The following AskPB question has been lightly edited to maintain the submitter’s anonymity. However, we thought a wider audience would benefit from both the question and Cameron Huddleston, author of Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances, detailed response. We thank both the listener for the question and Cameron for taking the time to follow-up.

I just listened to the “Talking Money with Your Parents” episode ft. Cameron Huddleston and I’m disappointed. The episode focused almost entirely on parents who have money. For many millennials like myself, inheriting anything but debt is laughable.

I want to know how I can help [my mother] now and what liability my siblings and I will have for her debts when she passes away. Will we take on her debts when she dies? Would it be split three ways or dumped on one of us? Will she lose her disability benefits if she sells her house? Should she sell it to one of us for a dollar so we can sell it and help her live on the profits of a resale? Or would that just negatively impact our ability to get first time home buyer tax credits when we buy a house for real? None of us ever want to live in there and we just want her to live out the rest of her days peacefully.

Marcus and Rich reached out to me to let me know that you wrote to them after listening to their interview with me on Paychecks and Balances. I’m sorry you got the impression that the conversation was geared just toward people who will inherit money. I think these conversations are even more important to have if your parent doesn’t have much money – or even a lot of debt, as is the case with your mom – because you will likely have to play a very active role in your parent’s financial life.

You mentioned several concerns you have about your mother in your email to Marcus and Rich. I’m going to address as many of them as I can, and, hopefully, you’ll find my advice useful.

Let’s talk first about the debt that you said your mom has. The good news is that you and your siblings most likely will not be on the hook for your mom’s debt – as long as you’re not a co-signer for that debt. For example, if your mom’s personal loans or credit cards are in her name only, you shouldn’t have to pay off what she owes when she dies.

However, during the probate process – court proceedings that sort out who gets what when someone dies – any assets that she left behind could be used to pay off her debts. If she has any sort of retirement account or life insurance policy, make sure she has named beneficiaries on those accounts so creditors can’t get their hands on that money and it goes directly to you and your siblings. I get the impression from your email that your mom doesn’t have any accounts like this, but I thought this information would be good for you to know just in case.

Of course, the best thing to do is help your mom deal with this debt now – as you said. You could start by helping her make a list of all her debts – how much she owes for each, the minimum monthly payments and the interest rates. Neither you nor she can make a plan to pay it off until you know what you’re dealing with. Plus, there’s an added benefit. Seeing how much she owes versus how much money she has coming in each month might make it easier for you to sell her on the idea of downsizing to a smaller house (more on that below).

If your mom is reluctant to talk with you about her debt – or you don’t feel comfortable helping her deal with it – the National Foundation for Credit Counseling has a network of member agencies serving all 50 states. These agencies provide free or low-cost credit and debt counseling. Your mom might be able to find an NFCC member agency near her by calling 800-388-2227 or using the NFCC counselor locator online at www.nfcc.org/locator. The NFCC is a nonprofit organization – not one of those organizations that promise to help get rid of your debt for a fee that your mom should steer clear of.

There are some other resources that might be useful for your mom. The American Association of Daily Money Managers has some members who volunteer their services to help low-income people with money management. The association’s website has a list of state agencies that provide daily money management services at https://secure.aadmm.com/state-agencies/. And the National Council on Aging has a wealth of information on its website, www.ncoa.org, to help older adults stay economically secure as they age. Its free BenefitsCheckUp service (www.benefitscheckup.org) helps seniors find out what benefit programs they might be eligible for to save money on health care, medication, food, housing, utilities and more.

As for your mom’s house, which you said is too big and is killing her financially and physically, there are a few things you could try to get her to consider moving. These are all tips in my book, “Mom and Dad, We Need to Talk: How to Have Essential Conversations With Your Parents About Their Finances.”

Focus on the financial benefits of moving: Your mom likely has a deep emotional attachment to her home. To get her thinking rationally rather than emotionally, you might have luck getting through to her if you talk about all the ways that moving can save her money. But don’t make it all about the math. Paint a picture for her of how reducing housing costs will free up more money for things she enjoys or are important to her. That’s what a financial planner named Mike whom I interviewed for my book did when he could see that the 2,400-square-foot home his parents had lived in for 52 years was no longer working for them.

Both of his parents had health problems that were making it hard for them to get up and down the stairs and keep up with the maintenance of the house. They also had a home equity loan and credit card debt they had taken on to help pay for Mike and his sister to go to college. So they felt like their debt was weighing them down, he said.

When his parents would make comments about the problems they were having with the house, Mike would use those opportunities to mention the idea of moving. He helped them search online for one-story houses, making it feel like it was their idea to move. Once they got comfortable talking with him about their debt, he started showing them how they could pay it off if they sold their house. Then he tapped into their emotions by pointing out how freeing it would be if they could wipe out their debt.

It still took a while before his parents came to grips with the fact that they’d be better off moving. Once they did, he said the emotion of feeling they could be more free financially and emotionally was better than the emotion of hanging onto a house that was too big for them and falling apart.

Focus on the social benefits: If your mom is lonely living in her house, point out how living in an apartment might make it easier for her to be with people her age. There are apartment buildings that are geared toward older adults and have age requirements for living there. And the U.S. Department of Housing and Urban Development offers affordable housing options for low-income seniors. You can get more information at https://www.hud.gov/topics/information_for_senior_citizens. Or perhaps you could help your mom find an apartment closer to you or your siblings with the promise that you could spend more time with her if she lived nearby.

Focus on the positive: When you talk with your mom about moving, don’t focus on all the reasons she can’t stay in her house. You especially don’t want to tell her she can’t stay where she is. As true as that might be, if you tell her that, she will feel like you’re taking away her independence. Instead, talk about all of the benefits of moving to a smaller, more affordable place. You could say something like, “Mom, wouldn’t it be great if you were in an apartment and there was someone to fix things whenever they weren’t working right? Wouldn’t it be nice if there were people right down the hall you could visit with or who could lend you some sugar if you run out? Wouldn’t it be great if you could spend less on housing each month so you’d have more money to pay some of your debt and things wouldn’t be so stressful?” Sometimes just letting your parent know that you don’t have any attachment to the home can help.

The other issue you mentioned is whether selling your mother’s house would impact her Social Security disability benefits. In general, if she is receiving benefits for a physical or mental disability that prevents her from working, proceeds from a home sale likely would not affect her benefits. However, rules for income-based government benefit programs vary from state to state. So you and your mom need to do the following:

  • Meet with an attorney who specializes in Social Security disability benefits
  • If your mom cannot afford an attorney, she can get free legal advice through your state’s legal aid program (do a search for your state or city name and “legal aid”)
  • Visit the local Social Security office to find out what your state’s regulations are in regard to disability benefits and home sale proceeds.

Don’t make any decisions about selling her home until you meet with an attorney or Social Security representative who can give you the lowdown on the rules in your mom’s state. That said, if you can get it confirmed that selling her house won’t impact her benefits, that might make her more willing to actually sell it and move someplace that’s more affordable and better-suited to her needs.

I wish you luck!

All the best, Cameron Huddleston

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