My partner has heard me talk about this thread, and she suggested I contribute her current family drama.
She has a much-older half-sister who has never been financially stable due to addiction and mental health issues. She and her long-term boyfriend are both on the mortgage for her house, but the boyfriend finally walked away from the crazy and left her with a mortgage payment far in excess of what she can afford. There is a family crisis unfolding!
She asked her siblings and parents for money, but everyone involved seems to recognize that a bailout is only a temporary solution. Any money she receives will only forestall the inevitable foreclosure, because what she really needs to do is either sell the house and move somewhere cheaper, or find a new roommate or three. The problem is that she's a little too crazy for roommates to work out, based on past experiences, so everyone is trying to find a solution that doesn't involve her being homeless again.
The current plan is for her parents, who are stable because they live modestly but are not at all rich, to BUY HER HOUSE for her, and then lease it back to her on a rent-to-own basis. When they die, whatever unpaid balance remains is supposed to come out of her share of the inheritance, assuming there is any left. If there's an interest rate on that loan, I have no idea what it might be.
My wife is the executor of their will, and this sounds like a nightmare scenario to me. Her parents aren't exactly the most organized people, and I'm pretty sure their idea of tracking the payments is going to involve a yellow notepad with handwritten notes on it, if they remembered that month. Without a good record of the payments, she'll have no idea how to divide the estate. If there's not enough left over to clear the balance, are we going to have to sell the house again and boot her out? Because in that seemingly likely scenario, she's just going to be homeless then instead of now, which I guess is still the preferred solution?
Maybe all of the siblings are fine with foregoing their inheritance in order to support their addict half-sister that none of them really talk to or interact with in any way? The rest of the family is pretty normal, and not in danger of homelessness with or without an inheritance, but most of them are not so well off that few tens of thousands of dollars would be an easy thing for them to let go.
And I'm not even sure how this proposed plan would work out, logistically. Can the parents legally buy their daughter's home without an open competitive bid process, in which they might lose the house or bankrupt themselves to acquire it? What happens when the daughter fails to make payments, if anything? If the payments are based on below-market interest rate, they'll be depleting the inheritance for every kid, in order to support just one kid, and I'm pretty sure that is not their intention.
The whole situation is F'ed up. I consider myself lucky that my household doesn't struggle with debilitating health issues, addictions, or emotional problems. The whole MMM philosophy is great for well-adjusted people who can hold down a steady job and stay functional, but lots of people aren't so lucky. It's those marginal cases where the idea seems to break down. Some people are just destined to be poor, it seems, no matter how easy the FIRE math looks to the rest of us.