Question: My husband and I anticipate that my mother (age 84) will move in with us in 2021. She is growing frail, and we haven’t been able to visit with her during the pandemic. We want to ensure that we have all the financial bases covered, both for her sake and ours. Are there any red flags we should know about?
A good question, one I can speak to from personal experience.
My wife and I never expected that her mother would end up living with us. But when my mother-in-law developed health problems and needed help almost daily, the three of us decided she should move into our house. In all, we spent almost 11 years together.
It was certainly the right move; my mother-in-law was surrounded by people who loved her. But it was also a difficult move, emotionally and financially. My mother-in-law had a difficult time making new friends and finding new interests. (She had been living outside of St. Louis; my wife and I lived in New Jersey.) And there were days, I must admit, when my wife and I simply wanted our home to ourselves. (We were empty-nesters, for the most part; our two daughters already had left for college.)
As for finances, I made several mistakes. Among them:
Income and budgets
I knew almost nothing about my mother-in-law’s finances before she moved in with us. She hated talking about money. My wife and I learned, quickly, that—beyond a modest pension and equally modest Social Security check—my mother-in-law, whose husband had died many years earlier, had little in the way of savings. What’s more, my wife cut back on her hours at work to spend more time with her mother.
Interestingly, each winter, if my wife and I left the house—say, to run errands or see friends—my mother-in-law, who always felt a chill, would set the thermostat to “sauna.” Our utility bills from November through March were full of surprises.
The point: Even if I had known more about my mother-in-law’s finances, my wife and I still would have asked her to live with us. In hindsight, though, the three of us should have talked at length about money beforehand—how our household budget would change, whether my mother-in-law would contribute toward expenses, whether other family members (my wife has a brother) would chip in, if need be.
Two things here. First, my wife and I also discovered—again, relatively quickly—that my mother-in-law’s last will and testament and related documents were badly out of date. We cleaned up that paperwork fairly easily.
But second, my mother-in-law, as time passed, became increasingly concerned about money: whether she had enough, whether someone would try to “take” her checkbook, whether she would need to move, at some point, to a nursing home and how she would pay for it. My wife and I tried to reassure her, repeatedly, that she was safe, that we always would act in her best interests.
But again, in hindsight, I wonder if I should have talked with my mother-in-law about trusts and placing her admittedly limited assets inside one, and whether she would have felt more comfortable having a friend or other family member help manage her money.
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I would like to think my mother-in-law trusted me and my wife, but let’s face it: There are adult children who take advantage of elderly parents. As such, I think you’re wise, as you indicate in your question, to consider ways to safeguard everyone’s finances—you and your husband’s and your mother’s.
During the time my mother-in-law lived with us, our tax returns and hers were relatively straightforward. I filled them out myself. At one point, I researched briefly whether any tax credits or deductions might be available, given the contributions my wife and I made to her mother’s care. But nothing came of it.
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Looking back, I regret that I didn’t take time to sit down with a tax professional and consider ways we might have been able to reduce our taxes. For your part, start with IRS Publication No. 501, “Dependents, Standard Deduction and Filing Information,” and IRS Form 2441, “Child and Dependent Care Expenses.”
At various points during the years my mother-in-law spent with us, my wife and I modified our home somewhat: adding grab bars in my mother-in-law’s bathroom, improving the lighting around entrances to the house and in selected rooms and hallways, and changing handles on doors and faucets.
At some point, though, we knew bigger changes awaited us. All the bedrooms in our house were on the second floor, and my mother-in-law was tiring of climbing the stairs. Would we have to build a bedroom and additional bathroom on the first floor? Would we have to widen doorways if, at some point, she required a wheelchair? Would we need to find a new home, one that could better accommodate her changing needs?
As it turned out, my mother-in-law died before any of this was necessary. But again, this is something I could have done a better job of anticipating—and figuring out how we would pay for such changes—long before the need arose.
A final thought: You and your husband, if you end up sharing your home with your mother, are doing a wonderful thing. But it’s just as important to take care of yourselves as it is to care for your mother. My wife and I should have reached out more frequently for help, to friends, family members, our church, community services. You, and your mother, will benefit from that.
Best of luck on your journey.
Mr. Ruffenach is a former reporter and editor for The Wall Street Journal. His column examines financial issues for those thinking about, planning and living their retirement. Send questions and comments to firstname.lastname@example.org.