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While you cannot be sure this will happen...it could happen...and with how health care and life expectancy is in the US...its likely. The money he is sending is not going to be protected the way it would be in a 401k, 403b or IRA. These accounts are where his retirement money should go.
Angel
On the other hand . . . if she is in her 50s, great health and a spender - I'd suggest it is time to find an affordable living arrangement for her. By the time she passes, she may have used the entire value of the house for her car. And a ledger won't help at all.
If Mom cannot pay the mortgage on the house, then she also won't be able to pay for caregivers to help her when that time comes. Nor pay for a health facility to help her with her care.
Now this is the biggee, as mentioned above... Medicaid will place a lien on her house, they don't care who was paying the mortgage or even if there was a mortgage on the house. Medicaid will want whatever equity is in that house to help cover for the cost of taking care of your fiance's mother.
I always believed if an elder is having problems paying for the upkeep on the house, paying the rent/mortgage and property taxes, etc. then it is time to downsize to something more manageable.
MIL is living beyond her means, and it WILL affect your financial future. You and your fiance need to have a serious talk about finances -- BEFORE September! Unless he has a fantastic salary way into 6 digits, giving away $7000/year may be more than the family finances can take. Add to that her inquiry about who she will live with all I see is red flags.
What if the daughter takes her in? She will clearly want some of that house value.
My parents lived into their mid-to-late 90's in their own home alone, so will your finance still be paying for the next 20 years?
One thing no one has mentioned is that YOU will be the obvious choice to be her full time caregiver when the need arises. I think you need to sit down and have a frank discussion with him about all of this.
A good example -- this week my mother said she was going to sell the house that is left to me in the will. She said she gets so mad at me that she didn't think it was a bad thing to do. The trouble is that she gets mad at me because of things in her own mind. You can't really depend on inheritance as a retirement plan, because things happen that you can't control. He needs a legal way to protect his investment if he is considering it as part of his/your retirement plan.
I think he is telling me this to make me feel better about him not investing in retirement.
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