WDYT of this life insurance issue? (and update on IL drama)

[janegold]

You might remember that I posted a couple months ago about suddenly finding out that my ILs have become incapable of managing their finances and are not in a good place financially.  I got some really good advice and support, so thank you all again.

Since then, we now have POA for both of them, I spent days upon days sorting credit reports, bank statements, and piles of documents to get an accurate picture of their financial status, and worked to strategize on how we could make things work for them.  On top of 80+ hour weeks at work last month, so that's been fun.

Basically, right now, they are in the red by over $2k/month.  They have this flex equity line of credit to their house that just keeps drawing down equity whenever they overdraw their checking account so I don't think they ever even realized how much they spend vs how much income they have.  Of course, this fucking line of credit is at over 18%, and they owe monthly payments on it, so it's like all the downsides of a reverse mortgage but none of the benefits.

I've been working to try to figure out where they can cut expenses and how they can increase income.  One of the things I noticed is that my FIL, who just turned 74, has $450 per month taken out of his pension check for a TERM life insurance policy worth $200k.  It seems like it's just something he signed up for years ago, and keeps reelecting year after year, not paying attention to the fact that the premiums have increased astronomically as he ages.  Starting next year or the year after, the premiums are set to increase to something like $750 per month.  These are people who currently have a fixed income of about $4000/month, so it's not a small amount for them - basically, it's the equivalent of about 10% of their net income.  

It's not my choice to make, obviously, but this is crazy, right? I don't think they have any clue about life insurance whatsoever.  Like, my MIL was sure they could cash out the policy and have $200k available to them to pay off their debts.  On the one hand, I want them to cancel the plan immediately and free up that $450/month. On the other hand, they've been paying it for years (I know, Econ 101, sunk costs, etc.) and FIL is not in good health - and if he were to die soon, that $200k would be really helpful to MIL.  I brought it up to them just as a something to think about, but haven't pushed them one way or another.  But just curious how this board feels about it, and wondering whether I should push harder.

PDQ.

[janegold]

And if anyone is curious about the other "solutions" we have come up with and how they're going...

It turns out they spend $1000 per month on booze. $30-40 per day. Obviously an issue for a variety of reasons, including the fact that this expense represents 25% of their net income and 50% of the amount they are in the red every month. I had a financial intervention talk with them 2 weeks ago where we went through every line item of their expenses and pointed out that this was their largest and most controllable expense. And they have literally not changed one thing about it. Like, they still went to the liquor store that same day and every day since. I'm so angry.

I have offered to pull the baby out of daycare and pay my MIL $2k/month to watch her for 5 hours every afternoon (only 3 of which she will be awake for). MIL is not sure she wants the job.

We have offered to take over the title and all expenses of the beach cottage that they barely use, haven't maintained, and don't rent. MIL thinks she would like to rent it out this summer for "extra income." Hasn't made any effort to do so. Hasn't run the math to figure out that she needs to rent it out pretty much every week this summer to break even on annual expenses. I think she thinks that we will coordinate fixing it up and renting it for them, but fuck that. That's where I am drawing the line.

I am trying to sell about 10 acres they own in a rural area, hopefully to a developer. This is actually the key for them to getting back on the right financial path and is pretty much the only feasible long-term solution we have come up with short of them moving out of their current house - which we haven't discussed yet. Of course, turns out the land is a protected habitat for endangered species, so have to get special state review and approval before selling it.


ARGGGGHHH, nothing about this has been easy.  And between being slammed at work and trying to sort all of this mess out for them, I have ZERO extra time.  I'm sleeping like 5 hours a night, I haven't been able to exercise in weeks, I feel like I barely have time to take care of my own family and have hardly had time to talk on the phone with my own parents since all of this started; I think I've talked to my mom like 3 times in the last 2 months.  MIL just hands me a pile of her bills every week and I have to figure out where the money is going to come from to pay them.  H isn't being super helpful either - I have given him a few tasks related to his parents' finances - like looking into consolidating their credit cards on a 0% interest card - and he hasn't done most of them.  I seriously want to just say "I quit" and let these people figure it out themselves, but they are completely incapable and it's just going to hurt all of us in the long run.

[wildrice]

I think that's crazy. 200k isn't really even that much money, and certainly not worth sinking almost 6k per year into to get. Do you know what their financial picture would look like with pensions and insurance and such if he passed away? I guess the only thing would be if you cancelled it and then he died, what would your MIL have in terms of income to live off of?

If they are spending 1k a month on alcohol, it sounds to me like they have drinking problems. I'm not sure that simply telling them it is expensive will solve that issue. I agree it's an issue but may not be worth your effort to try to change. To me it sounds not unlikely that they'd need some kind of rehab or AA or other intervention to stop. That's a LOT of money to spend on a daily basis on alcohol, unless it's due to going out to a fancy cocktail bar and each getting 2 drinks or something similar. If they are drinking at home... that's probably dependency IMO.

[laterz]

Oh boy; you have a heart of gold and a lot of patience.

This is going to be a tough road to navigate. Where is your H at in terms of taking a stronger position with them about needing to change their habits?

Maybe its better to not have them watch your child based on the amount of alcohol they consume.

I'd free up that $450, but make sure they couldn't get their hands on it.

[lemoncupcake]

That’s is...a lot. I’m sorry that you’re being put in this position, both by your ILs and your H, because it’s not fair.

And not to post stuff you are going to delete later, but if they’re spending that much money on that 1 specific thing, I would have serious safety concerns with them caring for your child. Although I’m not sure who is using that daily.

[janegold]

Oh wildrice, it definitely is a dependency problem. I'm trying to triage the finances now but we are going to have to figure out how to deal with this bigger issue sometime soon. In my other post, which I think is deleted, I mentioned that we only just found out that my FIL is clearly an alcoholic when this all came to a head in February and I started looking into their accounts. His cognition has been declining rapidly and we have been consulting all sorts of specialists to figure out what's going on, but neither he nor my MIL ever told any of the specialists about the drinking, and they hid it from all of us too. But FIL says that he's not the only one drinking every night, so I think they both have an issue. I don't even know where to start with finding a solution there.

And you're right that I do need to figure out what happens to his pension when he dies. MIL's only independent income is $500 in SS per month, so I'm pretty sure that if he dies first, she'd need to move in with us - maybe even regardless of the life insurance. She's a year older and not in stellar health herself, though, so it's really hard to say what the more likely outcome is.

[janegold]

Apr 16, 2021 9:28:44 GMT -5 laterz said:

Maybe its better to not have them watch your child 

laterz and lemoncupcake, I know...I've been thinking the same, but they don't drink during the day and we are both working from home (and my H is actually mostly off work from May-Sept) so I'm not too worried. It's just for the summer until my H goes back to work, so it's honestly mostly just a handout since we don't technically need care in the summer anyway.  MIL thinks it's going to be too much work for her, so may be a moot point anyway.

Although the more I write, the angrier I am getting, and the less I want to have her do it anyway.

[lilypad1126]

I'm so sorry you are dealing with this. And I know it's much easier said than done to just make your H take on a bigger portion of this. Especially since it's still going to be a problem that you'll have to deal with down the road. I remember when my H was dealing with his dad's finances and what a nightmare that was, and it wasn't near to this scale, so you have my sympathies.

I would advocate for them to stop paying for the life insurance. That seems really pricey for a small amount of coverage. Especially if that $200k isn't enough to solve the current money problems AND set your MIL up to continue to live independently. If it's likely she'd have to move in with you anyway when he dies, unless you will need that money, I'd stop paying that and redirect that money to some other bill(s).

[lemoncupcake]

Apr 16, 2021 9:40:52 GMT -5 janegold said:

Apr 16, 2021 9:28:44 GMT -5 laterz said:

Maybe its better to not have them watch your child 

laterz and lemoncupcake, I know...I've been thinking the same, but they don't drink during the day and we are both working from home (and my H is actually mostly off work from May-Sept) so I'm not too worried. It's just for the summer until my H goes back to work, so it's honestly mostly just a handout since we don't technically need care in the summer anyway.  MIL thinks it's going to be too much work for her, so may be a moot point anyway.

Although the more I write, the angrier I am getting, and the less I want to have her do it anyway.

Even if it’s just at night...that’s a lot of alcohol, and the effects are wider than when they’re actually drinking. Not an expert or anything, but the general cognitive decline and decision making issues make me wonder if that’s all part of the same issue.

[simpsongal]

Ditto OPs - that's a lot.

I'd stop paying the term life insurance. But I'd want their buy in on the decision. I know it's been said but your DH really needs to handle this.

I'd have a presentation for them on what needs to happen - selling property, paying down debt, cutting off the reverse mortgage. If they don't want to change their ways their just using you - and at a certain point you're likely enabling them if you manage their finances.

[aprilsails]

I just did the math and my ILs definitely consume in excess of $750 for alcohol per month, and they don’t buy expensive stuff. I don’t leave the kids there pretty much ever. I will let MIL come to my house in the morning to see the kids (in non-Covid times). I view their health and lives as a house of cards that is likely to crumble at any point so I feel for you. I do know they are still financially stable, but if something else went wrong they might not be.

I would drop the life insurance payments and use the lis existing home as her financial backstop instead of she’s going to have to move out anyway.

As far as the alcoholism goes, I have no advice. Just tons of sympathy. I hope the property can sell and make this all easier for you.

[ohgillian]

Women get dumped on and dumped on and dumped on and we keep picking up the pieces for everyone. That was my take away from your last post, from this post, and frankly from some similar situations in my own life, from having picked up the pieces for my mom b/c she couldn't do it, my siblings wouldn't, and hiring someone didn't work (the CPA couldn't work without the documents he needed etc).

Whether I would cancel the life insurance would depend in large part on whether your MIL will be pissed at you when your FIL dies, and whether your H will stick up for you.

[njohnson1972]

As for the Life Insurance, I would present the scenario if FIL died, what would that mean for MIL? She would likely receive his SS amount and no longer receive her amount (based on her work or his spousal amount). But as mentioned earlier, if they have any pensions, review what happens if one of them passes away.

[ssmjlm]

First, a big virtual hug because that is A LOT.

Second, I would definitely cancel the life insurance. When FIL dies, I would have a small/cheap funeral and cover the costs until you sell their primary home and pay yourself back.

Third, I would be having a big CTJ talk with your DH. He needs to help, esp if he's about to have a ton of free time. He needs to sit down with his parents and let them know that this is the breaking point. They are broke alcoholics who need to figure out how to stay afloat with the time they have left.

I would not let them babysit the kids, even if it's just to sort of pad their pockets. I know they're the grandparents, but it's kind of like rewarding bad behaviors. Also, I would push to take over the vacation house and have your DH get that rentable. This way you could always use any extra rent income to help them out or keep a reserve for when you'll probably have to bail them out in some manner again.

Hugs again. Honestly, I don't see you guys being able to change their behaviors, I would just hope you could get to place where it's manageable and at least lower stress for your family.

[Poppy]

Do you know how much time is left in the term life insurance policy? Depending on his age, it may not be a bad deal. But maybe the term is expiring soon anyway.

I'm so sorry. I really feel for you. I tried to help my MIL get her finances in order after SFIL died and it was super frustrating. People rarely fundamentally change their habits so I would move forward with the assumption that you will not be able to solve the underlying issues and just do as much damage control as you can (like maybe fix the 18% interest thing if possible). And then try to make peace with that.

But boy would I be ticked at all three of them. #unhelpful

[dr.girlfriend]

I'm sending you a big hug too.

It would be hard enough to take all this one even if they were appreciative and falling over themselves to change their behavior, but given that they are not, and that they are both resistant to change and entitled regarding your assistance...that's not just a bitter pill to swallow, but enough to choke on.

I'll be honest, what would happen if you just bowed out of this situation? Said "This is not good for my mental health. Husband, you and your parents figure this out." What is the worst case scenario -- them filing for bankruptcy and ending up destitute on your doorstep?

I had a situation kind of like this with my husband's mother and sister when we were dating. They just lived in a constantly precarious financial position. They didn't work, and spent all their time in these fringe church activities. They had all these crazy get-rich-quick schemes -- they were going to flip houses even though they had no DIY skills, they were going to become day traders, etc. They always seemed one step away from ruin, and it stressed me out SO MUCH.

At first I got sucked in -- running errands for them, helping them out financially even though I was in grad school, trying to talk sense into them. Finally I realized they were sucking the life out of me and I told my (now) husband that I just couldn't do it anymore. I realized that they had gotten along for all the years of their life before they met me, and they would get along now. I'd help out if they were really in crisis and privately I was putting money away to help out in that situation, but I stepped back from their daily lives, my husband and I moved away from them so we weren't as plugged into their drama, etc. We helped them move a few times and once I wired them money via Western Union to fix their car, but overall it was such a relief to let them sink or swim.

I realize this may impact you guys long term, and also this is a change in your in-laws circumstance and not necessarily the way they've typically been living, but on the other hand what would have happened if you never found out, or if you found out and just said, "Good luck with that, hope you guys work it out"? Would they have muddled along indefinitely?

I guess what I'm saying is that it's really hard to fix other people, especially when they don't want to be fixed. And you sound like you're in serious danger of breaking your own family or yourself, who should be your first priority. It's not selfish to say that this situation is not all on you to fix, and other people need to pitch in while you step back, and if some eggs break in the process, that's not on you. Easier to say than to "feel," I know, but I also look back and realize that if I had stayed sucked into my in-laws' drama, DH and I would have broken up about it, and they would still be disasters, but I would have missed out on the amazing life and family I've created with him. It scares the hell out of me the power they had over us and I didn't even realize it at the time.

[janegold]

Thank you guys. I needed to hear all of this. I don’t know exactly what I’m going to do yet, but I do know that I’m not going to let my own feelings and needs continue to fall dead last in this mess.

[fryjack2]

I’m so sorry. This sounds incredibly infuriating.

I know it’s easy for me to say to just stop doing anything to help them figure out this mess this as an outsider. But in the long run, it will be a bigger problem for you guys if you don’t help.

The you here though, should be your H. For the majority of the work.

You are killing yourself for the sake of people who don’t seem to want to be helped.

I would almost suggest buying a small condo now, renting it out for a few years until your ILs need/are forced to move. It may be easier to own a place that can house them at least that is also financially beneficial to you (assuming the market doesn’t tank). Then when shit hits the fan, you guys are somewhat prepared if you don’t want them living with you.


We have friends in a similar situation. One of their parents had literally blown through the 20 million+ In the last 5 years by investing in poor ventures. Then he died suddenly. All the homes were then bank owned and his spouse had nowhere to go and no money. They bought my here a condo near them and set strict spending guidelines and allowance. Huge life change for her, but it was necessary.

I’m sorry, janegold.

[ellipses84]

My only worry is that your solutions will get them out of debt in the short term, but they will just keep living like they are and end up back in debt. The life insurance may be very helpful in a couple years. Normally I’d say cancel it, but at this point, if you truly don’t think you will pay on it much longer it may be worth it. See if there’s any other cheaper options or if if it has any cash value now. It’s horribly morbid, but if you think there’s no way they’ll need to pay 10 more years, they’d more than double what they put into it and that’s a good return (ignoring past costs, $90k over 10 years for $200k). Another option is to cancel and put $450/mo. directly to savings. Your MIL will get remaining spouse social security think about money to support her upon his death.

You’ve made enormous strides, and it’s great they gave you POA. Keep pushing them but give them options and a timeline. Like you can A. Get a job, B. Provide daycare, C. Turn over the beach house to us, D. Do the work yourself and rent out the beach house, E. Spend less on bad habits. Let me know what option you choose in 2 weeks. I’m not sure how expensive their taste is but there is clearly a problem with consumption if they are going into debt for it and you should determine if it’s both of them and if at least one of them is willing to do something about it.

For credit cards, there are reputable programs that negotiate down and consolidate debt to a low monthly payment over like 3 years. The rule is you cannot use credit cards any more though. I personally think they need to do this, but they won’t like it.

[ellipses84]

I also agree with other posters that your DH needs to deal with more of it. I’m usually the one in my relationship who handles these sorts of things but I also work a ton and when DH’s dad passed away DH had to be the one to handle it. He didn’t handle it how I would but it got done eventually. Now that you’ve done triage and assessed the situation it’s ok to write a list of things to do and handle like 1 per week or less.

[krystee]

I’m actually torn on the life insurance. Yes, he shouldn’t have been doing it, but if he’s in poor health, a couple years of paying $5K for it is well worth $200K. If you think he has 20 years to live, though, I would cancel.

I think you should say, “I love you very much and want to help you. But I don’t have time to come up with ideas no one wants to pursue. Please tell me what you are willing and not willing to do, and I will come up with suggestions based on that input. If you don’t want to make any changes, I respect that and won’t get involved in your finances.”

Hold firm. If they don’t do any of the things you suggest, 100% do not take their bills or paperwork. “No, thank you, I went through the numbers and shared my thoughts. Once you’ve implemented those ideas and the numbers are different, I am happy to take another look, but since these are the same, I don’t need to see them again.”

[tacokick]

Apr 16, 2021 17:37:05 GMT -5 krystee said:

I’m actually torn on the life insurance. Yes, he shouldn’t have been doing it, but if he’s in poor health, a couple years of paying $5K for it is well worth $200K. If you think he has 20 years to live, though, I would cancel.

I think you should say, “I love you very much and want to help you. But I don’t have time to come up with ideas no one wants to pursue. Please tell me what you are willing and not willing to do, and I will come up with suggestions based on that input. If you don’t want to make any changes, I respect that and won’t get involved in your finances.”

Hold firm. If they don’t do any of the things you suggest, 100% do not take their bills or paperwork. “No, thank you, I went through the numbers and shared my thoughts. Once you’ve implemented those ideas and the numbers are different, I am happy to take another look, but since these are the same, I don’t need to see them again.”

This is sort of where I am at too. You can’t really make them do anything. Your husband needs to step up if he wants your family to have so much involvement with his parents’ day to day lives.

I get that you will have to deal with this eventually but TBH, if they aren’t willing to change or work with you, I’d rather deal with it after they are gone and won’t have input than sacrifice your life and sanity now.

I think selling the property to a developer sounds like a good idea. Maybe you could focus on that now and let some of the other stuff go? Even if it ends up being tricky to sell due the environmental issues, at least you’d know that now.

I think paying her to babysit is ultimately not going to work even if she eventually agrees to do it. If she wanted to do it, she’d jump at the chance. There is also a possibility they are drinking during the day and you don’t realize it. That’s a lot of money! I’m assuming it’s not them splitting a $40 bottle of wine each night though. You don’t want to pull your child from daycare and then have her back out. I get it’s basically just a way to give them money but would you then keep paying them if she wasn’t babysitting?

[janegold]

tacokick, the babysitting job would just be through the summer. We have been planning to hire a FT nanny in September and my hope was by that time, the land would be sold and that would knock out all their debt payments (which are currently taking up more than 50% of their income). So it was just suggested as a temporary fix to help get them by until then. But obviously there are no guarantees about the land, and you’re right that it doesn’t solve any problems permanently. Also, I am a bit nervous of giving up our daycare spot before we have a permanent solution lined up.

[janegold]

Apr 16, 2021 17:27:27 GMT -5 ellipses84 said:

For credit cards, there are reputable programs that negotiate down and consolidate debt to a low monthly payment over like 3 years. The rule is you cannot use credit cards any more though. I personally think they need to do this, but they won’t like it.

Any you would suggest? They actually don’t use the credit cards much, and haven’t used them at all since I told them to stop, and something like this might be great — for my HUSBAND to look into for them.

I still can’t figure out how they racked up all this debt because they actually live very frugally other than their liquor habit. My guess is that it’s just been a lifetime of spending a little more than they had, putting any big expenses on credit or a HELOC, and never prioritizing paying it off.

[sadlebred]

It sounds like they are alcoholics who are happy with things as they are. I wouldn't leave your kid with them for safety reasons, I wouldn't give them money--they'd find something else to spend it on. I'd walk away. You can't help those that want to be helped.

[ellipses84]

[mention]janegold [/mention] I’ve never used one but I had an ex-bf a long time ago who paid off cc debt that way. I think National.debt.relief is one. For those types, you want to use a non-profit. They improve credit scores in the long run, although the payoff note may be different in the credit report and it’s not like they need to worry about future credit.

There’s also a bunch of companies that offer debt consolidation loans like so.fi but I think the higher the amount, the higher the interest rate and there are loan fees. Still probably less than 18%!

[lacey]

janegold you are a really good person.

I can’t remember how you originally got tasked with figuring out their finances, but what is the end game? Especially if they are not interested in making changes? It’s good that you have the information you have so you and your husband can figure out now what boundaries you want and how much help you are willing to provide moving forward. But don’t become responsible for the details (weekly receipts!) here unless you really want to. I’m pretty mad at your husband here TBH.

[Roc A Bee]

So what happens if you do nothing? They live like this until they die? I’d be inclined to stop helping or offering advice as they don’t seem to want it.

[mbcdefg]

You’re a very good person to try to help them. My heart goes out to you that they’re not taking you up on any of this advice, and that your H is not being helpful either. It seems like they all figure you’ll just handle it all if the three of them ignore the problem long enough, so please do not fall into that trap. And, frankly, if your H isn’t doing any of this stuff for his parents now, then I’d be wary of how he might handle your own situation when the two of you are his parents’ age.

I would not ask MIL to babysit. I think that’ll create a whole new set of problems for you, for various reasons.

I like krystee’s wording on what to say to them.

[momof2]

I mean this with kindness — but you sound like you have major enabling issues. I think you really need to step back.

It is nuts that you think you can rely on an alcoholic for childcare. My parents also “only drink at night” with a very unhealthy relationship with alcohol. There is no way that they could be in charge of my kids at 2pm. They don’t make good decisions — they might not be slurring until 7pm but they have poor judgment all day long. And they would be unreliable, which would screw me over.

And these are your in laws — drop the rope and tell your husband to either pick it up or don’t complain to you. There is a reason he is doing nothing here — either because you enable him like this all the time, he realizes they will never change and doesn’t want to fight a losing battle or he is seriously enmeshed in a long history with alcoholic parents. The second choice is the only good one, but I doubt that is the case. If it was, he would be telling you to drop all this.