What's your wife's take on this? Is she OK with you gifting the house to your dad?
If you've had similar issues with anxiety in the past though, then this thing with the house could be a red herring. Inevitably something else is going to happen in your life that causes you overwhelming stress and anxiety -- and those can both incur serious tolls on your physical health, btw. The markets have been strong since you retired 2 years ago. How are you going to handle your ER during a prolonged bear market?
You might benefit from cognitive behavior therapy or some other form of psychotherapy to help with your anxiety. Anxiety disorders are very real, probably more common than you think, and can be successfully treated.
My wife is fine with whatever solution is best for my health. The house was inexpensive, 50k. The value of the house is in no way tired to our FI plans, net worth, etc. I already treat it as a lost cause. What I omitted from the original post is that my father and I have a lot of negative history, all the way back to my teens. He's just always been a burden. My sister might tell you he's a terrible person and she doesn't talk to him much. I, for whatever reason, have had more compassion despite our past. I think part of that is that he's not the same person he used to be. A stroke, being hit be a car, and perhaps age in general has turned him into a kinda crazy, aloof, old man. Should I punish a crippled old man for a less than stellar parenting past? Maybe I'm just more forgiving.
It's not just the house that causes stress. It's a whole lifetime of bad experiences and memories that this issue dredges up. It's also the feeling of helplessness of having no control over someone else, when that person can do things that hurt you financially. It's the surprise letters from the City citing ordinance violations and the threat of forced clean up and an accompanying lien on the place. It's the crazy ideas he has for fixing something that I then have to spend an hour arguing with him about how that doesn't actually fix the problem and potentially devalues the house even more because someone will then have to redo the work the proper way later. It's the uncertainty that at any time I could incur some hassle as a result of him being not normal and the stress that comes along with remedying the situation.
I've seen a therapist in the past and I still take anti-anxiety medication. I resolved all of my issues but this one quite some time ago. The only way I know how to 100% resolve this one is my Dad dropping over dead or figuring out a way to ice my heart. I suppose I just wish there was a 99% solution out there I was more comfortable with.
It sounds like if you're in a position where you can gift him the house, you have nothing *more* to lose by letting him let it degrade severley to the point where when it is no longer needed you sell it for a complete loss (or make huge rennovations, either way)
Maybe I'm missing a detail, but it sounds like by gifting it to him, you're just trying to fake yourself out psychologically, while also making things more complicated.
But if gifting him the house increases cash flow, it might be a good logical choice
I've tried to think about the house this way. Giving it away makes it worth zero, so even lots of destruction is worth more than zero. You're right that there's a psychological aspect to it. If we gift it to him, we can make it crystal clear that the responsibility to not destroy it is his. I'm happy to manage the money and maintenance, but it creates a clear boundary between him and me. I think I would be better able to take a hard line in denying any further financial assistance than if the asset were to remain mine because then there's a desire to maintain value in the long run, but there will be an emotional cost to that. Technically it also eliminates any liability I might have either, which is a small plus.
It does create more cash flow, almost $3,000 a year. That's almost $30,000 every decade, which would be enough to support major maintenance, and hopefully help ensure than no more money would come out of our pocket.
I would question why he needs to live in a house? The purchase price and any maintenance costs you have/will incur could keep him in an apartment for a long time. What are his physical disabilities that make him need a ramp and handicap accessible bathroom but still allow him to do so much tinkering and "fixing?" If he really requires physical accommodations now, that will likely increase in future and maybe not allow him to live on his own anyway. I would look for another set-up for him that will take into account his current and future needs and eliminate his ability to damage things. So, an apartment, a rooming house, a senior's residence etc would be on my short list. And is he taking meds for ADHD and at least doing what he can to mitigate it's effects?
I'd guess the house is worth 50k-70k in it's current condition. The cheapest he could rent anything around here is 750/month so the process probably wouldn't last more than a decade, and that's assuming he wouldn't get himself thrown out of any place he's rent.
He's 65 years old and, while he's in a lot of pain, his doctor says he's in great physical shape. He could live another 30 years. He could never share a place with anyone because he is so different from everyone else. He's hard of hearing, loud, says things he thinks are funny but sound crazy to others, and he's a very late night owl. For instance, he built an air compressor that uses 3 different motors out of nothing but parts so he could use it in the middle of the night without disturbing the neighbors. He fixes industrial pumps, engines, works with lithium ion batteries and LED lights. He welds and paints, uses polymers like epoxy resin. His latest thing is figuring out how to use magnetism to make ferromagnetic fluids make different shapes. He's like an off-kilter Bill Nye the Science Guy. Yet he'll spend 20 minutes trying to figure out where he left the screw driver he just put down. He can forget to turn the spigot off in the time it takes him to walk from the end of the hose to the house. And it physically takes him 15 minutes to get out of bed in the morning because his body doesn't want to work when he first wakes up.
If he didn't have a yard to walk out into (an apartment) or a place that didn't allow any of the kind of stuff that he likes to mess with, he would be the unhappiest person alive because feeding his intellectual curiosity is the only thing that really makes his physical limitations tolerable. He's been on meds for a long time and sees his doctor regularly so he's definitely doing everything he can medically to treat his conditions.
Remember that if he owns the house and then needs a lot of assistance from Medicaid, Medicaid will get the house after his death.
I've thought about this as well and there's a part of me that wonders if it isn't worth it to be able to wash my hands of any future effect to our personal finances and the mental relief that would come from that.