Relative Needs Money - What Would You Do?

[DustyMom]

I feel queasy writing about this because it feels like it should be kept private, but I need to vent and that FIRE thing we all have in common is really an important part of this.

So, here's the story. DH's sister and her husband have hit a really big speed bump in the road of life (not the first time, but the biggest bump by far). They have been skirting the edge for as long as I've known them and we've helped in the past by hiring brother-in-law to do work around our house, even when we haven't necessarily needed it (he is in the trades), or paid in advance for work to be done later if they had urgent needs. Now, due to medical issues that hit both within months of each other, they are in dire straits. She had just gone back to work and now he will be incapacitated for 6-9 months, or more (not clear yet). No disability insurance. Not even any health insurance (!), which we just found out. They came right out and asked if we could help.

Our dilemma is that they appear to be in such a deep hole, that there is no possible way we can save them, only kick the problem a few months down the road - throwing good money after bad. In addition, the optics are particularly bad right now. We are literally putting our house on the market in a matter of days, which means a big pay day in the near future. We're also expecting delivery of a brand new motorhome, ordered months ago, with the money sitting in bank just waiting for that call. We appear to be rolling in money, but we've spent years planning this and it was all finally coming together at this moment.

We are prepared to give them some help, but struggling with where to draw the line. It feels so selfish, 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. Before I knew the full extent of their problems I had mentally allocated a larger dollar amount to help out, but now I know that would only be enough to prolong the agony yet still end up in the same place.

[Heavy sigh] Thanks for letting me vent.

 

[Nemo2]

Tough situation. No matter what you do, ('lending' them the money or not), you'll likely be permanently estranged from your relatives, so select the option that is less personally painful.

 

[Rambler]

I hate to say it, but sometime you have to let them go bankrupt so that they can learn a lesson. Maybe it is better to put some food on their table instead of giving them money. Perhaps going with them to the doc and negotiating a settlement with them, instead of just giving them whatever they say the do bill is. I've got a sis like this. After multiple bail-outs, eventually we all had to throw in the towel and say enough is enough. Ironically, she had all the toys, before we had any...big screen TV, travel trailer, brand new truck...in one hand and out the other. No health insurance. No homeowners/fire insurance (inherited house). But all the toys. Then all hell broke loose...the Big C, house burnt down, etc. It was more than all of us siblings and mom & Dad could do. So, we had to let them go bankrupt and start over. She's doing better now, and it seems she's finally learning to manage her money.

 

[braumeister]

I definitely feel for you. BTDT. We have a relative who has also been digging himself deeper and deeper into the hole for many years, and we have helped out many, many times.

Last time he came to us for a loan of $X, offering some collateral we have no interest in.

We agreed, after an agonized debate ($X was a large sum). Then the fun began. It turned out that he actually needed $2X, and had a friend who was going to put up the other half. Then the friend backed out and we needed to put up the whole amount.

Then there were a lot of associated expenses he hadn't mentioned, and what he needed was actually $3X. By the time the actual deadline was approaching, he knew we had lost faith so he had his lawyer call us (several times) and literally beg us to put up the $4X that would really fix the problem (for now), and by the way, could we make it $4.5X so he (the poor lawyer) could get some payment out of this for all the work he had done.

It wasn't easy, but we stiffened our upper lips and said we just could not help this time. Weeping, wailing, gnashing of teeth.

Next month, we found out that he was able to get the loan from someone else who actually appreciated his collateral. He has little chance of ever paying back the loan, so he will lose the collateral, but he'll survive.

 

[Rustic23]

I can sympathize with you. We have a similar situation. They no money, we adequate means. I have long said that the money we spend is our kids money. We are well beyond early retirement, and I know just about how much our kids will get when we are no longer around. So what do we do. Give our relatives money and bail them out of a hole knowing they will dig another one? Or play scrooge. No easy answer.

Sounds like you are facing a bankruptcy situation. If so, I would let it happen. Let them know you will help out where you can to keep them in beans and weenies, but no since giving them money that will be taken by the courts. This may also require more work than you are they are willing to do. i.e. make a plan and stick to it.

Added: DO NOT LEND THEM MONEY!!!! Give it to them or not, but don't lend it to them. The stress of payback will ruin your relationship!

 

[candrew]

DW and I have made it our personal policy not to *loan* money to anyone, including friends and/or family. We've always felt that doing so will create an awkwardness in the relationship that may be difficult to overcome (the proverbial 800lb. elephant that never leaves the room). If we can't afford to give money without strings attached, then we don't and make that clear from the get-go. "Here's what we can afford to do for you" is our response, along with an explanation that there is no need for the person to ever pay us back.

 

[CaliKid]

We had similar a few years ago with one sibling and we told them something like, "while we are sorry for the situation you are in we do not want to risk ruining our relationship with you by loaning you money." They didn't like it but got over it and eventually got back on their feet. We had another situation, with a different close family member, where we loaned them some money and it was a constant thorn in my side. You would think an interest free loan would be appreciated more than it was. In the end our money is our money. I have seen numerous situations where the generous person gets taken advantage of for years. I want to avoid that as long as I can so attempt to stay out of other people's problems. Good luck to you in your tough predicament.

 

[2017ish]

Ouch. Good luck with this. We have not run into this, and are unlikely to...

If it could help, how about recharacterizing the situation that you yourselves are in:

....

In addition, the [-]optics are[/-] timing is particularly bad right now. We are literally putting our house on the market in a matter of days, which [may] mean[-]s[/-] [-]a big pay day[/-] we finally get back some of the money that we've been throwing into that pile of bricks (after paying off the mortgage) in the near future. We're also expecting delivery of a brand new motorhome, ordered months ago, [-]with the money sitting in bank just waiting for that call[/-] which will drain all of our present liquidity. [-]We appear to be rolling in money, but we've spent[/-] Despite spending years planning this and it was all finally coming together at this moment, we really didn't anticipate just how much of a cash crunch it was going to be.

....

 

[easysurfer]

Tough situation. Especially since they came right out and asked. I say if you do give them some help, draw a clear line with them so they know not to depend on you again and again. In the meantime, point them into other resources besides family such as public assistance and suggest they try Gofundme or something similar. This say, you show them that you are still willing to help, get them on their feet and not turn your back on them, yet at the same time they understand (hopefully), that they can't depend on you as their personal [-]piggybank[/-] savior.

p.s. cute avatar

 

[Koolau]

Added: DO NOT LEND THEM MONEY!!!! Give it to them or not, but don't lend it to them. The stress of payback will ruin your relationship!

Only way to go with anyone you wish to maintain a relationship! Otherwise resentment by you and "avoidance" by them will kill what relationship you have.

Probably not possible here, but I suggest what some others have: Offer to help them figure out what to do (e.g., deal with the doctors on fees, negotiate with the creditors, help them get credit card debt "written off", etc.) THEN if they don't have food, be sure they can eat. Other than that, letting the ship sink may be better than bailing too little, too late. YMMV

 

[Souschef]

I had a situation which was no where as dire as yours, but did involve family.
My mom needed round the clock care, and my sis, who was handling her affairs was spending down mom's money/
She had some stocks, which were promised to her grandchildren, who were both well off.
I told my sis I was not going to subsidize my nieces, so sell the stock then I will help out with mom's expenses.
Fortunately that was what she did, and I then helped out with mom's expenses.

 

[Danmar]

Tough one for sure. I would probably give them (not a loan) a token amount say $5,000-$10,000 if you can swing it, and say sorry but that's it. At least it will help a bit and they won't be able to say you were heartless. Most of us have been in this situation and there is no easy or effective way out. Your relationship will certainly suffer.

 

[littleb]

I see this situation occurring so many times with some people in our inner circle. Funny how some people who make poor financial decisions in life always need a helping hand. Then when the big day comes and they are at rock bottom, again, they go to the person who sacrificed and lived below their means to build wealth for their future. That is our situation and may not be the OP's.

I was brought up to never loan money whether it was family or friends. In turn we learned to do without and pick ourselves up when faced with a financial hardship.

OP I don't know your financial situation but if you pull them out they will continue to come back for more. You are richer than they are. That is how they view you and your lifestyle. I realize you are only upset and venting but we learned our lesson many years ago about loaning money.

 

[Bamaman]

I've seen such situations time and time again. Unfortunately some people are just not fiscal responsible, and they never change.

I've attempted to help some of my relatives, however it's just once that help comes. From then on, my assistance is limited to some groceries or a utility bill every once in awhile.

We lived well below our means and we saved until it hurt to fund our pensions and 401K's. We always paid our bills, and are now financially sound. And we're now into capital preservation to last us another 20-30 years--and the bank's now been closed.

 

[DustyMom]

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. If we knew that $X would carry them over until such time as he can go back to work and everything would be fine (or at least, back to skirting the edge as opposed to dangling with one finger), we would probably suck it up and write the check, but everything is too open-ended. What if he is never able to go back to work? Or never able to do what he once did? Or if they can't negotiate something with the hospital over these 6-figure bills? I don't think they plan for "what ifs" - they just deal with today, today, then worry about tomorrow, tomorrow. Drives me crazy because I always have to have Plan A, Plan B, Plan C, for every contingency I can possible imagine.

 

[brett]

We had a similar situation. We decided to help but only after a bankruptcy.

We felt that there was no point in giving money that would simply be used to pay creditors when bankruptcy looked inevitable. If we gave money we wanted it to be used to help them personally.

As luck would have it their fortunes turned and business improved substantially.

There were two huge upsides. We kept our money in our pocket. It will be theirs eventually. They learned to manage their personal finances and business finances in a better way. The experience has made them better people, better business managers.

 

[Nemo2]

Not too long ago DW spoke to the wife of one of her ex's brothers, (one of the (numerous) reasons DW and her ex split up was his, some might say 'childish', attitude towards money....(i.e. doesn't understand where it comes from and doesn't understand where it goes); the brother & wife had 'loaned' DW's ex and his lady an unspecified amount of money for some 'emergency' or other, only to discover later that some portion of this 'loan' was spent on a couple giant TVs.

Brother & wife were not happy.

 

[Exit 2024]

About those medical bills, will they qualify for Medicaid or Medicaid expansion if it is available in your state? I understand that it could be a stretch but had to ask, especially with Husband out of work? rules for those are that you can sign up any time and I believe there is an option to get retroactive coverage like for 3 months back. I think it is also easier to enroll if there are children in the family. Again, not 100% sure, but you should check it out as that potentially could be bigger help than you can provide.

 

[easysurfer]

I see this situation occurring so many times with some people in our inner circle. Funny how some people who make poor financial decisions in life always need a helping hand. Then when the big day comes and they are at rock bottom, again, they go to the person who sacrificed and lived below their means to build wealth for their future. That is our situation and may not be the OP's.

I was brought up to never loan money whether it was family or friends. In turn we learned to do without and pick ourselves up when faced with a financial hardship.

OP I don't know your financial situation but if you pull them out they will continue to come back for more. You are richer than they are. That is how they view you and your lifestyle. I realize you are only upset and venting but we learned our lesson many years ago about loaning money.

So very true about the situation occurring so many times with people in the inner circle. Funny how if you end up helping, you end up feeling penalized for being the responsible one.

A few years after I FIRE'd, I had a financially irresponsible brother who tried to hit me up for some $ to help pay some debts. I told, him no saying "Now that I'm retired, things are tight and I gotta watch my money real closely". Guess that was tactful enough as he hasn't asked again since and I wasn't lying .

 

[TrophyWife]

I think the best thing you can do is help them seek out social services. They dont have the mental energy for that and there are a lot of programs for people in need. My MIL thinks we are rolling in money because I bought a mercedes(honestly was cheaper than the toyota). She doesn't see all the sacrifices we made over the years either. We went without a lot to get to where we are. She on the other hand, spent freely, money she didn't have, retired early and took out a reverse mortgage to fund it.

I am spending my time looking for affordable housing and programs for her. I want her to have a nice life. She is a nice woman.

I choose not to care more for someone that is not willing to care about their own situation. She is choosing an unhealthy lifestyle instead of caring for her medical needs. So I can give my time up to where I don't get resentful.

 

[littleb]

One thing we say now when this situation occurs is all our money is invested (not true) but at least this explanation gets us through the uncomfortable situation without them resenting us.

 

[45th Birthday]

Youngest sister needed money to pay a divorce lawyer so I gave her a five-figure loan. 13 years ago. Divorce didn't take, still married to that jerk. After small payments for three years, nothing. During this time, saw social media posts of vacations, NFL season tickets, etc. Finally started paying again recently. Interest free. No more loans.

Oldest sister left voice mail one time asking for $2,000 for DUI. I avoided calling her back for a few days and when I did she said it was taken care of. I was calling her to tell her she wasn't getting the money.

A few years ago, she left another voice mail telling me they were going to lose their house. I told her I would not be able to help her out. Later digging found that she had bought two $600 dogs while not making her mortgage payments. Multiple credit card write-offs. Other problems. Then saw them selling a $10,000 project car that didn't even run on social media. Huh? If you are in dire straits, that is the first thing that should go. They are still in their house.

Sour taste in my mouth makes it difficult to travel to the city where they both live to see them. Haven't been in several year.

 

[Amethyst]

Another vote for giving, not lending, if you decide to give them $$. Long ago, I gave up trying to get "grasshopper" people that I care about, to pay back or return anything, including books. They lose things, lend it to other people, forget where they put it, the dog chewed it up and "oh what can you do"...they are grasshoppers, not ants, and that's all there is to it.

It's ironic that grasshopper people often seem to have more friends and more fun than us ants. Maybe that is why we care for them.

Amethyst

 

[littleb]

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. If we knew that $X would carry them over until such time as he can go back to work and everything would be fine (or at least, back to skirting the edge as opposed to dangling with one finger), we would probably suck it up and write the check, but everything is too open-ended. What if he is never able to go back to work? Or never able to do what he once did? Or if they can't negotiate something with the hospital over these 6-figure bills? I don't think they plan for "what ifs" - they just deal with today, today, then worry about tomorrow, tomorrow. Drives me crazy because I always have to have Plan A, Plan B, Plan C, for every contingency I can possible imagine.

You can't change the way they live their lives. It makes me crazy to see so many people who get a huge bonus and spend every penny. These are the same ones who are one paycheck away from losing their house or lifestyle. Living hand to mouth. Growing up I saw many of my relatives living only on social security and we all know how that works out.

We always sacrificed today to fund for our retirement and future. I gave up years ago trying to understand others who spend to look good in life and never save much money.

 

[whatnot]

Been there done that. We have helped numerous family members because they think we are rich. No - we are just fiscally responsible! DH & I have both worked since we were 16. We by new cars but keep them for 10 years or so. We have owned 2 homes in 37 years of marriage.
Loaned our nephew $4,000 one year ago and I do resent it. He has always had his toys, jet ski, boat, very expensive truck (4x4), nice house, etc. He lost his job in the oil field and lost everything. He bought a used older truck. Now 1 year later he has upgraded to another slightly used but still nice big gas guzzling truck. He still owes us $ 3k. Many years ago he asked us to cosign for a really nice boat. I put my foot down and said NO. We don't have one and I didn't feel that was a necessity, but I do resent being the bad guy.
We've loaned sister n law money, co-signed a loan for, etc. We have had to pay her RE taxes one year. She has recently married for the 3rd time. So hopefully we are off the hook now!
So yeah - you are not alone.