Quote:
Originally Posted by Wormius
It has been discussed, ad nauseum. They’re stubborn and not interested in leaving because they’ve lived there their entire life and all of their friends are there, etc. I’ve been open about it being totally fine to move in with us and being able to live very comfortably for the rest of their life on the proceeds of a sale, even if they decided just to rent.
Honestly, the house is a dump. The value is 95% land value. If they sold and rented or bought a small condo they’d immediately increase their living conditions.
I feel obligated to help though, since I am in a position to and they did raise me.
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The more I think about it, just be super careful and protect yourself over them. You're in a position to help them help themselves. It's one thing if you were the only beneficiary, but because there are others, it's messy. Therefore drawing the line and not letting assets cross it to avoid issues, might be more important.
$100K LOC at 6% is about $6K a year or around $500 a month in interest. If they're struggling based on that, then handing them another $100K loan just means that they'll potentially keep digging a bigger hole. Then by the end, you're out the $100K plus you have other issues to address. Maybe gift them something and just assume you won't get anything back.
Nothing wrong with wanting to help, but it doesn't mean you have to offer something that has a likelihood of not getting back plus increases the odds of being in a weird situation with the other beneficiaries. If it's reverse mortgage and their estate is near zero when they pass, that's probably OK too. I'm going to circle back and say the loan/lien idea is fine if there weren't other beneficiaries involved, but because there are, maybe look into other options instead of the loan. I've seen too many scenarios where the best thing to do regarding loans between family members is to assume it's a gift instead.
I kinda get it. I am in a culture that is like that too, but the way my family approaches it is to always gift things, not cash and often consider used things too, because my parents/in-laws feel like the item is too nice to use. For instance, they might rarely touch/overly baby a brand new Canada Goose jacket or phone to avoid damaging, but proudly use a hand me down owned by their kids or in law. Or they'd just save the $10-15K towards a car vs buying a decent one, but be relatively happy driving the kids older vehicle (sold for $1 after they upgraded vehicles), assuming it's reliable and not a wreck.
The loan/lien might be determined to be the best option later on, but try to exhaust other avenues and options first.
