D AVE SAYS
D e a r D a v e ,
About a year ago, my husband and I offered an empty house we own to a young man at our church, who had lost his home and everything he owned in a fire. He has taken good care of the place, but has made no effort to pay rent. We don’t need the money, because we’re in good shape financially, and we were thinking about selling the other house, anyway. I’d like to simply write it off, and gift the home and title to this young man, but my husband feelsheowesussomethingfor putting a roof over his head all this time. What are your thoughts?
P e nn y
D e a r P e nn y , I think you and your husband have good hearts. I also think you handled this situation poorly.
From the sound of things, you put him there originally on a charity basis, and now your husband wants to change the deal. You didn’t set up any kind of rental agreement, but your husband feels you two are owed something? I’m sorry, but no. That’s on you.
At this point, you have some big decisions to make. Were you providing free housing to someone who was struggling, or were you providing a free house to someonewhowasstruggling? I understand this young man experienced a terrible tragedy. But at the same time, I’m not hearing lots of evidence that he’s putting his life back together. If after this long the guy’s not back on his feet and out on his own, you maybeenablingbadbehavior on his part.
Now, if you want to gift him the house, that’s your decision. If you want to approach him with a rental agreement or sale proposal to which all parties are amicable, that’s okay, too. If neither of these ideas are in the cards, I’d make sure to sit down with this young man and have a gentle—but firm—talk. I’d let him know I had been happy to help him over the last several months, but that he needs to start moving forward with his life. I’d set a very reasonable and patient timeline for a moveout date, and let him know once that time is up, I’ll be selling the house.
That’s fair to everyone concerned.
— D a v e D e a r D a v e ,
Mygirlfriend’sparentsare divorced, and they’re both in their early seventies. We talked the other night, and she’s thinking about buying them each life insurance policies. The only coverage her dad has is through his employer. Her mom has remarried, and she doesn’t have any life insurance at all. On top of this, her dad is worried he might have to pay hermom’sfuneralexpensesif she died, and he’s not in good enough shape financially to do that. Do you have any advice?
J o s hu a
D e a r J o s hu a ,
If the only life insurance her dad has is furnished through his employer, then he probably won’t have it anymore once he stops working. I suppose it’s fine if she wants to buy them each a small policy, but it’s liable to be pretty expensive at their age.
Now, she can do this, but I don’t think it would be a good long-term plan. I’d tell your girlfriend she needs to start saving money and building up her own wealth. If she had just $20,000 in savings, that’d be more than enough to bury two people. Please understand, I don’t mean to sound insensitive. We’re talking solely about the economics involved in this kind of situation.
The other thing your girlfriend should do is have a discussion with her mom to find out if the stepfather has the money to handle that kind of thing. When it comes right down to it, any final expenses for her mom would be his responsibility now—not her dad’s. She shouldhaveadiscussionwith her dad about preparing for things, too. But if her dad’s
Dave Ramsey is a seventime #1 national best-selling author, personal finance expert, and host of The Dave Ramsey Show, heard by more than 16 million listeners each week. He has appeared on Good Morning America, CBS This Morning, Today Show, Fox News, CNN, Fox Business, and many more. Since 1992, Dave has helped people regain control of their money, build wealth and enhance their lives. He also serves as CEO for Ramsey Solutions.
got insurance through work, and the stepdad is ready to pay for her mom’s burial, then they’re covered for the immediate future.
In short, I wouldn’t do it unless they absolutely don’t have this sort of thing covered. Even then, I’d prefer she just covered it with cash, because all we’re talking about is enough to cover burial costs. No matter what anyone else says, Joshua, a nice funeral doesn’t have to be crazy expensive.
— D a v e
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