Submitted by SgtPeter1 t3_z7xw45 in personalfinance
My aunt, who is in their 80’s, is worried about running out of money, so she asked us to pay the maintenance fee for their apartment in NYC. In return we would receive the apartment free and clear when they passed away. Seemed simple enough at first and a good investment.
However, my aunt said in passing that with our help she would have enough money for 6 years. If she reached that point she would be broke except for the apartment which she would have to sell with no regard to our arrangement or our investment. Needless to say the deal fell apart at that point.
Now she’s back and asking us to reconsider. She has offered to put the property into a irrevocable trust, to insure that it transfers to us when she passes.
Is this a good financial decision for us? The property is in New York City, it’s in a co-op building and we think it is worth about $400,000. It’s not in good condition, I’ve never even seen it but I believe it’s very dated and in disrepair. The building’s maintenance fee we would be paying is about $1,600 a month. We can afford to pay that but it will really impact our family’s finances at home.
What if she lives more than 6 years, goes broke and there’s no option to cover her living expenses but to sell the property. Could we be stuck paying all of her living expenses?
Is an irrevocable trust the right way to handle something like this? We live almost 1500 miles away and are not familiar with New York real estate laws.
TLDR: Aunt said we could have her apartment in NYC if we pay the maintenance fee until she dies. But is it a good idea?
Edit: Thank you all for the advice! My wife and I are flying out to NYC to meet with her in a few days to discuss this. There are some very good points here!