MIL making loans to BIL and family at 89

[limberlost]

MIL made a loan of £25,000 to BIL so he could buy a prestigious 4x4. This was 2 years ago. She was somewhat surprised that her bank sought reassurance that she wanted to do this.

She owns a house worth £200,000 and savings of about £80,000. Her pension income is about £20,000 pa.

She informed us this week that she intends to make a loan of £20,000 to DNephew for a house deposit.

I have suggested to DH that this is almost a safeguarding issue. I believe that she has moderate cognitive impairment and is very forgetful. She firmly believes that her care will be undertaken by her son's aged 68 and 65 and their families. She says if anything happens to her the money will be paid back out of DN's share of her will. The will is structured in a way which means each grandchild will receive on current estimates £12,000.

Should anything be done about this?

I’m not sure what you can do to be honest. If she’s deemed to have full mental capacity then as hard as it sounds it’s up to her how she spends her money - she could (like my mum) give it all to the dogs trust or something!

I think all you can do is maybe say to her that nothing is set in stone and it may be that her care needs become too complex to be cared for by her sons so it’s good to have a back up plan!

Has BIL been paying back his loan over the past two years?

Your DH should encourage his DM to get everything in writing that these are loans that must be paid back and that if she were to pass away during the term, then the remainder of the loan gets settled in favour of the beneficiaries of her will.

I have no interest in her money for myself and have made sure that no money is bequeathed to me. We already have a good lifestyle in retirement. However I am not physically or emotionally able to care for her. My husband still works on a part time basis and needs to be active.

My concerns centre around her failure to understand that her care needs will increase and that her fallback position of family care is unlikely to happen. It would be fair to say he is not a natural carer.

Thank you for your comments.

I do believe the loan to BIL is being paid back, although slowly.
The loan to DN will be larger than anything he will get as a bequest.

I suppose I am worried that the loans will be seen as deprivation of assets although I suppose this may never arise.

I think this is a very difficult issue and feel for you. We had the same issue with my SIL who has had over 100k from FIL in the past 10 years with 60k of it given in the past few years when he was clearly cognitively impaired and at first living with carers and continued in his early days in a nursing home due to his failure to cope at home both physically and mentally. Although he was diagnosed with dementia and was clearly confused ( thinks his wife is still alive, that Thatcher is still PM, that he owns the nursing home, that I'm his long dead sister etc) it was very difficult to get POA in place even though he'd sorted out all the paperwork prior to his dementia. It was only that he decided to grant financial POA that resolved that. SIL has now denied she ever got any money from him (it was meant to be paid back and we can see the withdrawals in historic bank statements) but with nothing in writing there is nothing we can do. We also suspect that she inflates any expenditure she occurs on his behalf, (we have good reason for this plus it's something she has a history of doing) whilst querying every penny for any expenses my DH incurs. We've put everything on direct debit now so that helps but there is one large area of expenditure that my SIL won't put on direct debit, we think she inflates the costs and which FIL doesn't really need or use and we're pretty sure my SIL is using it for herself and family. Can't say what it is as too outing and she's on Mumsnet. We thought about the safeguarding aspect but doubt we'd get anywhere. I'm not surprised by SILs behaviour but it's opened my DH eyes to it. In her case, she's an unhappy and quite socially isolated lady at the best of times and nows she's alienated her only sibling.

I told 2 of my adult children about it. One said that it would have been nice to have had the offer of a loan. They both expressed their views on the favouritism shown to that side of the family. One pointed out that she has always before stated that she believes in everything being equal.

I feel that MIL has done herself no favours with this.

That's exactly our view, PIL were always very vocal about treating their children equally. PIL did offer to put it right in their will (when the loans were about 50k) but DH decided (and I agreed) that as SIL has no pension provisions of any value, to draw a line under it and for the will to leave assets to be divided equally. We couldn't face the drama from her if we were given more and at that time, as she was recently divorced, and only in her late 40s we thought she'd get a full time job and even some qualifications. That was part of the deal of the original loan from her parents as MIL was still alive at that point & she was particularly keen for SIL to be able to stand on her own two feet.

However, MIL died and SIL she then got another 50k over the next few years and lobbied FIL to rewrite his will in her favour as apparently we are rich! I wish, we're not, we just work more than she does. She has a very poor work history and has worked part time for decades and post divorce, has continued to work part time so is short of cash but refuses to get a full time job. We know this as he told us about it several times but the will is still divided equally.

It's not fair and I can really empathise with your situation. My DH and I aren't concerned about the money, we've always worked on the principal that we'll get nothing and anything we do is bonus, but it's the lack of equity, treating brother and sister differently and the underhand and manipulative behaviour of my SIL who thinks others should pay for her lifestyle and the continued asking for money over several years from her vulnerable father that's upsetting. She'd punish him if he said no by not phoning him, ignoring calls from and not visiting him. Now he's in a nursing home that's very near to where she lives, (walking distance) she only goes once a fortnight for 30 mins ( we know this as the home tells us and also the visitors book shows this as well) and the home phones us if any issues. We live 300 miles away!

"I feel that MIL has done herself no favours with this."

in what way?

If you are worried about care and deprivation of assets, the only thing to do is sit down and tell her that the possible deprivation of assets might impact on those to whom she has given gifts.

but really, those who are being gifted should be aware of that shouldn't they - isn't it those people who will be contacted by Social Services if the deprivation of assets thing happens?

@Rosawaiting - exactly - deprivation of assets is a thing & a friend of mine is having this argument with her brother ( except she has stopped talking about it because it becomes his problem not hers ) The Mum in this case thinks she is looking after her family & Ds is doing the right thing. Not sure. It sounds to my friend like DB is just using money which could be used for their mother's care.