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.