them move in with you (which is a completely generous offer) and they have refused. I really don't see much else for you to do other than wait and see what kind of alternative plan they come up with.

 

[bumbershoot]

we just found out the IRS is taking most of what little they are earning.

Why? Can you start there, figuring out why the IRS is taking most of their money?

MIL is paying off a large tax debt to the IRS (note: if you have an abusive, sneaky husband, don't be surprised if he's lying to you that he filed taxes online for the 6 years before he died!), and they have been most reasonable with it. So it seems more than odd that they are taking *most* of their earnings.

 

[mom2febgirls]

I'm going to assume by your statement of "we are not rich" that you really can't afford to buy a house and then support your parents in it .... indefinitely.

We both have good jobs and we have no debt other than our house. I don't consider us rich, but we do have a decent amount of disposable income.

I really don't see much else for you to do other than wait and see what kind of alternative plan they come up with.

The alternative is to live with my sister indefinitely but I think she's done her share.

I am going to try to see a CPA this week and find out about investment property. They don't live in a high cost of living area so I was thinking $800/month would cover a small townhouse/condo. Ugh...I don't know...I just can't let them live on the street.

 

[clm10308]

Have you or your sister actually gone over their finances rather than just relaying on what they tell you? Is it possible that they are no longer able to take care of their money without assistance?

I would agree that perhaps renting them a small apartment would be a better option initially. Then someone could work with them on money management and help them either get back on their feet where they can support themselves or get them signed up for low income housing.

I agree that you can't let your parents be homeless, but if they refuse to come live with you, that is their choice.

Maybe they would agree to come stay with you temporarily for a few months to give your sister a break. Once they are there, then it might be easier to convince them to stay with you.

 

[Fjobe]

Since you are debt free, I assume you have been very repsonsible financially - I would hate to see anything ruin that for you. I would not go into debt (even a mortgage) for your parents. You wouldn't be letting them live on the street. You have offered to let them live with you and they refused. That was their choice. If you feel it is your job to provide them a place to live even after they have refused to accept your move in offer, maybe you should lean toward paying their rent for an apartment rather than taking on a mortgage.

 

[starry_solo]

I normally wouldn't suggest this, but can your parents stay in the house that will get foreclosed on? It takes at least 3 months (or so) to do a foreclosure, right? So, if they stop paying, they get notices of default for a few months, then the bank takes it away. Is the bank going to immediately evict them? Maybe the bank will give them a cash for keys deal?

This way, you (or them) can start saving up money to live elsewhere.

 

[Hannathy]

They are awfully picky and particular for someone who is homeless.
Haven't they ever heard the line beggars can't be choosers.

Why are they in such a mess? Gambling?, booze, drugs? If any of these are why unless they have dealt with it whatever you give them will be gone just like their home.

How old are they? Do they work? and why not if they don't.

They are adults, they chose this mess you didn't. You offered them a home they refused so now the ball is in their court and the next move is up to them. What is their plan?

Do not sacrifice your financial future and your childrens way of live to bail out adults. Tell yourself you are not putting them onto the street, they picked it. you offered a roof over their heads and they refused.

How does your DH really feel about all this?

 

[Hannathy]

I forgot to say I would extend the invitation for them to live with you again. and offer to help them move a reasonable amount of their belongings to your home.

If they refuse to move in with you then you have done all you can do and it is up to them.

I would also have a heart to heart honest discussion with your DH about all of this

 

[ceecee]

Maybe the best thing you could do is go over their budget with them and decide what they can afford. Are they older and unable to care for their own finances? Seems like most parents would not want their kids giving them hand outs. As for the IRS taking all their $, do they own back taxes? They don't take most of your $ even then.

 

[cornflake]

Are there perhaps other options that you guys just haven't thought of?

What about an investment property house that maybe you and your sister go in on together (sortof because she lives there and thus can better decide what to get, what to do with it later, and maybe you can stack this in her favour a bit as payback for what she's done taking care of them already, as it seems you both seem reasonable about the whole thing).

Then maybe if they live in an area with colleges, you can set it up to rent a room or part (like if you get a house with a mother-in-law suite) to a college student or to a couple.

That'd save on the mortgage so you could afford something somewhat nicer, and so there's not so much layout monthly, probably get higher resale value, and there's someone there to provide a bit of peace of mind (presuming your parents are the nice older couple who people would talk to and such).

Or is there a senior community anyplace in their area?

Also, not for nothing, have you told your sister you know how much she's done and all? Sometimes people don't think others notice, even if others do.

 

[SplashMo]

Lots of information here on foreclosure:

http://www.loansafe.org/forum/#foreclosure-advice

Do you have the option of a small outbuilding on your property? Or addiing on a mother in-law apartment in a basement or attic?

 

[SplashMo]

Also if they get a large tax return suggest that they change their W4 to increase their dependiences....

 

[LuLuO]

Since you are debt free, I assume you have been very repsonsible financially - I would hate to see anything ruin that for you. I would not go into debt (even a mortgage) for your parents. You wouldn't be letting them live on the street. You have offered to let them live with you and they refused. That was their choice. If you feel it is your job to provide them a place to live even after they have refused to accept your move in offer, maybe you should lean toward paying their rent for an apartment rather than taking on a mortgage.

This was my thought too.

Don't jeopardize your family's financial future, not even for your parents. Both you and your sister need to be on the same page and stand your ground on what you will and will not do to help your parents.

It sounds like your sister has gone above and beyond for them and that they are taking advantage of her. The ball is in your (you and your sister's) court. Your parents can either go with the options you give them, if you choose to give them any, or they can stand on their own, which they should be doing anyway barring some kind of special circumstances.

 

[LJSquishy]

The only thing I can really say is that if they truly are in that bad of a position, they really don't have the choice to refuse to live with you. I absolutely would not put your own financial future at risk. You have children to think of.

 

[Swan4Me]

Why? Can you start there, figuring out why the IRS is taking most of their money?

So it seems more than odd that they are taking *most* of their earnings.

I agree! WHY is the IRS taking all their money?
How old are they-are they on SS?

 

[hsmamato2]

because that is what happens when you don't pay your taxes properly,the IRS comes for you,and you end up with nothing,or less.
Trust me, I've seen this scenario.....
OP your parents are irresponsible- now this is really between you and your sis- (1)you two need to talk together AT LENGTH,and come up with a workable plan that you can live with. acknowledge what she's been doing,and discuss if she can continue in any way shape or form. Discuss what you can do to help.
really,what your parents will allow you to do.
(2)Consult an eldercare lawyer when you have all the facts on paper,i.e. what they owe,and why,past fiscal history. If you don't have that info, you can DO NOTHING to help them.
Understand that,without their complete cooperation(giving up info and control to you and sis) you can't actually help them -since you don't know what is needed to get them out of this mess.
ANd don't allow your parents to take your own financial peace from you,and be aware,this is going to be STRESSFUL. No guilt,just do y our best,if they refuse logical help,then they will have to figure it out on their own.

 

[branv]

I don't know the situation -- maybe your parents have spent too lavishly and saved very little, or maybe they had devastating medical bills -- but it really doesn't matter why it's happening, only that it is. So whether your parents are martyrs or foolish, at this point, shouldn't affect how you approach the situation. You cannot continue to treat them with kid gloves. The reality is this: they have no money. They have no home. The ability to choose is over.

Your sister and you should present a united front: she needs a break, emotionally and financially (which she WELL deserves), and you are unwilling to, literally, mortgage your own financial future for them. They can go homeless or they can come live with you. Those are their options. It may cause a scene, grousing or fighting. But it is what it is. You are not being disrespectful, you are trying to care about your parents as best as you can while also caring for your own family.

Consider this. If you buy or rent your parents a home, possibly hurting yourself financially as you've stated, aren't you now risking putting your own children eventually in the same spot you and your sister now find yourselves? Should they have to financially care for you someday because your parents were unable or unwilling to care for themselves? That is not fair for them, anymore than it's currently fair to you.

Best of luck to you. My own parents and DH's mom have always been bad with money, but are equally unwilling to talk about it. I suspect someday things will implode and we'll be expected to clean up the mess. It's very frustrating.

 

[Sugar Jones]

I don't know, I can understand your parents not wanting to move across the country at their age, especially if they have lived in that home all their lives. Despite how they got into this financial trouble I would do what I could to help them.

I personally would sell the house (even if it is the childhood home) and offer to pay a portion of rent to help them get back on their feet. Between yourself, your sister and your parents you should be able find them something suitable.