I would say it is nearly impossible to prepare if you do not know what their actual financial position is. The first thing is to get a handle on their current situation. I think if they know where they stand that can help them change their behavior.
The good new is that it's not like the will starve or be homeless. They have asses such as the business and house, which can be liquidated. Hopefully not at fire sale prices, so they need to develop an exit strategy.
Worse case scenario, if they burn through their assets, they still have social security and other government safety programs, such as SNAP, Section 8 housing, ect.
I think part of the problem is that they refuse to divulge everything but my wife has a decent handle and probably knows more than I do. She just hasn't discussed all the fine details with me. I think there are some accounts she is unable to access, especially the restaurant-related stuff, which is pretty much all the CPA handles. I think it's easier for her parents just to tell us not to worry about it and then brush it off when we try to tell them this affects us too. I think they're in denial. There was actually someone who approached them about buying the business, which is what we thought they wanted because they did list it for sale at some point, but they keep switching back and forth about selling or keeping it. I'm not sure how much the business is worth but I'm sure the CPA knows. The question is how far involved do we want to get into their business. It feels like we'd be encroaching and crossing the line a bit too much. As far as the home, there's an idea of how much it's worth and how much they could get back - I'm guessing they might be able to sell it for above market as it's in generally good condition overall. Probably need to sit down and run the numbers though.
First of all, I think it is wonderful that your wife and her brother are a united front--it sounds like they agree on many things about money which is rare in many families. Your in-laws sounds like very good, hardworking people operating under a broker belief system.
How are the communication dynamics in the family? By this I mean, have you ever had your in-laws and your brother in-law over for dinner and a family meeting to discuss your concerns?
Having honest communications with parents can be hard, but I think your wife and her brother have a few issues that they really need mom and dad to hear and understand.
1. The house. Buying a house so that you can leave it to your children is admirable. But the children do not want the house and all they will be left with is a mess that will no doubt end with them handing the keys back to the bank after mom and dad die. Do mom and dad get this? They need to have this made very clear to them.
2. It sounds like there have been money conversation that led to them handing over the credit cards in the past. Is there some denial here that they continue to be reckless with debt? And the fact that your wife and her brother need to have a secret savings account for their parents--why can't they openly talk to their parents about this?
To me, when the parents are acting like children, then the kids need to empower themselves to act with more authority. I am sure they have great respect for their parents and don't want to hurt their feelings, but the parents are doing the bigger hurt by being so oblivious and dare I say acting quite immature. Could dementia or something related be a cause?
Is your wife the executor of their will? Perhaps she can use estate planning and an entry to discuss their finances.
Good luck.
Yes, my brother-in-law loves my wife very much. He himself has had his share of financial woes as well, including being out of a job 2-3 or so times in the past 5-6 years. He's 15 years older but seems to have more of the traits of his parents when it comes down to financial sense (oh spend now think later. enjoy life. run up the bill, you'll pay it off with the next paycheck, etc). He's obviously gotten a little better about this after having been unemployed for months to over a year at a time. But he still has that mentality. My wife thinks it's because when he grew up, the restaurant they owned at the time was flourishing. And she thinks she's the way she is because when she grew up, the restaurant was suffering - there were lots of bad memories she has where she grew up with the electricity and water being shut-off at times because her parents couldn't pay. All these experiences were rough on her and made her flip the other way completely - she's so extremely conscious of spending and overspending. But she knows very little about investing, which is something the both of us have taken up on trying to get a better handle on as of late.
But yes, my in-laws are extremely hard-working. They are just so unwise when it comes to managing and handling their money. And they are the kind of people who give everyone else benefit of the doubt, to the extent that they constantly are getting taken advantage of (including financially). It's really bad in that sense.
Communication can be tough. For one, they primarily speak Chinese with one another and I can't speak or understand a lick of it. So there's that language barrier and my wife and brother-in-law basically have to share their own tidbits of advice, which their parents really don't take into much consideration. They kind of brush a lot of things off that are suggested to them. Not even just financial stuff. That's just how the relationship is - the parents *know* they know better and therefore take any advice their kids give them with a grain of salt. It takes a lot of failures or losses before they come around and realize they aren't always right. There's a lot of pride at stake. I'm sure a lot of it goes along with shame and embarrassment that they don't want to reveal to their kids (this is common in Chinese/Asian culture - don't show face or put up a good one even if things are at their worst. Not being embarrassed is more important than going broke, basically).
As far as the home situation, I think they realize that the kids don't want to inherit and pay for it. I think they will still try to find ways to get us to take it but I really doubt that we will. If her brother wants it though, he can have it all. We don't want to have to deal with and take on a financial burden like that. They live over an hour away from us as well, and the brother is up in the Bay Area. So unless he moves down here, who's going to manage that property?
The credit cards were much more of an issue before because they ran up crazy amounts of debt. Fortunately we were able to help them pay it all off, but there are still remnants of bad behavior here and there (especially with making late and small payments). These are the kinds of things I've told my wife to get the CPA friend to nudge them on, and maybe he has too, but it just seems like they revert back to "I know better than you" on this one. I think we will have to go ahead and talk to them again about being wiser about things and also divulging them in the accounts that have been setup. I agree all these matters should be more transparent in the sense that the parents know and accept what the kids are doing. I know they're going to feel ashamed that the kids have to help them but it is what it is.
The most recent example of this pride/shame complex is on a family vacation we just took to Korea and Taiwan. It's probably not good that I'm even sharing this, as you'll probably be wondering why they went on vacation if they're so strapped for money. I guess the point is that, at least in the past year, they're not border-lined as much as they previously were and have some room to spend so they did. In this case, they also have relatives who they hadn't seen in over 30 years, and wanted to go back while they still can. So... good justifications and worth the money and time I suppose. But back to the pride/shame complex: because my in-laws never took my wife on any family vacations growing up, I think his guilt/shame caused him to INSIST that he pay for *every* meal, museum/park ticket, taxi ride, etc while we were there. At first we refused but after understanding the regret that he probably felt not being able to really "spoil" his daughter growing up, we obliged within limit and let them pay for the food, tickets, and some taxi rides. It wasn't too much more, and I suppose it was good enough reason based on this understanding, but we still felt kinda bad about that.
But as suggested, I agree and think it's a good idea to have another "round-table" discussion on finances. Her brother is coming to visit in February next year so that would be a good time for everyone to talk. But I think even before that, she needs to try to have a serious discussion with them. It's hard for her because she easily gets riled up with them as they seemingly say things that infuriate her when it comes down to basics (e.g. "Oh I didn't know the interest grows when you don't pay the cards off! Can't I just keep paying them $50 every month and it's OK?" - that's just one example). I try to coach her on some of these things but I think we'll have to go into these discussions with all things laid out. And probably in an environment that's outside of the restaurant, which is where we end up "spending time" with them 99% of the time when we visit. Not sure about dementia - they both seem pretty active and alert. I think they're just extremely naive people (e.g. back to my point about them giving too much benefit of the doubt) and don't know a lot of things and don't know any better. Except, they are stubborn and kind of have a "my way or highway" mentality.
I don't even know that they have a will! This is also something I think I brought up but is kind of one of those things where they feel ashamed to talk about. I think they think they can just pass stuff down to us or that when they die everything they own will automatically be ours just because we're their kids. Maybe they're not THAT naive but I'm probably just assuming that because I haven't heard much of anything about them having a will or trust.
