AIBU to feel cross and frustrated with mum? Money, mortgage, inheritance

[minifingerz]

I've posted about this on mumsnet before, but the situation has changed a bit in the past year.

The back story: dad did equity release on parental home a few years before he died. My mum never fully understood what she was signing her name to - she didn't understand the concept of compound interest, still doesn't.

Five years on from dad's death and mum now (now 81) lives in the family home with my older sister, who raised a 150K interest only mortgage on her salary to pay off the equity release, and is servicing this fairly large mortgage while she lives at home with my mum. If she hadn't done that it is likely the bulk of the value of the house would have been consumed in a fairly short period of time, leaving my mum stuck in a detached house with a massive garden, which she would struggle to maintain on her own, but unable to leave as she wouldn't have enough money available after paying the equity release off to buy another cheaper property in the very expensive area where she is determined to see her days out.

Now here's the problem: dsis has psoriasis which has become very very bad recently, to the point that her hands and feet are almost completely raw, and she is struggling to get through every day in her very strenuous and responsible (and physically active) job. She has to sleep with plastic bags on her hands and feet, comes home every with blood leaking out of the dressings, and has to spend half an hour after work every day debriding and soaking her hands and feet before wrapping them in clingfilm. This results in her barely managing to keep on top of her work and suffering from quite intense anxiety about it as a knock on. I can't see how she can continue in her job and neither can she, but if she leaves how will she service the mortgage? She is 53 and would struggle to get a job that in any other sector which would be feasible for her with her health problems. She has had this problem for years and has tried many different treatments which until recently kept it under control enough to allow her to function. In the last year however it's got really out of control.

Anyway, a family friend died earlier this year and left my mum 120K and my sister 30K, enough money to pay off the mortgage. As soon as my mum phoned me and told me about the inheritance I said 'brilliant, now you can pay the mortgage off and you can both stop worrying about your future in the house' (ie, can you afford to stay or will you have to sell and downsize if you can't pay the mortgage). DB said exactly the same, and so did my mum's best friend.

All fine. Except not, as mum has decided that she wants to use her part of the inheritance to get the (perfectly decent and functional) kitchen remodelled, go on cruises, and generally live it up, while my sister carries on servicing the mortgage.

My brother put it to my mum that my sister is really struggling with work, to which my mum's response was 'she's lucky to live here in such a lovely house, she's made her choices, now she has to deal with the consequences'.

I feel gutted and angry with my mum. My sister has grafted all her life and never complained. She has never had anyone who's 'got her back'. Her ex partner of 19 years was profoundly selfish and insisted on separate homes/finances until she left him. Then her next partner offered her the security of a home together, but turned out to be a violent abuser. He was a gambler and an alcoholic who ran through all the equity my sister had when she sold her flat to move in with him, and she ended up back in a rented property at 43 with nothing in the bank. She has never asked my parents for anything and is the most honest, sincere, principled person I know. I feel distressed that my mum can't take her needs into account, given that my sister is struggling so badly with her psoriasis. My mum's quality of life is so good for someone of her age. She has a very comfortable income, is active, is still driving, has enough of an income to eat out several times a week, go on holiday with her friends, employ a cleaner and a part-time gardener, and put money in the bank every week. She has a better social life than me and she hasn't worked full time since she was in her 20's. I could understand her wanting to live it up on her inheritance if she didn't already have a really good quality of life, hadn't already travelled the world several times over, been on a cruise, lived in beautiful homes etc. She's said that she wants to give some of the money to my db and me, but we've said firmly that we don't want it, that we want her to pay off the mortgage with it so that this stops being a worry for her and my sister.

It's like she can't compute that not paying off the mortgage means that my sister is trapped on a treadmill of full-time work which she is becoming too ill to cope with. If I try to get this point across to her she gets angry with me and closes down. Tells me to stop upsetting her, that she's old and can't deal with people upsetting her.

I feel oddly distressed about how hard-faced my mum is being. She's a loving person, but she's not behaving like a loving mother to my sister in relation to this issue. I can't see how it's going to pan out right now, and I'm worried about it causing a serious rift between us.

But the sister didn't just give her mum £150k - she bought a part of the house which she continues to own.

Having access to cash is hugely important for someone who has no means to earn income. The sister may or may not have the means to earn income in the future but that option is not there for the mum. That makes her vulnerable and open to exploitation. If I were advising the mum professionally I would be seriously advising her not to tie up or gift away her only real access to available money.

From the mums point of view, her husband was financially controlling and now when she has a bit of independence, her daughter, son and best friend are all making assumptions about how she should spend her money.

My poor sister. Indeed.

I feel like crying for her.

She has been a lonely person all her life, fiercely independent and hard working, very private, very self critical. This is hurting her so much emotionally.

I think you need to sell the idea to your Mum of downsizing now -( 2 bed naice detached bungalow or something??) which will mean that she can actually have a REALLY nice time spending the cash living it up.

Instead of having £120k to spend you could have £250k and still share with DSIS type of thing...

If that fails then I would seriously push your DSIS to force the sale of the house before the stress triggers psoriatic arthritis as that really could mean the end of her working and then, yep, they'll have to sell anyway...

DLA whilst sat with £120,000 in the bank and living in an £800,000 house? Fuck me I've got some nerve but that would be taking the piss frankly

If you're sister hadn't taken the loan what would have happened to the house? Would your mother have been forced to sell?

This is hurting her so much emotionally

Which isn't helping - vicious cycle - she's literally running herself ragged. Suggest in the immediate term she reduces her hours or takes sick leave, services the loan with some of her £30K and seeks some kind of holistic therapy / stress relief.

Maybe this might make mother think too. Especially if she takes a complete break from work.

God your poor sister, that sounds horrendous.

Could you all sit down together and have a sort of intervention about this? Make your mother understand (she'd have to be blind not to anyway) what is going on with your sisters health and that she can't keep working like she is. Present it like a problem for you all and ask her (mum) to offer solutions herself. Give her her place as the 'head' of the household but try to get her to work out for herself what her choices are going to do to her daughter.

I don't envy you one bit. I reality it sounds like the mortgage was a mistake and you should all have just left her with the equity release scheme, but it's too late now.

Whilst your sister carries on working, your mother may think 'well, it can't be THAT BAD'

Your mother cannot get equity release now your sister is on the property deeds as she is under 55. You sister would need removing from the deeds as part of the equity release process.
House prices in general have on average gone up 5-6% per year over any 15 year period in the past 60 years - you can check this on nationwide. Provided the interest rate is below this your mother would be in a neutral position in terms of assets in the house. PM me if you want any info on How ER works

"From the mums point of view, her husband was financially controlling and now when she has a bit of independence, her daughter, son and best friend are all making assumptions about how she should spend her money."

I understand what you're saying, but the problem is my mum is experiencing what I think is called 'cognitive dissonance' over this issue. She wants to have the money to spend as she sees fit (not on the mortgage) but she also can't contemplate selling the house. She knows on some level, but can't quite accept, that this requires my sister to continue in her unsustainable job. She isn't clear in her mind about what her choices are and what the consequences of those choices might be, and she's not clear because it's painful and taxing to think about. So she doesn't!

I wonder if part of the problem is that you do see the debt as being your parents debt. It isn't legally or morally. Your parents debt was repaid by selling part of the house. It is entirely your sisters debt. She got a share of the house in return. I understand she may have taken it on with your mums best interests at heart but really it hasn't benefited your Mum financially in any way and has increased the risk of her losing her home.

I don't think you can resolve this without either resenting your mum or forcing her to act against her own best interests.

I think you are missing the point that she was in a position to stay in the house and keep her inheritance.

Your sister changed that to protect your inheritance.

If your mother didn't understand ER and how it works she should make a complaint to the adviser who sold it! She would have a good case if she didn't know how compound interest works

"If you're sister hadn't taken the loan what would have happened to the house? Would your mother have been forced to sell?"

She would have been stuck in it forever with it slowly deteriorating around her, spending a huge chunk of her income on heating it, cleaning it and maintaining the garden.

At 80, even in reasonable health she is too disabled to cope with the house without a lot of help. She is hugely house proud and it would kill her to see the house deteriorate around her.

She would have had £120k to maintain it though!

Are you just wanting to vent or are you wanting encouragement to tackle the problem?

I would give her the 3 options in black and white with the consequences of each and tell her she needs to chose one by x date - otherwise the house will be sold so that sister can pay off her mortgage.

Is there really no naice small detached places for less than £600k???

"If your mother didn't understand ER and how it works she should make a complaint to the adviser who sold it! She would have a good case if she didn't know how compound interest works"

I think we are past the time when we could do anything about this.

My dad was introduced to the ER scheme by his solicitor, whose son was the one who eventually oversaw (and presumably profited from) my dad signing up. Although we are close to my parents we were told nothing until all the papers were signed and sealed. I don't know why. As kids all three of us have been independent from our late teens and none of us have had money off our parents. Both my sister and I attended uni as independent students in our 20's and worked all through, never taking a penny off my parents. We had no help with weddings or house purchases. I think my dad kept quiet about the ER because he knew we would question whether it was in my mother's long term interest.

"Are you just wanting to vent or are you wanting encouragement to tackle the problem?"

Both!

I've had some stinking good advice on this thread.

Thanks everyone!

"Is there really no naice small detached places for less than £600k???"

No. shocking isn't it!

"She would have had £120k to maintain it though!"

Well yes, she would now. But that's only become a thing since she inherited the money a few months ago.

My dad passed away 5 years ago. My sister has lived with her since that time. She really wouldn't have coped alone, money or no money. My mum has never lived alone.

It does look like you've done it all to protect your inheritance. When suggesting repaying the mortgage to your mum, would your sister give her share in the house back? Also, is your sister really that hard done by? If she didn't live in your mum's house, she'd need to rent somewhere and upkeep it too. Wouldn't she? If you just admit your own motivation to yourself, you could see if perhaps your mum would be willing to pay a bit of the mortgage down, your sister would pay the 30k down. If your sister isn't able to work soon, you and your brother could chip in. That way you'd help your sister - remember, you want to help her? That would also protect your inheritance for he future.

If your sister had bought her own house instead of buying a part of your Mums, do you think you would be equally insistent that your Mum hand over her inheritance to your sister to allow her to pay off her mortgage ?

What happens if next year, you need financial help but the money has already gone to your sister ? Would you expect them to help you out ?

I just want you to understand that there are so many variables and it's not just the case that your mum is being selfish. Maybe she has fears about facing her last few years in care. Maybe she wants to make the most of her current health. Maybe this is her time to be selfish. Maybe she needs a little time to be front of the queue. Maybe she is scared. Whatever the reason, you need to find a way to let this go because ultimately it is between your sister and her and you cannot be impartial.

There must be something smaller than where she is currently living that is therefore cheaper??? Possibly not on the market at this moment in time but...

Even if she went into a naice rental if she sold and one came up?

I do think you have to force her into making a decision of some sort! Even if it's she does equity release and she lives with the consequences of that in terms of not affording the upkeep sort of thing!

I think you all need to sit down with someone who can give you proper legal/financial advice. It all sounds too complicated and to be honest I can see it from both sides.

"or forcing her to act against her own best interests."

No one forced my mum to do anything.

She wanted to pay off the ER. My parents originally borrowed about 50k. What parent would be happy to borrow that sort of money then hand over an 800k house to the bank as repayment for that loan a few decades later, leaving their three children with nothing from their estate? Especially when one of those children would be single, in late middle age, with compromised health and living in privately rented accommodation?

My sister moving in and taking out an interest only loan to pay off the ER gave my mum some breathing space, a chance to say - if I need to move, if it all gets too much for me in the next ten years we can sell up and buy a smaller home (flat or semi) without the huge garden (and threats of subsidence). The ER was growing so fast that it wouldn't be long before there wouldn't be enough equity in the house to buy anything at all in the area.