In 2016, my 70 yo mom was going through a big transition (divorce, selling her home) and I suggested she move to my state. Before her place sold, we found a great condo for cheap and we all agreed it would be a great "forever" home for her, so my husband, mom and I agreed to co-own it, with the understanding that she would live there for the rest of her life and then the property would pass to me & hubs. My husband made the down payment in good faith, considering this to be an investment in OUR retirement. She was 100% aware of this and present at closing in order to be included on the deed. (She is not on the mortgage, however, because her house had not sold, she had no cash, and had just quit her job to move.)
Her condo is brand new from the studs out, inc, electrical and plumbing. Her pmt is just over $500/mo, inc. fees. The money she netted from the sale of her house went to updated carpet, fixtures, cabinets, new furniture, etc., all with her approval. It's a great place, and it has appreciated significantly (more than double). Problem: she keeps wanting to flip it to make money. A few weeks ago, she talked some guy in her complex into selling his UN-renovated condo for (suspiciously) cheap and insists she can sell her place, use the money to buy that one, and fix it up, as well as "pay off" my husband's investment. She never consulted us or the realtor we use, she just tried to tell us this is what she's doing. My mom is 76, pretty clear-headed and in fair shape but does have some health issues that make this seem far-fetched (psoriatic arthritis, back problems/pain she has been getting shots for, frozen shoulder and pain she has been getting PT for).
So... I said no, we're not selling. She unloaded on me, said I was "sick" and had trapped her. Said she would move anyway (but of course, she can't). She has $10k in an IRA and lives on SSN. She has a history of making bad financial decisions, was a huge gambler for several years, and her ex continually ran up debt until her $300k nest egg from her late husband was gone. She mortgaged the house she had once owned outright at least twice, the second time with a variable rate mortgage, then had to sell because she could no longer afford the pmt. She NEVER asks for help, advice or opinions.
A week ago, mom & i had a screaming, everything-and-the-kitchen-sink fight, in which she said that if I proved to her that she owns her place, she would live there "forever". I did, by showing her that her name is listed as an owner on the county tax website. Now she is so angry, she will not speak to me. Just as a gut check, I ran everything by our realtor and she agreed that it was NOT a good deal -- mom has no cash and wants to gamble everything she has on a place that hasn't been touched since 1970-something and is known to have plumbing and electrical issues. And she's 76 years old.
There's no other family to weigh in -- we have a friendly relationship with her oldest daughter (my sister), whom she gave up for adoption 2 years before I was born, but I wouldn't want to bring her in to this. We've only been reunited for about 10 years. Mom has a brother she doesn't speak to, and has had no contact with nieces or nephews for years.
WHY do I feel so bad? I've looked at this a hundred ways, talked to my husband and the realtor, and I know it's a solid decision. But she is enraged and I don't know how to fix it.
Your mother has a shaky history of making bad decisions, one after the other. This is just another example of her trying to make a bad decision and insisting you go along with it. I'm not sure you can 'fix' a delusion of this caliber; just wait for her to calm down a bit and for her rage to subside. If it doesn't, see about getting her a cognition test with her PCP. Dementia patients are notorious for wanting to jump on the 'bad decision' bandwagon and not liking to hear the word NO. Ever. Under any circumstances. I don't think you need corroboration from the rest of the family to agree that this is a bad idea your mother has. Just keep telling her NO, you will not sign over your rights to selling this property, and that's that. Sorry ma, I love ya but I'm not on board with this BAD financial decision.
Best of luck.
The promise to stay in it forever was never enforceable. The promise that you would inherit in itself is not either (maybe you did a life estate or tenants in common with right of survivorship, but you didn’t say so probably not.)
Take a deep breath. Consider your options. Maybe she’ll settle down again and you can pretend this didn’t happen. Then again, maybe you should get out while she still wants to.
Think about it. The place has appreciated a lot, so it is possible you will get more than your down payment back if it sells. Letting her get more than the money put in for principal and improvements may not be so bad. Just make yourselves a promise never to link your finances with hers ever again.
Once you are clear headed again think about how involved you want to be with her end of life planning. She appears to be strong willed, and has anger and addiction issues. Her poor recall of what she agreed to six years ago is a disturbing red flag of possible memory issues or mental illness.
Seriously, if you wouldn’t buy into this deal today, why would staying in be good?
Is Mom able to lay tile? What about painting walls and ceilings? Going to Home Depot to pick up a new toilet and installing it? Is she good with plumbing?
How about re-wiring electrical outlets? Can she install windows [I know that probably would be the Condo responsibility] but tell Mom anyway. Has she seen the cost of new kitchen appliances lately?
Also, once she sell the flip and does make a profit, the IRS will be sniffing around, as profits come under a different category, the taxes are higher. Unless she moves into the flip for a certain number of years, and becomes her personal residence.
And Mom would need to qualify for a loan to purchase that flip, the interest rates are much higher and she would need to put down a hefty down payment. Investment properties are a risk, thus the reason for higher costs.
Tell Mom know about those things. Too many newbie flippers see those TV shows and think it is so easy. And totally forget what is all involved. I am your Mom's age, and had worked in Real Estate for 40 years, had some rental properties, but at my age, no way would I ever consider it. Flipping is a young person's thing.
Also, was she planning on living in the construction zone? I don’t remember the folks on TV doing that. Or maybe the plan is that she and her new furniture would be moving into your place “temporarily.”
See if you can consult an elder attorney to ensure this arrangement does not become complicated.
Buy out any of her initial investment but no more.
Send her on her way and tell her you are done.
Walk away and don't look back.
One must want the consequences of what one wants.
What I think I would do is nothing right now. That means that this particular bad idea won’t go ahead. When it is off the agenda, I would buy her out while she is still legally capable of the decision. You can make her your tenant, just not on the title. You will probably need to include a component for her money that was put into the fit-out, at least any value of the furniture now (she has had the benefit of any deterioration in its value since fitted). Justify changing your mind on the basis that she can have control of her own money, and that none of you can foresee the future. She is only 70 now, and who knows? She could even re-marry, and that would change things a lot.
The down side of this is that you think she will probably make bad decisions with her own money. The up sides are that 1) her pension income should be enough to pay the rent; 2) if she needs care in the future when she is penniless, she should be eligible for medicaid; and 3) the pay-out will be at no more than present values, not the value in 10+ years’ time.
I can see easily why this was a good idea at the time. However I don’t think it’s a good idea now, and could be much much worse in the future. I hope that this gives you a bit more to think about. Best wishes, Margaret
What are the whys?
Others have advice for the intricies of financial & property matters.
I'm wandering down a different path.
What does Mom REALLY?
Very different & a minor thing, but years back I was gifted bags & bags of secondhand clothes. Beautiful, some designer & many with tags still on. But I declined as my kids had outgrown the sizes. I was strongly advised to be more gracious & accept (which I did).
But while the gift was well intentioned, it was not what I needed. I needed basic kids clothing. (Course these days I could hock the lot on eBay.. & head to my local discount kids clothing shop)
I explained I could not use them (many times) but was not heard. So I asked the gifter what their wishes were after my use - to return or send to good will. I waited a short time then donated.
While that was a trivial matter (not a condo) I wonder if Mom needs something different. Has different housing needs that you realised, even she realised since she moved in.
Maybe something she can make her own by renovating?
She may also really want a project, a 'job' to feel useful - a purpose.
No DX dementia, mental illness, right? But..
Why does she want to move?
Why does she need somewhere else?
To feel *at home*?
What IS home?
Her answers may reveal some interesting answers!
Big things to consider are Mom's financial capability to make such big lifestyle decisions.
Would she be at high risk for fraud by dodgy builders etc? Could she organise the whole lot, hire the help, independently?
Or is there lack of insight & she expects you to do everything?
If you did 'un-do' the whole financial/property situation.. the other big consideration is how much you want to help with whatever Mom does next.
Do you cut her free financially with bitterness & bad feeling?
Or help her plan her steps towards what she needs.
Maybe there is a middle ground. Starting with good financial advice for you all - then separate it out & wish each other well?
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