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My in-laws are hardworking people who never had much money and were not good at managing it.
By the time he was in his 20s, my partner had taken on a caretaker role in their administration while managing some minor money management and my father-in-law’s extensive health issues. That caring is part of what made me fall in love with him. Over the years, he has been able to maintain firm boundaries, allowing us to help when needed, but still enjoy a warm relationship with them.
A few years ago, an elderly family member fell ill. This family member was close to my in-laws a long time ago, but they lost touch as they got older. When this family member’s power of attorney tried to deceive her, my in-laws stepped in to manage her finances and health care as she had no other living family.
It soon became clear that this task was beyond the capabilities of my in-laws. Although they didn’t want our help, my partner eventually had to intervene. This family member is about to become homeless and my in-laws are basically clueless. My partner is able to receive federal benefits for this family member that cover most of her care. It put a lot of pressure on my in-laws and we thought everything was fine.
But we recently learned that my in-laws took out a huge loan to pay for some of this family member’s care before passing away last year. Not only are the loans huge, but the interest rates are also appalling. My father-in-law told my partner that they had inherited thousands of dollars from her, but they decided to keep it instead of putting it on a loan.
My father-in-law’s health continued to decline, and my mother-in-law was overwhelmed. My father-in-law has always been the manager of the family finances, but he’s terrible and my mother-in-law doesn’t like to get involved. She may not know the details of the loan. She is approaching retirement age, but the loan, combined with their monthly expenses, threatens her ability to fully retire.
With some help, I think they can manage the debt and even determine if any federal benefits for this family member can cover a portion. But is there a way to present this information in a way they would accept? I’d love to use some direct language with them, like, “You won’t be able to retire without refinancing this loan.” But my partner worries that this will only add to my mother-in-law’s already numbing anxiety.
What should they do first to manage this loan? What financial services can we connect them to in the future, so if they don’t want to come to us, fine, they can go to this person?
– Loans, loans go away
dear loan go away,
Your in-laws are adults who can make bad choices if they want to. But unsolicited advice rarely goes well. Even if the motives are good, the person on the receiving end often feels attacked. If your mother-in-law already has severe anxiety, starting the advice by telling her she may never be able to retire can make things worse.
Your partner needs to take the lead here because these are his parents. He should try to turn it into a conversation rather than a speech.
He should ask his parents if they would like to sit down and discuss some financial issues. Heated conversations are best when no one feels ambushed. Ideally, the three of them would discuss the issue together.
Your partner should ask his parents neutral questions. How big is the balance? What is the interest rate? What is the monthly payment?
You said you were not sure if your mother-in-law knew the details of the loan. But I also don’t think your father-in-law is completely clear. Sometimes when people are overwhelmed with debt, they don’t know how much they owe or how much it cost them.
Once your partner learns the truth about the situation, he can ask his parents how they are feeling. Are they worried about their ability to repay the loan? What happens when mom retires?
If your partner is concerned that his parents can’t afford the loan, then he should say to them “I’m concerned about whether you can afford the payments, but I think you have a choice. Can we discuss that?”
The key is to keep the message free from judgment. Telling your in-laws that they made poor money management decisions will only put them on the defensive. But I would urge your partner not to shy away from this discussion out of concern for his mother’s anxiety.
If your in-laws are willing to discuss their options, your partner can suggest that they talk to financial consultant. Unlike financial planners and financial advisors who typically work with wealthy clients, financial advisors help low- and middle-income clients with basic money management. They often work with debt-ridden clients.
you can search Financial Counseling and Planning Education Association website Financial advisors for your state. Many charges are prorated. If your in-laws are open to the idea, your partner can offer to pay.
It may be beneficial to bring in a third party here. Professionals don’t have emotional stakes in this game. Also, sometimes people prefer to listen to guidance that is not from the family.
But ultimately, managing this loan is up to your in-laws, not you and your partner. Respect their boundaries, even if you disagree with their decisions.
Robin Hartill is a certified financial planner and senior writer for The Penny Hoarder.Send your tough money questions to [email protected] or chat with her penny hoarders community.
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