Pay Dirt is Slate’s money advice column. Have a question? Send it to Athena and Elizabeth here. (It’s anonymous!)
Dear Pay Dirt,
My mother passed away five years ago and left her small estate equally to her four children. Her estate consisted of a house and about $40,000 in cash.
My mother had a long-term partner she never married. In her last few years, he moved in with her and helped care for her. For years, my mother supported her retirement by renting out rooms in her five-bedroom home. It was her hope that he could continue living in her house and rent out rooms. This would pay for maintenance, property taxes, and insurance and give her partner a place to live, as he has never really worked and lives on disability payments.
Unfortunately, this person is a hoarder and since her death has filled the house with piles and piles of stuff. The front yard is also full of stuff now. The house is so full he is only able to rent out one room, and he uses the rent from that room to support himself. The minimal payments we have asked for my mother’s surviving partner to pay (only $400 a month, just enough to slow the drain on the estate) have been paid less than half the time. The $40,000 that was originally in the estate’s account has dwindled to less than $20,000. The house, which my mother always kept clean and organized, desperately needs repairs and paint. Very soon we will no longer be able to cover the insurance and taxes, and there will be nothing left for repairs.
We are very fond of this person, and he has many wonderful qualities. We don’t want him to become homeless. However, it is not sustainable for him to continue living in the house without renting out rooms to cover the expenses. And I do not think that this person is capable of cleaning up to the point where the house can sustain itself with roommates. How can we address this in a way which treats our mother’s long-term partner in a humane way, but also protects our inheritance? He doesn’t have enough income to live on independently but also isn’t doing his part to sustain the arrangement.
—We’re Stuck Here
Dear We’re Stuck,
I say this with respect and love: Just because your mom wanted to take care of somebody doesn’t mean you have to. I’m sure he’s a nice guy, and your mom had her reasons, but that doesn’t mean you have to take him on, especially if he isn’t holding up his end of the bargain and is trashing the place. So you have two options. You can allow him to live there, with stipulations put in place, or you can evict him, but both of these options require you to meet with a real estate attorney, stat.
If you allow him to stay, you need to have a formal landlord-tenant lease agreement put into place. This is to protect you, your siblings, and him, whether it seems like it or not. He must abide by the rules put in place per this agreement or face eviction. This might be enough of an impetus for him to start cleaning the place, but it’s hard to say if it will work—it sounds like this person has a lot of mental health issues, as well as some physical limitations that may make this difficult. If you want to extend kindness even further, you might offer to help him do some of the initial cleaning—make it a project, while also making it evident that this is a transformation that has to occur, and represents the last stop on the way to eviction.
If you choose to evict him now, I wouldn’t blame you. Real estate laws are different in every state, and instead of taking this on by yourself, please consult an attorney. He has rights, due to having lived there for as long as he has, and the lawyer will need to walk you through the formal process to make sure this is taken care of in the right way. Godspeed, friend.
Dear Pay Dirt,
My grandfather died a decade ago and left his modest estate equally to my mother and her three siblings. Though most assets were divvied up immediately following his death, a few acres of property remain in a corporation they jointly own.
My mother and aunts are ready to sell. My uncle … well, we don’t really know what he thinks. His new wife, “Patricia,” won’t let him speak to anyone from earlier in his life. All communications go unanswered.
I advised Mom to hire a lawyer to deal with the sale of the property, but she is hesitant to anger Patricia. I argued that though Patricia will certainly view it as such, hiring a lawyer is not a declaration of war. Lawyers exist to navigate legal matters, like the sale of the property.
I hate to watch Mom lose both her brother and her assets. She needs this money now. Is there another avenue she could pursue?
—He Won’t Talk to Us
Dear He Won’t Talk to Us,
It sounds like your mom and her siblings have already lost their relationship with your uncle. They’ve done everything they could do but, apparently, Patricia is a succubus. It sounds like she already can’t be bothered with your family, and unfortunately has made your uncle feel the same way.
A probate lawyer is a next step in moving forward with the sale of the property. A probate attorney helps beneficiaries settle estate matters through legal action, both inside and outside a courtroom. If your uncle is still unresponsive to the attorney’s request for mediation, the attorney will then most likely suggest a partition action. A partition action is a forced sale of property; it terminates co-ownership.
Your uncle will have the chance to buy your mom and your aunts out, but most likely it will be a forced sale of the property since he seems uncooperative. Since a lawyer is the next step, I’d remind your mom—gently, as it sounds like she’s hurting—to move forward with legal action sooner rather than later. Good luck.
Dear Pay Dirt,
My parents (Mom is about 70, Dad is about 80, neither has any memory problems or degenerative illness) have been making noise about selling the house they’ve lived in for 40 years and moving into a special kind of 55-plus community where there are more support systems than in the average 55-plus community. In most, this just means there are fitness facilities and snow removal, but in a few this means they have meals provided and on-site memory care.
OK, theoretically that sounds good, but the price tag on these places is eye-watering! Almost every place they’ve looked at, no matter what level of support system is provided, has some cockamamie buy-in fee (money they can’t get back ever) in the mid–six figures and then high-four-figure monthly rent!! That seems INSANE to me. For that amount of money, they could live in a luxury apartment and hire a personal chef to make all their meals.
My parents aren’t mega-wealthy either. They’ll make a good amount on selling the house, but not enough for this to be an easy decision. They have long-term care insurance, so I’m not even sure why they want to move somewhere whose selling point is that you can move into their ultra-expensive memory care facility for the same outrageous fee you’re paying to live in your apartment. Won’t long-term care insurance mean they can safely cross that bridge if they ever come to it? On top of it all, my parents are totally clueless about what Medicare would pay for in the unhappy event they need to live in a care facility.
What on earth is the point of moving into these places that take a nonrefundable half a mil from you before you even move in?? They can’t be worth it, can they? Can I point my parents somewhere that feels less like a scam targeting boomers?
—What a Grift!
Dear What a Grift,
It’s not a scam targeting boomers—this time! A continuing care retirement community, also known as a life plan community, offers independent living with resort-style amenities. CCRCs also offer on-site medical care, should your now-healthy parents have medical issues later on down the road, which, of course, isn’t uncommon. The main benefit of a CCRC is to allow them to stay in one place as they age, rather than move from house to house, and then eventually into a home.
Brian Neff, founder of Stop Being Sold, says there is a huge demand for these types of properties, along with huge waiting lists: “Consumers buy into these for many reasons, such as fear of outliving their money during a health care crisis, no longer wanting to maintain a house but still wanting to live in one, and meals.” People who sign up for CCRCs also often say they do this because they never want to be a burden to their children.
While the cost is astronomical, it includes unlimited assisted living, memory care, and skilled nursing care. “Couples will usually pay a base rate for the first person and a reduced rate for the second person. If you have an LTC (long-term care insurance) policy, you may receive a discounted monthly rate, depending on the CCRC and the coverage of your LTC policy,” Neff notes. A portion of this fee also goes into a reserve fund to enable the facility to guarantee that if, by no fault of your own, you run out of money, the CCRC will continue to house you and care for you for the rest of your life.
Get curious: Ask your parents for their reasoning. If they feel this is the best choice for them, support them and help them research their options. They may be doing this to protect you from having to be a caregiver later on down the line. This may be for you as much as it is for them.
Dear Pay Dirt,
I am recently widowed and have $300K in my checking account from selling a house. I want to do some renovations (bathroom/deck, estimating $30K to $50K—am I kidding myself? Maybe!) on my current property. I am 15 months from retirement, still working, and don’t need the money except for the renovations.
Once I retire, I have a pension, 401(k), and other investments. I will also need to consider the money needed for taxes to be paid for 2022 on the capital gains from the house sale.
Given all this, what would be the best way to invest the money from the house sale, with a good yield? Or should I invest the money and take out a low percentage equity loan for the renovations?
—How Should I Pay for My Deck?
Dear Paying for Your Deck,
If I were you and wanted the deck of my dreams, I’d go for it, but go for it using the profit from my house sale. There is no need for you to take on unnecessary debt if you don’t have to, and you don’t. Just pay for those renovations, straight up, and cross them off your list.
With the rest of the money, I would find a brokerage like Fidelity or Vanguard, then invest in index funds. “Index funds are investments made up of stocks that mirror the companies and performance of a market index, such as the S&P 500,” according to NerdWallet. It’s an investment that can be passively managed, so all you have to do is sit back, watch your investments grow, and enjoy your dividends. Have fun in retirement!