My dad died last year and left my mother with around $150k USD in life insurance payouts. 5 years earlier, my parents bought their first house for $175k USD on a 30yr mortgage. (They refinanced about 6months before dad died to a 20yr mortgage and just under 2.5% interest rate.)
Right now there's about $150k left on the mortgage and my mom wants to use the life insurance money to pay off the house. I'm hesitant to back her decision bc my parents were (are?) on a payment plan with the IRS for around $35k in back taxes/fines and my mom hasn't been forthcoming with info on their credit card debit. Everything was joint/in both their names/the cosigned everything, so there's no way for her to get out of repayment.
I'm worried that the IRS will put a lein on the house, or outright take it if it's paid off and something happens to my mother. She's entitled to one of my dad's pensions next year and there's a second pension she can start drawing from when she's 63, but right now she's working full-time as an "essential" worker making $10/hour. She can't pay the utilities and the mortgage on that wage, so she's trying to eliminate the mortgage. I'm not confident on her retirement plans or savings and I won't be in a position to help her financially for several more years/at least a decade.
What other things should she be considering? I keep telling her to consult a financial planner but she refuses to make an appt bc "she knows what she's doing". I just don't want her to lose the house and the insurance money bc she made a poor financial decision due to fear.
Submitted December 08, 2021 at 12:34AM by Re-ink_the_pen https://ift.tt/3GqvxDM
