What would you advise?


L

LKYPon

Here's the fact pattern:

Son is 50 years old and has lived with his parents his whole
life. Both parents are deceased and he is still living in
the house. He can't hold onto a job. He is actually a very
smart guy, just can't keep a job.

He has mortgaged this house to cover his expenses and
currently paying 14% interest on the mortgage.

His sister is bailing him out and refinancing the house at a
reasonable rate.

She wants to sell the house in 2 years, hoping the brother
will clean up the house so it can be sold.

I don't expect him to change. Therefore, in 2 years I
expect this house will still be a mess.

What would you advise?

Sell the house now and let the brother go homeless? The
sister seems obligated to help this guy out, but he's not
doing anything to improve himself.

Believe it or not, I've seen this fact pattern a few times
already. It's been really tough. I don't know what to do.

Cheers,

Larry
 
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S

Stuart Bronstein

LKYPon said:
Son is 50 years old and has lived with his parents his whole
life. Both parents are deceased and he is still living in
the house. He can't hold onto a job. He is actually a very
smart guy, just can't keep a job.

He has mortgaged this house to cover his expenses and
currently paying 14% interest on the mortgage.

His sister is bailing him out and refinancing the house at a
reasonable rate.

She wants to sell the house in 2 years, hoping the brother
will clean up the house so it can be sold.

I don't expect him to change. Therefore, in 2 years I
expect this house will still be a mess.

What would you advise?
If the sister is co-owner, I think the first mistake was
refinancing, particularly to pay current bills. She didn't
need to agree to that.

Personally I'd leave him in the house but not pay any of his
bills (other than the mortgage). When he gets hungry it may
motivate him to go do more.

There is a possibility that the guy is depressed or has some
other medical condition that can be treated. So I'd also
get him to a doctor right away to make sure that's not part
of what's going on.

Good luck.

Stu
 
P

Phil Marti

Son is 50 years old and has lived with his parents his whole
life. Both parents are deceased and he is still living in
the house. He can't hold onto a job. He is actually a very
smart guy, just can't keep a job.

He has mortgaged this house to cover his expenses and
currently paying 14% interest on the mortgage.

His sister is bailing him out and refinancing the house at a
reasonable rate.

She wants to sell the house in 2 years, hoping the brother
will clean up the house so it can be sold.

I don't expect him to change. Therefore, in 2 years I
expect this house will still be a mess.

What would you advise?

Sell the house now and let the brother go homeless? The
sister seems obligated to help this guy out, but he's not
doing anything to improve himself.
I'm not sure who you're advising, but if it's the sister I
suggest she not make the same mistake her parents made and,
if she has the legal ability, throw him out on his butt
yesterday. You're absotively right that nothing's going to
change in 2 (or 20) years unless she makes it change.

Phil Marti
Clarksburg, MD
 
D

David Woods, EA, ChFC, CLU

LKYPon said:
Here's the fact pattern:

Son is 50 years old and has lived with his parents his whole
life. Both parents are deceased and he is still living in
the house. He can't hold onto a job. He is actually a very
smart guy, just can't keep a job.

He has mortgaged this house to cover his expenses and
currently paying 14% interest on the mortgage.

His sister is bailing him out and refinancing the house at a
reasonable rate.

She wants to sell the house in 2 years, hoping the brother
will clean up the house so it can be sold.

I don't expect him to change. Therefore, in 2 years I
expect this house will still be a mess.

What would you advise?

Sell the house now and let the brother go homeless? The
sister seems obligated to help this guy out, but he's not
doing anything to improve himself.

Believe it or not, I've seen this fact pattern a few times
already. It's been really tough. I don't know what to do.
I would advise them to watch Dr. Phil. Seriously, you can
only advise as to the best tax outcome. Advising as to
personal family issues is NOT something you want to get
into. For a tax professional its a no win situation.
 
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J

Jane

Unless you are the sister, I suggest you let them handle it.
It is not a pretty situation and whatever advice you give
would be unwelcome. If you are the sister, my advice is go
with your gut feelings about it and don't allow outsiders to
bully you into a decision you're not absolutely comfortable
with. Good luck.
 

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