Money and MIL - advice needed (sorry it is quite long)

[shil0846]

This is more about my mother-in-law, however it is starting to affect my relationship with my husband and I would really appreciate some advice.

My father-in-law died last year leaving a lot of debt, but also a lot of valuable art work. My MIL also had a £15k credit card bill on which she was paying masses of interest. When she was widowed, she couldn't afford to keep paying the interest and was desperate. We therefore paid for the funeral and also took £15k out of our mortgage to lend it to her for 3 months to give her time to sell some of the art work. We are paying 4% interest on this.

11 months later she hasn't sold anything. I have sent pictures of items to auction houses to get them valued, but when I tell her what they say she tuts and says she paid far more than that and she wouldn't sell for such a low price.

The added complication is that I had a baby 6 months ago and we need the money back to buy a bigger place (we're in a tiny flat) and to fund my maternity leave. My MIL is aware of this (I have told her as plainly as I can without upsetting her). Her reaction is to apologize and say that she is ruining everything...yet she just doesn't sell anything. Most recently when I raise it she's started telling me how lucky I am to have had all this time with my DS, as she went back to work when my husband was 4 months old.

I generally have a good relationship with my MIL, but am starting to resent the fact that my family is suffering because we paid her credit card bill. I also feel duped. My husband gets really defensive when I mention it and reminds me that she's lost her husband and he's lost his father. So we end up arguing.

I know that the grief is still raw and suspect she doesn't want to part with any possessions she bought with her late husband, but I'm desperate to spend longer with my DS and could do so if she would only pay us back.

Any advice would be much appreciated.

Xx

Yy Tobias - and I think your DH has inherited. A bit of this "someone else will pay" feeling with his talk of the car being family but yet still complaining about your lack of space.

Debts are only written off when someone dies if they have no assets. FIL did have assets - the house, car, art work etc were presumably partly (at least) his. If you die with both debts and assets then they offset the debts against the assets and if there's anything left it goes to the legatee(s) - if debts outweigh the assets then of course they're written off.

You can't have a system where all debts die with someone, but assets remain. If you did, nobody would have any incentive not to live on massive credit while simultaneously saving/buying a house on a whopping mortgage knowing that mortgage would die with them but the house go to their survivors.

MIL has (allegedly) considerably more assets than debts. She's just not prepared to sell any to pay those debts off - no, her son and DIL should service the debts so she can maintain her grande dame lifestyle.

Another yy to Tobias. I agree that DH may be emotionally invested in his image of his parents as these solidly upper middle class worthies, and the reality - that their social status and financial solidity was a carefully created mirage - is something he doesn't want to face, any more than his mother does. But he's going to have to, or his own child will grow up in real and genuine poverty.

I've been thinking about this with reference to you saying both your MIL and FIL taking out equity release on their property. I think you should read this. It reads very badly For example This makes the potential savings from remortgaging enormous. Take someone on a 7.39pc rate at Manchester Building Society, with a debt outstanding at £75,117, who moved to a rate of 5.51pc with Just Retirement this summer.

Had the customer failed to move, the debt would have climbed to £218,846 over the next 15 years. Even after fees of £1,995, remortgaging to the lower rate will save £46,785 by 2028, at which point the debt will have grown to £172,061.

There may be no money at all within the property.

I don't think it's entirely clear that when the OP said "equity release" she meant a formal equity release scheme, as opposed to regularly remortgaging to free up some of the house-price-rise-created equity, instead of paying off the house completely. You can use the house as a piggy-bank by getting interest only mortgages, after all, and OP has said he remortgaged just 5 years ago.

FIL was a financial advisor by profession. While he was a spendthrift, it's hard to believe he was stupid about the way he got his hands on those spends.

I think equity release is where you are loaned some money against your house but the debt is not paid back until the owner dies or the house is sold. The interest on it can roll over for years and eat up all the value of the home.

Remortgaging is where you borrow against the equity in the house and pay it back like a normal loan or mortgage.

It does sound like mil has the latter.

BUT unless you know how much remortgaging has been done, you don't know how much equity there is in the house.

Do the debts of one half of a married couple really disappear when that spouse dies?

I did not know that.

Doctrine - no, they don't.

I think that you need to talk really bluntly to DH about the choices you want for your own life.

Does he want to have the option of sending DS to a fee paying school, ever? That is looking like pie in the sky at present. What about a sibling? What sort of house does he want to be living in in ten years time?

Your MIL might live to be 99, so any planning based on receiving an inheritance is daft to say the least.

Assuming there is anything left to inherit. In my case, we discovered a mountain of hidden debt which had long since wiped out any assets we might even have used to pay funeral/burial costs... You could still be financing your MIL beyond death.

Yes, it could be Jarndyce v Jarndyce all over again!

My jaw has dropped so low reading this thread, every time I think it can't get any worse another debt pops up.

I can't believe he was a financial advisor.

She needs to get real and stop playing the little woman, she could ruin your future.

OP how are you today? Have you made any decisions about sorting this issue out with your DH.

I really don't think there is as much equity left in the house as anyone thinks/hopes and the whole thing is just spinning out of control.

I haven't done anything (including speaking to my MIL) since last week. It's the anniversary of my FIL's death this week so I dont want to do anything more til that has passed.

My DH told me that he had discussed with my BIL bringing my MIl to London (which means us paying for her train ticket, accommodation, taxis, meals out etc) for a couple of days this week, but I've put my foot down and said we can't afford it. I think he got the message.

I'm taking the view that if she wanted to see us badly enough she'd sell some of her valuables and fund it herself.

Hell, yes! Glad you were able to get him to see sense in this small way.

Well done re ticket, OP.

Well done, it's nice to treat people but only if you can afford it.

It's wont be easy to re-programme your dh though.

Not only 'if you can afford it' fluffy - no doubt many of us would, even if we couldn't really afford it, want to 'treat' and show gratitude to somebody who had helped us or whatever. OP has nothing to feel indebted to her MiL for - quite the opposite, in fact, she needs to pull up the drawbridge on any more financial dole-outs to MiL, just as she has done. Well done, OP.

Good for you - that must have been a hard conversation to have with your DH given the anniversary.

Does BIL realise that you have already loaned her £15000 and are paying, presumably, a shedload of interest on it each month, by the way?

BIL knows about the loan, but I don't know if he's actually focused on the fact we're paying interest. I get the impression that he's avoiding me at the moment, so I suspect my MIL may have been busy telling him how "unkind" I was to her on the phone the other day.

I should mention - in my MIL's favour - that my PIL lent us £6,000 for 2 months when we bought our flat. We didnt have any loan agreement in place, they trusted us to pay them back on the agreed date (which we did). That was one of the reasons I was content to lend my MIL the £15,000.

Just had another row with DH over this. It started when I suggested that he starts to get his mother used to the idea of downsizing. He got really defensive and said that he won't see his mother lose her home and he is going to help her with her remortgage when the time comes. I made the point that it is not helping her to enable her to live in a house she can't afford and does not need, but he just kept saying that it is her home and she WONT move. I said that's fine, but she'll have to find a solution which does not involve us.

We then started arguing about our £15,000 loan. His mother has £3,000 which she got from selling her share in a property . She has earmarked it to repay part of her debt to the bank and it has been sitting in her account for months. I asked my DH to ask her to use it to repay us instead as the bank is not chasing for it. He refused on the basis that it would leave her at the mercy of the bank and they would bully her. He then told me I was unkind and uncharitable.

It also seems she's trying different approaches. With my DH she's saying she's identified the items she's going to sell and keeps talking about the [2] items she's put into auction and how hard she's trying to pay us back. She's also in tears a lot. To me (when I suggests that she actually takes items to the auction house for sale) she fobs me off, says that the estimates they quoted are too low and goes off at a tangent.

My DH then said that MILs and DILs never get on and this is just an example of it. He seems to think I am being deliberately unkind about his mother when I point out how little she's doing to repay us.

God you are stuck between a rock and a hard place. It is all beyond a joke, if my DH wouldn't support me, I would be off to my mums for a couple of weeks no contact for him to have a long hard look at his life without me for you, do you have anyone there speaking up for you?

OP what are you going to do?

You're never going to get out of debt, and your husband seems hell bent on further getting you both into debt with no chance of moving out of your flat ever for the sake of his mother.

If the mortgage is in joint names OP will still be liable for the repayments, unless the flat is sold.

LEAVE HIM OP