Jewish World Review Feb. 29, 2000 / 23 Adar I, 5760
Paying for nursing-home care
DEAR BRUCE: We would like to know the best way to invest our uncle's money so that we can get a monthly check to offset the cost of his nursing-home care. We would also like to know if there is some way that we can protect his money so that it is not all spent in the nursing home. -- H.S. (e-mail)
DEAR H.S.: The answer to your second question first: Since he is currently in the nursing home, I know of no way to protect his money. Had he anticipated this several years ago, I would have a different answer for you, but that has evaporated with time.
As to the best way to invest his money, you will have to determine how much risk you are willing to take with your uncle's money. There are any number of income funds with which you can get a check on a regular basis -- if not monthly, certainly quarterly. You might check with a broker and see what they would advise, and make your own decisions about no-load funds.
You failed to mention how much money is involved, and obviously the amount of money and the need for income are parallel. Without that information it is very difficult to proceed further.
DEAR BRUCE: Several years ago a friend came to me and wished to borrow $25,000 as an investment in his real-estate projects. I took out a $25,000 second mortgage, and he gave me an unsecured note.
He has a lot of problems and can't make the payments, so I am making the payments on the second mortgage that I used to provide the money to him.
My house is worth about $93,000, but I owe $110,000, counting the second mortgage. I have already told him that all he has to do is to come up with the money and I will forgo any profit.
If he goes bankrupt, am I out completely? What would you do? -- J.V., Lancaster, Calif.
DEAR J.V.: The hard facts are that if he goes bankrupt, you are out of luck. You will be just another unsecured creditor and the likelihood is that you will get nothing, leaving the second mortgage to be paid.
While I am sure your friend had good intentions, if you will recall, good intentions and the road to hell are somehow related. The overwhelming likelihood is that you will get stuck for all or the better part of this
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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