MIL summarily rejects preventative measures that are unpalatable, even if those measures prevent something worse from happening later. She will generally respond to developments only when it's a crisis. For example, in the four homes thing from above, she was planning on selling two of the properties, but took forever to move her stuff out (literally years). She waited until she had no cash and existing liens (taxes) on two of her properties until she asked me for help (in the form of a loan to float her). I offered to help under very specific situations (her daughter/my SO take over the project, loan secured with SO on one of the deeds). MIL rejected this and found some money elsewhere (I was aware of this, long story), but wound up selling under pressure and got way less than she could have otherwise. Suboptimal from start to finish. That is the person we're dealing with.
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I would think selling/HELOC would be preferable to having a court decide your home's fate. What I really don't know is, when her debt rivals her home value, how likely is it that creditors could force a sale? As some of you have indicated, dying in her home with a shitload of debt seems the best case.
I've tried to scare her. . . . I've pointed out she's likely to become a burden on us. Rarely does anything reach her except having no other options.
1. She's not scarable because she knows she has other options. Look at her history to date: every time she has run short, she has found some way to cover her immediate needs. Experience has taught her that all your lecturing is just fearmongering. The fact that other people can clearly see that it's actually true this time -- that she really doesn't have much more rope here -- has zero effect when compared against 70+ years of experience telling her she'll find a way.
2. Her choices are sub-optimal from the perspective of a financially savvy, responsible human being. That's not her. From her perspective, she found a way to manage the debt, without having to resort to your restrictions. That's a win in her eyes! She cannot and will not learn from her past mistakes because to her, they are not mistakes, but are instead examples of how everything worked out ok despite your lectures.
3. It's "preferable" to sell and downsize to an apartment only if you assume that her goal is to learn to be a responsible human, pay off her debts, and then live within her means. Again: that's not her. For someone like her, it's in her best interest to hang onto the house as long as possible. An apartment will have the sheriff at your door to kick you out within a month of not paying your rent. Creditors have to go through a much longer, more complicated process to seize your home -- and if your MIL appropriately invokes bankruptcy protection, there's a real question about how much the court would even give them in light of your MIL's age and lack of assets. Your worst-case scenario is that the home is forcibly sold and she's left with nothing in maybe 5 years. I can guarantee that if she sells the house now, she will have frittered away all of the profits from the sale on stupid stuff within that same period of time.
3.a. The absolutely worst thing you can do is give a shopaholic a giant pot of cash with no strings attached -- which is exactly what she'd get from selling the house. Even if she pays off the current creditors -- which is not guaranteed -- her history demonstrates that the new pot of money will go just as fast as all the others did.
3.b. The only possibility that someone like her learns to live on less is if she really truly does not have extra money to spend -- if she has no money in the bank, nothing valuable left to pawn, and no more available credit. The only way that happens before she's literally down to zero is if she keeps the house for as long as she can. Not that she'll actually learn to change, of course. But having her only remaining money locked up in an illiquid asset at least prevents her from frittering away her last cent for a few more years.
4. She is also not scarable because she is not remotely concerned about being a burden on you. Again, you are approaching it from the perspective of a rational, independent adult. That's not her. She clearly believes that she's entitled to have what she wants, when she wants it, and that it's your job to bail her out if her own income/assets won't cover it. You should therefore assume that she will come to you again, sometime within the next few years, and that she truly will be desperate then -- no matter what you convince her to do right now.
4.a. Therefore, your priority right now is
not helping MIL, because nothing you can say or do will move her in any way; any assistance you provide to ease her stress just becomes another example of how things always work out for her. Your focus
must be on developing a plan with your spouse for when MIL really does run out of options. How much support are you willing to provide? In what manner? The last thing you want is your MIL to play on your spouse's guilt and the resulting arguments to destroy your own relationship. Start talking and planning now, so that you and your spouse are a 100% united front whenever your MIL finally hits the end of that proverbial rope.
