Author Topic: Grandfather Wasted His Life Savings, Selling His House  (Read 5553 times)

jollygreen23

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Grandfather Wasted His Life Savings, Selling His House
« on: October 15, 2015, 09:24:33 AM »
My grandfather lost his wife to cancer 5 years ago. He's been frugal his whole life and, while I was growing up, they doted on their four grandchildren. My grandmother, before she passed, talked about how they lived well within their means so that their grandchildren could inherit their wealth. They had received an inheritance when his parents died and it had been a huge blessing.

Fast forward a few years.

My grandfather lives alone, about 30 minutes from my mom. (My mom has four daughters. Her brother has no kids/spouse and he lives about 5 hours away.) In four years, my grandfather blew through his entire life savings, cashing out 12 CDs in 12 months, and nearly everything else. He used the money to buy from shady people who have been known to target the elderly (buyer beware kind of reviews). (We don't think much can be done as far as legal action against these people.) Now his house is full of junk and his bank accounts are empty. (Junk like mismatched tea cups, coins worth half what he paid for them, boxes full of old programs from baseball games that he *thinks* he went to as a kid, paintings that no one (including him) likes, but he was told he had to buy as part of a lot to get the item he actually wanted.)

He has lied to my mom repeatedly about money and only admits what he's doing if confronted directly. He rationalizes and then tells her what she wants to hear, and then throws away more money. He has little left to his name besides his home and a monthly pension.

He's 80 years old and still fairly active, except he has a slow-moving cancer and the treatment can leave him wiped out. The doctors say the cancer will most likely not kill him; something else will get him first. (How comforting.)

My mom has been taking care of him. Feeding him whenever he shows up at her doorstep, letting him spend the night when he's too exhausted to drive himself back home/take care of himself, drives him to his appointments. She's mad about the lies and has said that she won't spend money to help him with his treatment if things get worse, because he could have helped himself and he threw it all away.

My mom finally convinced him to move into a assisted living facility. The lowest level of care they offer costs about what he gets from his pension, so he'll have little to nothing to spend beyond that. (They cover his basic needs, but he won't be able to go on binge shopping trips or anything.)

Now, there's a house worth between $225k-$275k full of junk and things my grandmother collected over the years. My mom is putting in a lot of work to get this house ready to sell. My question is, what should she do with the money?

Her brother will take whatever money he can get and run with it. He's mad about "getting cheated out of his inheritance." My mom wants the money to be available so she can use it to take care of her dad, if/when he needs it. Right now, her name is on my grandfather's bank account, so she can monitor things, but she worries that if she does anything to try to hide/protect the money from him, he'll pull her name off the account.

She really wants to do the right thing, and treat him the way she would want to be treated. In my opinion, my grandfather is an addict who can't control his spending. He lies, hides evidence, rationalizes, placates loved ones, and then repeats the behavior that's hurting him. I see him as mentally incapable of making his own financial decisions anymore. My mom doesn't think there's enough evidence to take over finances, legally. But if she did, she'd have to share the responsibility with her brother, who could care less about what their dad has left to take care of things, should they take a turn for the worst.

Would it be wise to invest the money and let him live off of the 4% rule? If we told him there was a lot of risk or taxes involved if he touched the principle, it might be enough to keep him away from it. My mom is leaning towards scolding him for his behavior (again), pointing out the consequences of his actions, and warning him not to touch the money in the bank account. Then she would watch it like a hawk. She's also considering only putting part of the money in the account, but she doesn't know what to do with the rest of it.

« Last Edit: October 15, 2015, 09:57:04 AM by jollygreen23 »

irishbear99

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #1 on: October 15, 2015, 09:36:14 AM »
My question is, what should she do with the money?

I'm sorry. What a tough situation.

Based on my understanding of what you've written, the question above is irrelevant because it's not your mother's money. I understand your grandfather is spending to his detriment, but unless your mother can get legal authority to take over your grandfather's finances (which you mentioned your mother doesn't think is possible at this stage), she shouldn't do anything with the money without your grandfather's consent.

"...(S)colding him for his behavior (again), pointing out the consequences of his actions, and warning him not to touch the money in the bank account" probably won't work because, in general, treating adults like children (even when they act like them) tends not to go well. Has your mother tried sitting down with your grandfather (maybe with a neutral third party, like a fee-only financial adviser) to come up with an agreed-upon plan for the money? Generally, I prefer to DIY, but in this case a fee-only adviser might help break the tension and come up with a plan that your grandfather can live with. He also might be more willing to listen to an adviser vs. the indignity (in his mind, I'm sure) of having his child telling him what to do.
« Last Edit: October 15, 2015, 10:13:46 AM by irishbear99 »

AZDude

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #2 on: October 15, 2015, 09:43:15 AM »
Any way your mom can get a court to rule he is in need of a guardian who can then control his finances, etc...?

Sibley

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #3 on: October 15, 2015, 09:50:29 AM »
I'd look into setting up some sort of trust with the house money, to be used for his care and then whatever's left  distributed according to his wishes after his death. Either a neutral third party or someone responsible in the family should be the trustee. An estate lawyer would be needed to set up the trust, and he'd need a new will as well. The advantage there is that access to the money would be controlled, so your uncle could be kept out of it. And since it's a legal entity, if the trust money is abused (uncle), there would be legal recourse.

jollygreen23

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #4 on: October 15, 2015, 10:01:16 AM »
My question is, what should she do with the money?

I'm sorry. What a tough situation.

Based on my understanding of what you've written, the question above is irrelevant because it's not your mother's money. I understand your grandfather is spending to his detriment, but unless your mother can get legal authority to take over your grandfather's finances (which you mentioned your mother doesn't think is possible at this stage), she shouldn't do anything with the money without your grandfather's consent.

My mom is the one selling the house and orchestrating everything. Her dad trusts her to handle everything. We're hoping to convince him to do something wise with the money, with her help, but we're trying to decide what that "wise" thing is.

pompera_firpa

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #5 on: October 15, 2015, 10:11:29 AM »
Oh, jeez. Poor guy. Largely, it sounds like he's lonesome and he feels crummy and spending money made him feel better, briefly.  Usually that's what's going on when there's any kind of addiction at work: you know you shouldn't, you feel bad about it, but it HELPS (briefly, in a way that fucks you over in many other ways)-- which is probably a big part of why he lied about it.

Hopefully, the assisted living will get him involved in different things and give him a good social life. Changing your situation-- especially where you live and who you see every day-- means that it's a chance to break off old habits, so I'd make sure he has a lot of encouragement to develop new, better habits for making himself feel better, like talking to people and playing checkers or whatever old people do in groups. Delay the money bit for as long as possible, because it is his money, but the longer it takes for it to become available, the better chance that the new habits will sink in, and that will give your mom a better shot at making sure he doesn't blow through the rest of his money for no damn reason.



nereo

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #6 on: October 15, 2015, 10:18:48 AM »
My mom is the one selling the house and orchestrating everything. Her dad trusts her to handle everything. We're hoping to convince him to do something wise with the money, with her help, but we're trying to decide what that "wise" thing is.

First and foremost, I would talk with an attorney who specializes in elder law.  My parents had to go through something similar with my grandparents when she was in her 80s and started showing signs of dementia.
They will know how to handle assets, whether you need to be (or should even undertake becoming) a financial guardian, and countless other issues like end-term care. 

As for what to do with the proceeds - until this is all figured out keep it somewhere that's FDIC insured.  Later on you can decide if any portion should be invested, under what conditions and how.

Sorry you are having to go through this. 

MrMoogle

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #7 on: October 15, 2015, 10:25:36 AM »
I agree with Nereo, go talk with an attorney, but you should make your own decision once your options are laid out.

It doesn't sound like he's got long to live, so maybe part of this is him trying to feel like he's living.  How to help with that, I don't know.

Fishindude

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #8 on: October 15, 2015, 10:50:13 AM »
Mom needs grandpa to give her legal guardianship and power of attorney, otherwise she could wind up in trouble if the money isn't used as grandpa wanted it to be.
I wouldn't count on there being much left in the end.   In all likelihood most of that money will be needed to support grandpa in his final years.

Went through very similar circumstances with my own Mom.

jollygreen23

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #9 on: October 15, 2015, 11:44:51 AM »
I like the idea of giving him time to develop new habits. That might be just what he needs. He depended on this sleazeball, who told my grandfather what a "great deal" he was getting. I think that made my grandfather feel good, like he was making use of his money.

We're not planning on getting much, if anything, out of all this. We're more concerned about him being taken care of, and the fact that, even after all this spending, he's not any happier. My mom told me (and I agree) that if he had decided to blow all his money traveling the world and doing something worthwhile, we'd have no problem with it. But instead he cluttered his house (that looks like an episode of Hoarders at this point), which may have even hurt his health (because he doesn't clean anything, ever). My mom recently found a covered cake plate full of cookies in her father's pantry. She thinks the cookies were from her mom's funeral. *sigh* We're just so grateful that he's going to get the care he needs--3 square meals and a clean room will go a long way.

We'll look into talking to an attorney. We can't just let him throw away this money and watch his quality of life deteriorate because he couldn't afford to hire a nurse or something stupid like that.

lizzzi

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #10 on: October 15, 2015, 11:53:20 AM »
It's a long, frustrating slippery slope watching an elderly relative slide down from bad judgement to possibly confusion and forgetfulness to possibly (worst case) a full dementia. Remember that everybody has the right to make bad decisions, and just because most of us would not agree with those decisions...the person has every right to make them. You're probably not going to get a guardianship until he is more impaired than he seems to be now. And it is his money. At least the daughter is on his bank account, so that gives her some leverage. She needs to be the POA now that he's in the facility. And keep his son out of it, as seems obvious.  I think it is reasonable for the daughter tp pre-pay a funeral for him, and to use his money for expenses related to selling the house. And for his personal needs, of course. Clothing, a computer or TV or a recliner for his room in the facility, etc. (Document the transactions and keep the receipts.) Past that, I'd be sure to confer with an elder law or estate planning attorney, to try to preserve the assets for the grandpa's health care. It sounds like he's going to need more going forward than his pension will cover. (OP didn't mention a social security check...Maybe this is a Canadian family?) If grandpa is marginally capable of handling his money (yeah, right) OP's mother may not be able to do much, unfortunately. The chips may just have to fall. You can advise, suggest, cajole, persuade...but you can't make anybody do anything. It doesn't sound like he's anywhere near being the kind of patient who needs a guardian.

OP did not mention any other medical conditions besides the slow-growing cancer. (Prostate perhaps? No need for us to know.) Anyway, I think if there are not any other dire diagnoses,  it is very possible that grandpa will live a long time, and need his money.

Kaspian

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #11 on: October 15, 2015, 11:56:07 AM »
I'm going to go off advice here and say your grandpa doesn't get facilitated care and nothing left to spend while your mother and her brother get $275K from the sale of his house.  Unless he has Alzheimer's, that money is his while he's still alive.  He can do with it as he sees fit--waste it, save it, whatever.  You don't get to usurp a person's right to their property just because they're an irresponsible, old spendthrift.   

lizzzi

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #12 on: October 15, 2015, 11:58:44 AM »
That's pretty much what I said, too, Kaspian. But it can be frustrating watching a loved elderly family member harming themselves and what's left of their future by making incredibly bad judgements.

MrMoogle

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #13 on: October 15, 2015, 12:56:36 PM »
I'm going to go off advice here and say your grandpa doesn't get facilitated care and nothing left to spend while your mother and her brother get $275K from the sale of his house.  Unless he has Alzheimer's, that money is his while he's still alive.  He can do with it as he sees fit--waste it, save it, whatever.  You don't get to usurp a person's right to their property just because they're an irresponsible, old spendthrift.
Actually, change in spending patterns is a symptom of the onset of Alzheimer's, and other mental issues.  It might not be related of course, but this is certainly a reason to be worried.  If it is a disease, he might not be choosing this, as much as he thinks he's choosing this.

https://www.agingcare.com/Articles/elderly-parent-spends-too-much-money-shopaholic-135925.htm

Quote
However, if your parents' finances are off and they are spending money on things you know they would never have bought before, or if they are not paying necessary bills while they are throwing away money on TV offers or Internet shopping, there is a genuine problem. It's possible they may be in an early stage of dementia.

jollygreen23

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #14 on: October 15, 2015, 12:58:04 PM »
I'm going to go off advice here and say your grandpa doesn't get facilitated care and nothing left to spend while your mother and her brother get $275K from the sale of his house.  Unless he has Alzheimer's, that money is his while he's still alive.  He can do with it as he sees fit--waste it, save it, whatever.  You don't get to usurp a person's right to their property just because they're an irresponsible, old spendthrift.   



At first, that was our philosophy. Then things got worse. Now, he's depending on my mother for more and more. He can't clean his house, prepare it for sale, have an estate sale, etc... He's not independent, no matter how competent he appears.

Except for maybe my uncle, getting the money for ourselves has never been a priority. We're not expecting an inheritance at this point. I mentioned what my grandmother told me before she died to show the contrast between the way my grandparents were living before she died, compared to now. I don't expect to inherit money, although it stings that my grandmother's wishes are being trampled. But this isn't about US having the money. It's about him having it when he needs it.

If anything happens to his health, he'll have no way to help himself and he'll expect my mom to pay for it. My mom will WANT to pay for it, and she'll probably go through an enormous amount of guilt watching the consequences of HIS actions. She wants to take care of him and will work herself to death to do it.

What happens when all it takes is $100/month more to make him comfortable? Will my mom be able to say no?

Keep in mind, my grandfather isn't kicking and screaming against my mom's help or advice. He nods and makes promises and sounds apologetic whenever they go over statements. I genuinely think he's addicted to spending his money. If we can sit down and talk to him about options when he's level-headed, he'll agree to a plan. But in the heat of the moment, when he's feeling lonely or depressed, the money will disappear.

We're not trying to go behind his back. Seizing control of his assets is at the bottom of our list. What we'd like is for him to voluntarily put his assets somewhere where they can help him later and not be a temptation to him until then.
« Last Edit: October 15, 2015, 01:59:04 PM by jollygreen23 »

mm1970

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #15 on: October 15, 2015, 01:37:11 PM »
I'm going to go off advice here and say your grandpa doesn't get facilitated care and nothing left to spend while your mother and her brother get $275K from the sale of his house.  Unless he has Alzheimer's, that money is his while he's still alive.  He can do with it as he sees fit--waste it, save it, whatever.  You don't get to usurp a person's right to their property just because they're an irresponsible, old spendthrift.   

At first, that was our philosophy. Then things got worse. Now, he's depending on my mother for more and more. He can't clean his house, prepare it for sale, have an estate sale, etc... He's not independent, no matter how competent he appears.

If anything happens to his health, he'll have no way to help himself and he'll expect my mom to pay for it. My mom will WANT to pay for it, and she'll probably go through an enormous amount of guilt watching the consequences of HIS actions. She wants to take care of him and will work herself to death to do it.

What happens when all it takes is $100/month more to make him comfortable? Will my mom be able to say no?

Keep in mind, my grandfather isn't kicking and screaming against my mom's help or advice. He nods and makes promises and sounds apologetic whenever they go over statements. I genuinely think he's addicted to spending his money. If we can sit down and talk to him about options when he's level-headed, he'll agree to a plan. But in the heat of the moment, when he's feeling lonely or depressed, the money will disappear.

We're not trying to go behind his back. Seizing control of his assets is at the bottom of our list. What we'd like is for him to voluntarily put his assets somewhere where they can help him later and not be a temptation to him until then.
This is a tough one, because it basically mirrors my husband's grandparents.  They didn't blow through all their money, but then they didn't have much to begin with.

It started by selling their house and moving them into a rental close by my in laws.  But then grandpa died and grandma ended up in a home.

My in laws noticed that they were becoming childish and belligerent.  They would ask them to do things (home maintenance, financial, whatever), and the grandparents would agree to get them off their back, and then do what they wanted.  It's frustrating, but I don't think you can do anything without power of attorney.

So essentially, that means it ends this way: in their state, when they were out of money, grandma ended up in a nursing home for 10 years.  A really cheap, depressing, state run nursing home, because she couldn't afford a nicer one.  Basically that requires you to spend down your assets on the nursing home.  Once they are gone, then the state covers it.

So.  It does kind of suck for your mother and her brother.  But it's his money.  Sell the house, put him in a home.  Use his assets to pay for the home.  And when he runs out of money, he ends up in the state home.  YMMV, might want to check on your state's laws first.

MayDay

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #16 on: October 15, 2015, 01:56:22 PM »
This is definitely a situation where you MUST consult an attorney. 

My grandmother started to slip, and my uncle took control (with all needed legal documents in place!).  He paid the bills, gave her set money for groceries, etc.  Luckily she was compliant. 

Eventually he sold her house to pay for nursing home care, and help the money in an account, and spent down part of it to pay the nursing home.  Then she died, and the remaining money was inherited by her 7 kids.

Poor financial decisions are often the first signs of dementia and Alzheimers.  They should not be ignored because "its his money to spend".  The reality is almost all 80+ year olds have some degree of mental impairment, which pretty much always includes financial impairment.  So if you grandfather is in agreement, go to a lawyer and set things up so your mom is legally in charge of the money- a trust or ???? (I am no lawyer obviously!). 

neophyte

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #17 on: October 15, 2015, 03:09:21 PM »
Echoing the "consult an attorney" sentiment. It is likely that he will have increasing medical costs or need to move from assisted living to a full-fledged nursing home in the future. Medicaid requires people to spend down all their assets before they will take over nursing home payments and there is a look-back period of several years where they will require any assets that were given away to be returned to pay for his care. Hopefully that will dissuade your uncle from trying to get his hands on anything. Pre-paying his funeral would be a good idea and would be considered a legitimate expense that Medicaid would not require to be repaid.

kite

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #18 on: October 15, 2015, 05:12:30 PM »
Echoing the "consult an attorney" sentiment. It is likely that he will have increasing medical costs or need to move from assisted living to a full-fledged nursing home in the future. Medicaid requires people to spend down all their assets before they will take over nursing home payments and there is a look-back period of several years where they will require any assets that were given away to be returned to pay for his care. Hopefully that will dissuade your uncle from trying to get his hands on anything. Pre-paying his funeral would be a good idea and would be considered a legitimate expense that Medicaid would not require to be repaid.

THIS X 1000.

Mom needs POA.  Convert assets to cash equivalents in his name that she manages.  His monthly cost of care can rapidly exceed the low quote Assisted Living is anticipating.  My Aunt with dementia needs $8000 worth of care each month.  My friend is spending  $17000 per month for her brother. 

bogart

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #19 on: October 15, 2015, 05:47:42 PM »
He can't clean his house, prepare it for sale, have an estate sale, etc... He's not independent, no matter how competent he appears.

Legally, he absolutely is independent, unless someone's gone through the legal procedure to have him declared incompetent.  I looked into this with my now-deceased father [Alzheimer's], and was advised it would have been hell for everyone involved.  Fortunately in our case this did not in the end cause problems as my dad's awareness declined and I made decisions on his behalf -- but had there been family disagreement e.g. between me and my brother, it might have.  If someone is acting on your granddad's behalf, I believe they need to do so (are legally obligated to do so) in a way that meets fiduciary standards, i.e., putting his interests first (and last, and only).  As others have said, if there's any question -- consult an attorney.

What we'd like is for him to voluntarily put his assets somewhere where they can help him later and not be a temptation to him until then.

Fair enough.  Good luck.

Others have raised the "what happens if" question, and I'll tell you -- if your granddad spends all his resources, cannot take care of himself/pay for his care, and his family's not willing to provide for him, Medicaid will, provided it can be demonstrated that he really has medical (as well as financial) need.  Not a situation I'd recommend given other choices, but it's the safety net that's there (to the extent one is). 

lhamo

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #20 on: October 15, 2015, 06:54:13 PM »
I'm sorry your family is going through this.  My mom had to deal with similar issues with my grandfather.  He got caught up in a variety of questionable investments as well as a habit of buying magazine subscriptions so that he would have a chance at winning the jackpot (publisher's clearinghouse type stuff).  Basically lost all his money and rotated for awhile between my mom and her sisters before he eventually went into a nursing home.

You might want to have a quick look at WHAT he put his money into, as sometimes these businesses are known to be targeting seniors and there might even be class action lawsuits he can join.  That happened in my grandfather's case.  At one point I think he even provided a deposition in a trial case.  I'm not sure if anything ever came of it, but seem to recall at least a minor settlement at some point.  And if the cases can help put these people out of business, it can help other seniors from becoming victims in the future. 

People who scam the elderly boil my blood!  I hope there is a special place in purgatory for them....

 

The_path_less_taken

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Re: Grandfather Wasted His Life Savings, Selling His House
« Reply #21 on: October 16, 2015, 07:26:54 AM »
If he is in a facility, and you're all trying to liquidate the collections and possibly the house, it sounds good.

There is no room to be a hoarder in a facility.

But...my first thing would be a counselor for the elderly. If they can get him to realize why he's hoarding and 'collecting' etc.....that might help.

I agree with the new people help break old habits: I also agree his main issue is probably loneliness. If the facility has lots of interaction and entertainment and trips for him to go on....the issue might solve itself.

I still think talking to an elder care lawyer might be a good thing.

Good luck. It's never easy to support someone who has these kinds of issues.