Dear Family Advisor

My sister and her family moved in with my mom, and now they're spending all her retirement money.

Last updated: Oct 27, 2008

About three years ago, my sister and her husband showed up at Mom's house unannounced and said they had to move in with her until their tax refund check came. They never left. My sister has never worked, her husband finally works, and they have three kids in their 20s and various pets living there as well. They each weigh 300 pounds and are spending her money on beer, food, and cigarettes. They've taken over the house and sleep all day all over the living room floor.

Mom easily had enough money to last her the next 30 years and still leave her four children an inheritance. Now the people at the bank who run her trust fund (and have her living on an allowance) have told her that my sister's family is running through all her money and that she if she doesn't ask them to leave, she'll be looking for a place to live herself in the next six months. The lawyer at the bank contacted me, hoping I would have some influence, but I fear I have none anymore. Mom just gets mad when anyone says my sister's family needs to get jobs and move out instead of mooching off her.

Now my sister is trying to get her to cancel the trust fund, sell her remaining stocks, put everything in a checking account, and get a reverse mortgage on her house. I have power of attorney over her healthcare and my oldest sister is the executor of her will. We don't know what to do short of having Mom brought in for a sanity hearing, and if we did, she'd certainly never speak to any of us again. She has many medical issues and will most likely need some type of assisted care in the near future.

Any advice you can give before Mom is homeless and penniless and the rest of us lose what's left of our inheritance would be most appreciated.

I understand your frustration and resentment toward your sister and what she's doing, but you'll have to let go of that for a while in order to take care of this most effectively. This needs to be dealt with as a strictly financial matter.

You need to focus on the central issue -- making sure there are adequate funds for your mother for the rest of her life -- and try not to be too distracted by the lifestyle choices of your sister's family and whether or not her adult children are living in your mother's house, even though these things are part of the problem. First and foremost, set up a family meeting as soon as possible to discuss your mother's finances. The bank lawyer's alarming phone call to you should be reason enough for the family to gather together for this.

You say that you have two other siblings. It's time to get them involved. Given the stakes, they should come to the meeting or at the very least be on a speaker phone. I'd also suggest that you involve a professional mediator or financial planner -- someone who is objective and can be viewed as an authority.

Prepare for the meeting. Contact an elder law attorney, or your local office of elder affairs or council on aging, for advice. At the same time, step over whatever sleeping bodies you have to in order to keep tabs on your mom and urge her not to sign any documents until you all have met to discuss her finances. Make sure she knows that this is for her, not against your sister.

At the meeting, you need to show your sister and mother on paper how dire your mom's finances are. Is your mom oblivious to her financial situation or in denial about it? Present the evidence. Run out the numbers to show her and your sister that she is only months away from having zero cash flow.

Tell them what the lawyer said -- or better yet, ask him to draft a letter, and bring any other documents related to her trust fund and living allowance that you can get from the bank to substantiate your claims.

Stay away from accusations about what brought on this mess -- that will only turn this into a personal family feud that won't settle anything and could prompt your mom to do something fast and irrational.

Go over possible scenarios for six months or a year from now if things don't change immediately. For example, if Mom loses her house (which is a real possibility), she'll have to go on Medicaid and may have little choice of a care facility.

Solidarity is important here. Assuming that you and your other siblings agree, you should make it clear that you're all against a reverse mortgage or liquidating funds. Explain to your mother and sister why.

You'll need to have a plan in mind for preventing any further monetary drain. Why not hire a financial planner to manage your mom's money? That way she won't feel like she needs to choose one child over another. Or work on coming up with another plan that involves a neutral person or a couple of siblings managing her finances, so that no one gets full control.

After presenting all the information, it will probably be clear to the majority of you that there are too many people in the house for your mother to partially support. If you're open to it, you and your other siblings can offer to help your sister's children get their lives on track so that they can either move on or help pay some of the household expenses.

You mention the possibility of a sanity hearing. Do you have serious reason to believe your mother is unbalanced? Or are you suggesting that because she won't seem to listen to reason?

There are many reasons why she might be acting against what you believe is in her best financial interests. Perhaps your sister and her family make your mom feel needed. She no doubt misses your dad, and this fills a hole, however dysfunctional it may seem to you. It's also full-time company for her -- something sorely lacking in the lives of many elderly people.

A parent's sense of responsibility to her children doesn't end when they grow up. Your mother may feel obligated to help your sister, and guilty or responsible for how her life has turned out. That may be why she defends your sister against accusations that she's taking advantage of her. She may not want to stir up trouble with any of her children before she dies.

If you really do suspect that your mother is incompetent to make decisions for herself, or has dementia or some other neurological disorder that's causing her to make bad decisions, take her to the doctor and get her checked out pronto.

Hopefully, when your sister is faced with the evidence and a united sibling front against running through your mom's funds, she'll either accept that her family needs to start contributing in order to stay with your mom or she'll choose to move on. But if your mother is intellectually capable and still insists on continuing on the path to financial ruin, there's not much else you can do about it.