How to Get Your Adult Kid Out of the House

Jill Schlesinger coaches a woman on a delicate subject: telling an adult child it's time to move out.

CBS MoneyWatch Jill Schlesinger (Editor At Large): You seem very comfortable. You seem all relaxed. Female: We just came from a party. Jill: Will you spend 30 seconds with me, “no.” Busy, no one wants free financial advice. You want to know about the topic. Its an easy topic. Female: What’s the topic? Jill: Money. Female: Oh. Jill: Do you like that? I’m Jill. Last year was Broadway’s biggest season ever with over 12 million tickets sold. Let’s see if one of those theatre lovers needs some financial advice. What are you going to see today? Female: We’ll go see West Side Story. Jill: So you’re seeing the whole soundtrack. What question could I possibly answer and I mean anything. It could be your investments, taxes, life insurance, education funding, what’s on your mind, what can I help you out with. Female: Let me think now I’m just going to think now. I’m retired. Jill: I love that job, I inspire to have that job. Fabulous. Female: Okay we own 2 homes, we own a home in New Jersey and – right now our son lives in the home and we really do want to sell it and we don’t know what to do with him. He’s getting married. Jill: Oh okay. Female: And they’re going to relocate eventually and the hold up is kind of him. We almost have a buyer for the house as well but you know he’s family. I mean. Jill: He is your son. Okay so when I used to have clients like this what we would try to do is we would give the child a little bit of a heads up so normally if you were your tenant you would say hey, I’m giving you 1 month notice and you’re out of here. We’re going to vacate the property and you’re out on your tushy good luck. Now its your son so you don’t want to do that but what is reasonable to say when he’s going to get married? Female: September. Jill: So I think what might be reasonable to say is this. You know what honey its been great, we’re having a good time but mom and dad actually had to take care of ourselves and our financial future and the good news for you, you say to your son is that if we take care of ourselves you won’t have to take care of us in the future, right and so we’re going to give him a little bit of a heads up and you’re going to say to him you know when you get married part of this process should be, I need you to go find another place. Go rent, if you’re not ready to buy its okay but mom and dad need to sell their house. They need that money so that they can really secure their financial future. Now does that seem that something you could say. Female: Clearly absolutely. Jill: Now when you get that big pile of money very big hopefully, what are you going to do with it? Female: Pay off some of the mortgage of the house down the shore. Jill: And you’re going to live full time down the shore? Female: Yes we were down there now. Jill: What’s the mortgage rate on that house? Female: Oh I don’t remember. Jill: 6 ish? Female: Lower. Jill: 5ish maybe you don’t have to pay it all off. Female: Yeah. Jill: I mean that’s one thing to consider. You know why I don’t always say to pay off the whole loan because if you need money for some reason you can’t go and refinance it 5 years from now if rates are much higher so what you should do is sort of look at what your whole situation is. You look at like how much money do we have that’s liquid and what’s none liquid and if you don’t have enough money that’s really readily accessible don’t pay off that home mortgage so keep that in mind. Now I got more question for you did you get a long term care insurance. Female: Long term care insurance, no, Jill: Nursing home ish kind of thing. Maybe you should investigate that. That’s— Listen I got my mother for his 60th birthday gorgeous long term care policy so its something to consider. Female: Yeah. Jill: The reason why is this. Let’s say I’m 50 something okay so the deal is that once you turn 60 the likelihood that you get sick and need to spend some of your money increases dramatically right but if you buy the insurance now you might be able to get it at a cheaper rate because you got already sick and you’re healthier so by the time you really need it you probably can’t qualify for it so investigate. Go to a, do you have an insurance guy. Female: Yes. Jill: Everyone has an insurance guy. So go to the insurance guy and make sure you have that and do you have your wills and your trust and everything. Female: Yes those are all done. Jill: You got a gold star. Female: Okay thanks. Jill: Way to go. Excellent!