Relative Needs Money - What Would You Do?

[brett]

We have a friend who continues to bail out her son from financial difficulties.
It is never ending.

I have said to DW a few times, he son will not be happy until his mother has exhausted her limited financial resources. Then he will move on and try to tap one of his sisters

At some point people need to learn to stand on their own two feet. Helping someone over a crunch is fine. Doing it in a consistent and constant manner is not helping, it is enabling the behaviour.

 

[ivinsfan]

This really isn't a money problem, is it? So more of your money isn't going to fix it.

Unfortunately, none of us know what it will take to fix it, because we aren't your family members. Be encouraging and supportive without giving money. Point them to some possible programs that can help them. Listen to them as long as it doesn't stress you out. And last but not least, if you feel pressure or disapproval coming from them, give yourself permission to just disengage and not feel guilty.

 

[Fedup]

Maybe you should turn around and ask them money. Heck you need money for a bigger RV. You need somebody to finance your retirement. See how that goes.

 

[dixonge]

I have always imagined scenarios about how I would handle a lottery winning. First thing, get legal help to minimize taxes and maximize anonymity. Second, get all finances in order. Third, provide discrete help to family, mainly parents, mostly just getting liabilities off of their books. At no point would I mention a lottery win to anyone, family *or* friends.

Now, back in reality-land, our actual nest egg is small, but once we retire it might look big to anyone who knows we have pensions that pay all the bills. I think I need to develop a good repertoire of phrases to toss out on a regular basis, sort of a smoke-screen.

"We're just living paycheck to paycheck like always."
"I just hope our money lasts."
"I don't know what we'll do if 'they' reduce Social Security."
"I sure wish we could afford to live back in the states."

Now that I think about it, those are probably good phrases to spread around even down in Mexico amongst our fellow expats. I mean, just in case...

 

[Danmar]

I have always imagined scenarios about how I would handle a lottery winning. First thing, get legal help to minimize taxes and maximize anonymity. Second, get all finances in order. Third, provide discrete help to family, mainly parents, mostly just getting liabilities off of their books. At no point would I mention a lottery win to anyone, family *or* friends.

Now, back in reality-land, our actual nest egg is small, but once we retire it might look big to anyone who knows we have pensions that pay all the bills. I think I need to develop a good repertoire of phrases to toss out on a regular basis, sort of a smoke-screen.

"We're just living paycheck to paycheck like always."
"I just hope our money lasts."
"I don't know what we'll do if 'they' reduce Social Security."
"I sure wish we could afford to live back in the states."

Now that I think about it, those are probably good phrases to spread around even down in Mexico amongst our fellow expats. I mean, just in case...

Sometimes I feel like I have "won the lottery". Certainly we are better off than all our relatives, probably combined. But we are very generous in many ways and have helped some relatives out with cash gifts. Usually in the range of $5,000-$10,000. I dont think anyone has actually asked for help and if they did, I would have absolutely no problem just saying no. Anyone who asks for money is out of my "good books" and that being the case I basically "write them off". I'm a hard hearted SOB in that respect and I think they know it. I certainly wouldn't make up stories about the reasons why. They should be obvious.

 

[kcowan]

Former BIL was a leech on FIL and his aunt.
Current BIL leeched off his Dad.
My brother leeched off Dad his whole life.
Fortunately, they never put the bite on us.

I had a neighbour who tried. Once I paid his telephone bill and told him there would be no further discussion of money until he paid it back! Then I never lent him any more. He found people that would.

I am in the help them work through bankruptcy crowd.

 

[Dash man]

If you do choose to help, don't give them any money directly. For example, offer to pay the bankruptcy lawyer but pay the lawyer directly. Don't sign anything making you financially responsible. Good luck!

 

[Crewer]

We helped DB and DSIL a few years ago. She's a 2x cancer survivor and each bout left them with big med bills (after insurance paid) and her without a job. After the first time they moved to a lower cost of living area (also to help take care of her mother) and got reasonably comparable jobs, again with good benefits. Her 2nd cancer threw them off and they declared bankruptcy. We provided cash to help even with that and they promptly paid it back. She's back to work (different place, of course) and they are doing pretty well, though they spent alot of retirement assets before the bankruptcy. Of course, she doesn't expect to live very far into retirement.

Anyway I was very happy to have helped them and I'd do it again (and we may be doing it again, who knows).

 

[Sojourner]

This really isn't a money problem, is it? So more of your money isn't going to fix it.

Unfortunately, none of us know what it will take to fix it, because we aren't your family members. Be encouraging and supportive without giving money. Point them to some possible programs that can help them. Listen to them as long as it doesn't stress you out. And last but not least, if you feel pressure or disapproval coming from them, give yourself permission to just disengage and not feel guilty.

Yes, this is basically how I see it. In many ways, it's similar to trying to help someone with a substance abuse problem. Just giving them more drugs (or money to buy drugs) so they can make it to the next day isn't really a fix, although it might be the humane thing to do from time to time if circumstances are dire enough. But ultimately, the person needs to hit rock bottom and make an internal decision to conquer their dependency and overcome their pattern of destructive behavior.

So having said that, my advice would be not to give or loan any money unless you feel the situation is dire to the point of being immediately life threatening. Bankruptcy would be analogous to hitting rock bottom, so it actually seems like it would be a good (and probably necessary) catalyst for getting them to change their lives for the better.

 

[Hexanova]

Tough love. Our niece (wife's side) was trying to get into her first house, a very small and cheap house, and asked us to help her. We've helped her in the past with money...she's one of these new millennials who lives in the moment, with no care about the future (the grasshopper). I had no interest in co-signing on a low end house I might be on the hook for in the future and had no interest in owning. We agreed to loan her the money for closing costs, and the day she sells any equity is returned to us as repayment plus interest. We also told her in no uncertain terms that this would be the last money she received from us. "You're 30 years old, start acting like an adult please." That was almost 2 years ago, she still hasn't changed, living hand to mouth, in debt, negative net worth, she's being sued by an ex-SO over property after a breakup (or some nonsense), etc. If she fails, I will let her fail and I think my wife agrees. Some people only learn lessons when they are beat over the head.

 

[easysurfer]

We helped DB and DSIL a few years ago. She's a 2x cancer survivor and each bout left them with big med bills (after insurance paid) and her without a job. After the first time they moved to a lower cost of living area (also to help take care of her mother) and got reasonably comparable jobs, again with good benefits. Her 2nd cancer threw them off and they declared bankruptcy. We provided cash to help even with that and they promptly paid it back. She's back to work (different place, of course) and they are doing pretty well, though they spent alot of retirement assets before the bankruptcy. Of course, she doesn't expect to live very far into retirement.

Anyway I was very happy to have helped them and I'd do it again (and we may be doing it again, who knows).

This is heat warming. Glad to read a success story .

 

[razztazz]

I had a similar situation. Won't go into details here. Something to keep in mind. If they are in as bad shape as they claim they can access outside help. Some government. Some charitable. YOUR input could be minimal. And as far as your assistance goes, mentally ad operationally you can call it a gift but in order to qualify for certain avenues of assistance (especially the Government stuff) you'll have to "call it" a loan in public

I told the person I was dealing with more and more money wouldn't help because the day after I run out of money he'd be out again anyway then there'd be TWO broke people instead of just one

Also---- this relative I had to bail out actually got a great deal of help from GoFundMe. He did not open the account (or whatever you call it) and I didn't because I had not heard of GoFundMe, but some sympathetic sole who had heard of his situation did and he received enough money to cover his rent for almost a year. I chipped in some... he got some gov help and some local charities/church stuff. He eventually got a job. Still struggling but I guess you can call it a"good struggling."

If a large part of their problems are medical I am sure, especially in the current "policy" environment, they will get some help. Perhaps a lot

 

[easysurfer]

I have an irresponsible brother (not the one I mentioned earlier, but another) who is a broken record in all throughout his life he'd say "Well, I'm sort of short on cash." Well, definitely a grasshopper and not an ant.

I loaned him some $ in the past to help him buy a used car. He paid back for a few months then just stopped as I guess he had "better" things to do with his money and loan repayment wasn't a priority.

Fast forward to today, he has since moved several states away, still always short on cash. He has already skipped coming back around the hometown for a wedding of a nephew ("well, short on cash") and I'm willing to be my life savings that he'll skip another wedding of a niece in a few months.

When he does call me and talks about how broke he is, that he really would want to go home to attend the wedding but is short on cash, I just tell him to keep is Facebook account open as I'm sure some folks will post wedding pictures.

 

[braumeister]

If you do choose to help, don't give them any money directly. For example, offer to pay the bankruptcy lawyer but pay the lawyer directly. Don't sign anything making you financially responsible. Good luck!

Good advice.
Every time we have helped out our ne'er-do-well relative, we have used this method. Paid his back property taxes, utilities, etc. directly to the city/county, etc. He was NOT pleased that we didn't just give him the money, but it was for the best.

 

[Carpediem]

He was NOT pleased that we didn't just give him the money, but it was for the best.

This ^ reminds me of the time a homeless person once asked me for money for food (as they did most days) and I told him I would take him to a nearby restaurant and pay for it. Nope, he wasn't interested.

 

[Amethyst]

Thread is reminding me of other "grasshopper" moments. Mr. A. was painting the rental townhouse we used to have, preparatory to re-renting it, and was approached by a neighbor who wanted to rent. It was a married couple with 2 kids and a dog, living with Grandma who wanted them out. They had a compelling sob story; bad prospective tenants always do. Mr. A. wasn't falling for it but sorta didn't want to say "No," so he asked for money up-front. The guy promised to get the money if we would hold the townhouse (bear in mind, it wasn't ready and we hadn't advertised it yet). A week later, his wife left us a dear little note, with the "i's" dotted with little circles, explaining that they couldn't get the money just now because they had lent it to a friend who needed it. But, they really really wanted our townhouse, so just give them a little more time....

I call that the behavior of people who love everybody, want everyone to love them, and somehow expect the rest of us ole meanies to subsidize their lovability.

 

[Floridatennisplayer]

Sore subject. BIL was an executive for a major co. Lived big, latest cars, trips, huge home etc. Kind of a bragger. I guess he felt like he could spend away as he was making $350-400k a year....double my income. Well, the gravy train ended about 7 years ago, major layoffs and downsizing. He was out. And that house payment on a 2mill dollar home was a big one.

He calls my wife, his younger sister, whining about might lose the house, putting it up for sale. When it sells they would net $200k and pay us back all house payments. I said no way, wife cried...worried about the effects on his kids etc. I gave in like an idiot. I paid two months of $4,800 payments each and he still didn't find another job. I said no more. House finally went into foreclosure....I don't think he used my money for payments. Just before final foreclosure it sold and they netted about 80k. I never got a dime back. They ended up buying a condo for cash and retired! Wife knows this stuff will never happen again..they avoid us...ugh.

 

[Walt34]

I've only been approached once by a relative (grasshopper niece) for help for her mother (half-SIL by marriage) and it was easy to say "No" because she had a history of borrowing from other relatives and not paying it back.

 

[marko]

... but we're resentful at the same time, as they've not always made the best choices or exhibited any willingness to sacrifice to get back on track.

1)Read--and re-read--and re-re-read your words above.
2)Write down on a piece for paper that you're "dealing with grown adults, not children" 100 times.
3)Repeat #1 and #2 until you come to your senses.

 

[travelover]

I think the best advice I've heard is no money until after bankruptcy, enough money as a gift, not a loan, to keep food on the table and we'll help direct you to government and charitable resources. I think I'd set an advance maximum for the cash assistance, too.

Yes, I have grasshoppers in my life, too, and they always play, but never pay.

 

[Floridatennisplayer]

I'm now going to use the following statement: I wish we could and we wish you the best but all of our money is now tied up in long term investments with severe penalties.

 

[Silver]

Thank you all! I knew I could count on you to make me realize we are not the only ones who have ever (or will ever) face this situation.

It's going to be tough. We've always known that whatever help we provide will be a gift, not a loan. Unfortunately I don't think bankruptcy is an option as SIL's employment would terminate and she's the only one working at this point.

Why would your SIL lose her job if they used bankruptcy to assist them? I'm not at all familiar with the process of bankruptcy, but I have never heard that being unemployed is part of the deal. If she is currently working in a financial management position, I guess I would understand her employer not accepting bankruptcy by an employee. But it seems to be done so commonly these days I wouldn't think that losing one's job would be a consequence.

The reason I ask is that I would agree to assist with paying for an attorney to do the bankruptcy, but little/nothing else.

 

[daylatedollarshort]

I would provide help finding social services, filing for bankruptcy, and paying for some necessities outright like groceries or buying a trac phone for phone service. There are many programs out there like discounts on utility bills, free phone service, food stamps, Medicaid, library services, etc. that I think many of the people who could qualify simply don't know about. If they don't qualify for any of those then I'd offer help with making a budget and a plan to become financially self sufficient, and still pay for some necessities.

We have given money outright to relatives from time to time in the past and in most of the cases the money ended up being used for discretionary purchases like new carpeting instead of college tuition or groceries, the intended purpose.

 

[pb4uski]

....Unfortunately I don't think bankruptcy is an option as SIL's employment would terminate and she's the only one working at this point. ...

Actually, it is illegal to terminate an employee if they file for bankruptcy so I don't think that is correct.

http://www.alllaw.com/articles/nolo/bankruptcy/can-lose-my-job-file-bankruptcy.html

I thank my lucky stars that all my siblings and DW's siblings are not in your in-law's situation, putting me in your situation.

Perhaps one way to help out would be to help them find, and perhaps pay for a medical bills advocate that can help them settle their bills for the least amount possible. I also like the idea of seeing if they qualify for Medicaid retroactively that would cover some of those medical bills.

Reach out and help them as best you can in solving their problems and avoiding getting into new ones.... perhaps some credit counseling. If you decide to give them something, give them gift cards for things they will use (groceries, gas, etc.) rather than money.

You can look at this as a coaching moment and if you can pull that off they will be much better off in the long run than if you just wrote them a check.

 

[Car-Guy]

I would not feel guilty (sounds like they dug the hole) but I would probably help to some degree but only after they got what they could from the governmental assistance programs. I assume they paid some tax in the past so they should take advantage of the programs that are available to them. In a very real sense, you have already helped them with your tax dollars too. So after that, if they still need some extra help, I'd probably give them some money but with the understanding it's a loan (and not a gift). BTW, if you "give" them more than 14k a year, (28k from both you and your wife) you may need to pay a gift tax.