Dilemma: I’m writing on behalf of my brother and me, since we are in this mess together. He and his family live up north, and my family and I live in Florida, as does our older sister. Mother just passed and left very little, except her home, which we thought was all paid for, plus a small annuity that pays $150 a month that goes to our sister, who has never been able to make much money. She never married, has no children and has been living with our mother for the last several years, playing the roll of caretaker. She’s 58 and is a lost soul, especially without Mother.
My mother requested that we allow our sister to live in her home forever, and then, when she’s gone, the proceeds will go to our collective children. Of course, we agreed. We come to find out, though, that our mother took out a reverse mortgage many years ago and was using those proceeds to help support herself and our sister. Of course it used up the equity in the house and is due to be paid back upon her death. What was she thinking?
So now, we have a fully mortgaged home to sell, and not enough proceeds to replace the housing for our sister, no less the support she was getting.
Neither of us are in a financially great position … we get by OK, but are not rolling in money. With kids to educate and our own mortgages to pay, what is our moral responsibility? Our lawyer says there is no legal responsibility, but still we feel awful for her, and for us.
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Meg’s answer: My condolences on your mother’s passing. How difficult to find this “surprise” at the end of her rainbow. It’s hard enough losing a mother.
To answer your first question … what was she thinking? She likely was in survival mode and didn’t understand how her home equity would be eaten up. Many families are surprised by that after their parents pass on. It’s very unfortunate.
And here you both are. Of course you need to help find a solution to your sister’s dilemma; your mother would expect that from you, and your sister needs help. Easy to say. But what to do? Hopefully, you’ll have some breathing room to get this straightened out before the mortgage company swoops in.
There are no magic wands, I’m afraid, but here are some thoughts.
First, if your sister has a disability keeping her from becoming self supporting, then social services need to be contacted to see what, if anything, is available to her. I assume she’ll go on Medicaid for her healthcare, if she isn’t already. If there’s an issue with her abilities, try to get her into the system. Perhaps a group home could be found to accommodate her. Even her church, mosque or temple may be able to provide ideas and assistance.
Turn over every stone.
If, however, she’s fine, but hasn’t yet “found her calling,” I would encourage you to help her find her way. Does she have friends? Anyone around for support? Perhaps someone to room with? That would be important to secure.
Can she be an outside caretaker? There are many people, especially in South Florida, who need aids to help, whether with dressing, driving or taking their meds on time. If she contacted any number of agencies, they would help her get through the necessary exams and get her started. It’s not a very lucrative job, but it fulfills some needs of hers, as to income and companionship.
Can she wait tables? Work in retail? She could make nice money, and that job could keep her afloat in a small efficiency or one bedroom, also keeping her with people for her social needs.
What she doesn’t have is the luxury of doing nothing to help herself. I would advise against setting her up short term at your expense, hoping she’ll find a way to pay her bills. Her history doesn’t bode well for that scenario, and you’d be “stuck,” I’m afraid, unable to stop the support.
So with the utmost of sympathy, I urge you to ferret out what her problem really is, and help her to get to the solution. Just don’t be the solution. You see how that worked for Mom.
— GOT A DILEMMA? EMAIL ASKMEG@MEGGREEN.COM. MEG GREEN, CFP, IS A WEALTH MANAGER WITH OFFICES IN AVENTURA. HER MONEY DILEMMAS COLUMN RUNS MONTHLY IN THE MIAMI HERALD.