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My 94-year-old mother-in-law racked up $68,000 in debt

Discussion in 'Real Estate & Other Investments' started by Scorpio, May 14, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Mother’s Day Moneyologist: My 94-year-old mother-in-law racked up $68,000 in debt — or someone did it for her

    By Quentin Fottrell
    Published: May 13, 2017 12:24 p.m. ET



    This concerned relative believes someone else is spending her money


    [​IMG]
    MarketWatch is revisiting some favorite Moneyologist dilemmas for Mother’s Day on May 14.

    Dear Moneyologist,

    My 94 year-old mother-in-law has an unusual amount of debt for someone her age.

    She owned her Michigan home free and clear before she opted for a home equity line of credit (around 2009, I think), which now has a balance of roughly $43,000. And she definitely does not understand the complex details of the variable rates, the principal locks, etc. The market value of this home is very likely worth less than $20,000 maximum.

    Additionally, she owes about $25,000 on various credit cards. And of course, these outstanding balances do not cover her monthly utilities, insurance, not to mention food. Her Social Security and tiny pension are just under $1,500 per month.

    I believe this debt was incurred with the help of some of her children and grandchildren. It seems to me that the bank took advantage of her with the home equity loan since her income did not support the amount of debt. Is there any way to obtain some relief for her?

    Daughter-in-Law (Ed’s wife)

    Dear Ed’s Wife,

    None of this adds up. She is either shopping for massive amounts of designer shoes (or Clorox) online, taking secret weekend trips to Las Vegas or, as you suspect, her family are using her as an ATM.

    I suspect the latter.

    You need to gather the documents, talk to your mother-in-law in a very non-confrontational way (you don’t want to scare her) and ask her about her spending. Then mention if she made any of these purchases. “Don’t worry, we’ll take care of it. We’ll call the credit-card company and they will deal with it. This happens all the time. Everything will be fine.” The worst part of elder abuse, if this is what’s happening here, is not just the financial side, it’s the emotional abuse and betrayal of trust, and fear that the abused elder is left with financial problems they are ill-equipped to handle. That’s where you come in.

    Elder abuse is an epidemic. There are 1 million cases of elder abuse reported to National Adult Protective Services Association per year, which is a small fraction of overall cases. In fact, one in 10 respondents reported emotional, physical, or sexual mistreatment or potential neglect in the past year, according to a landmark 2010 study led by Ron Acierno and published in the American Journal of Public Health. (U.S. states are currently working on compiling a database of national elder abuse data.) The National Center on Elder Abuse, a government agency affiliated with the U.S. Administration on Aging, reports that elder abuse lags by as much as “two decades” behind research into fields of child abuse and domestic violence.

    Kathleen Quinn, senior advisor at the Washington, D.C.-based National Adult Protective Services Association, has spent her career dealing with these issues and has some key questions you should ask: Has your mother-in-law been diagnosed with dementia or mild cognitive impairment? Who has financial power of attorney, if anyone? If not, ask your mother-in-law to execute one that allows you to take control of her financial accounts. “It’s worth talking to the bank about the line of credit, especially if it is a community bank, or a national bank,” she says. Many large financial institutions have been taking an active role in combating elder abuse.

    There are several options to explore here: If these credit-card transactions are fraudulent, you would have to report them to the police in order to have any chance of having them written off. The home equity line of credit may be a more difficult debt to have written off. But you should speak to a lawyer about her mother-in-law’s options, if she was coerced into taking money out, or if it was done without her knowledge. “You could help your mother-in-law declare bankruptcy,” Quinn says. “She’d keep her house and be free of all this debt. It would also keep her relatives from running up more debt as she would no longer have credit.”

    That would be stressful and difficult on everyone involved. Given your mother-in-law ‘s advanced age, this would be the very last resort.

    Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyologist and please include the state where you live (no full names will be used).

    Would you like to sign up to an email alert when a new Moneyologist column has been published? If so, click on this link.

    Hello there, MarketWatchers. Check out the Moneyologist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas: inheritance, wills, divorce, tipping, gifting. I often talk to lawyers, accountants, financial advisers and other experts, in addition to offering my own thoughts. I receive more letters than I could ever answer, so I’ll be bringing all of that guidance — including some you might not see in these columns — to this group. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyologist columns.

    http://www.marketwatch.com/story/my...-in-debt-or-someone-did-it-for-her-2017-03-23
     

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