Bill is diagnosed with cancer. At first, he is optimistic, but he becomes bitter and frustrated when the treatments don’t work and his condition declines. He often finds fault with Joan’s attempts to keep his spirits up and tells her that because she is much younger, she can’t understand his feelings about his impending death. One day, he becomes angry because Joan laughs while they are watching a movie together. As his condition continues to decline, Bill raises the idea of Joan administering a fatal overdose of morphine if his pain becomes intolerable. Joan hesitates but agrees to talk with Bill’s doctor. Bill’s doctor, who is a longtime friend, prescribes a specific sedative that could potentially be used to administer a fatal overdose but implies that he suspects Joan is the one who came up with the idea.

Joan is prepared to administer the drugs if necessary, but Bill dies peacefully at home a short time later.

Theo calls Nelson (Bill’s lawyer) to tell him that Bill is dead. Theo has been badgering Nelson for months, trying to determine what he will inherit after his father dies. Nelson thinks back to a conversation where he and Bill reviewed Bill’s will. Most of his money is divided into four parts, to be inherited by Theo, Juliet, Jamie, and Lee. However, Bill has significantly less money than most people would expect: He had overspent and made some bad investments. Joan will inherit the house and enough money to live off of, although she will have to live more modestly.

The night after Bill’s funeral, Nelson hands out copies of Bill’s will to the assembled family members. Later, Nelson runs into Theo at the bar of the hotel where he is staying. Theo is drunk and emotional; he expresses his anger and grief that Bill left Falling House to Joan, and not to him. Later, in his room, Nelson is unsettled and unable to sleep. He tries to phone Joan, but no one picks up.

After the funeral, Joan returns home and puts the children to bed. Unable to sleep, 10-year-old Lee goes downstairs. She is standing alone in the kitchen when Theo suddenly enters through the side door off the kitchen. Theo has been drinking heavily and shows Lee a gun that he with him. He tells Lee about his frustration that Bill did not leave the house to him, but Lee is confused by this. To distract her, Theo gives Lee a gold coin. He cajoles her into coming outside with him and leads her to the groundskeeper’s cottage, located near the main house. There are cans of gasoline located outside, and Theo begins pouring them out. He tells Lee to go back to the house and scream.

Falling House burns down; the authorities determine the fire was arson. Lee has confused memories of seeing Theo the night of the fire but can’t clearly describe what happened, and Theo claims he was simply out for a walk and ran into Lee outside of the house by chance. Theo is not charged, as Joan is hesitant to pursue legal action. Theo is astonished to have gotten away with his crime; one year after the fire, he asks Nelson to recommend a therapist. Theo moves away to Maine, where he begins working as a ski instructor and lives a much more modest life. He eventually begins a stable long-term relationship and seems to achieve a kind of emotional maturity.

After the fire, Joan, Jamie, and Lee move into a townhouse near their private school. Joan leaves the money from the insurance payout sitting in the bank, unsure of her long-term plans. Joan tries to maintain ties with Juliet and Theo, but they avoid her. She also drifts away from Bill’s siblings, with the exception of Misty.

After Bill’s death, Joan begins to think more about visiting Taiwan, but her memories are ambivalent. She recalls how, as a child, she and her family lived in an apartment complex with a courtyard. Joan and her brothers often played in the courtyard, but Joan was also frightened of it because there were stories that a woman had been murdered in one of the apartments in the complex, and her body buried in the courtyard. A reddish-brown boulder marks the spot where her body was supposedly buried, and Joan came to think of this rock as the “demon stone.”

One day, when Joan was 11, she got sick at school and unexpectedly came home in the middle of the day. She found her father at home with a woman, and they were embarrassed to see her. Later, when Joan’s mother questioned her, she admitted to having seen a strange woman in the apartment with her father. Joan’s mother began treating her more kindly. A short time later, Joan began seeing Joseph, a man who also lived in the apartment complex, arriving in their home to visit her mother. When Joan’s father questions her about any strange men in the apartment, Joan lies and says she has seen no one. One day, Joseph approaches Joan and caresses her. Joan’s mother walks in and witnesses this event. Later, Joan’s mother falsely accuses her daughter of stealing a decorative tray and then viciously beats Joan.

Joan does her best to avoid Joseph; after some time, he stops visiting her mother in their apartment. Joan’s mother continues to be cruel toward her daughter. Eventually, Joseph moves out of the apartment complex, and no one knows where he has gone. Whenever Joan thinks about the possibility of visiting Taiwan, she thinks back to these memories, which she has associated with the boulder in the courtyard.

In the present day, Jamie graduates from high school and begins attending the University of Pennsylvania. When Lee is 17, she begins a relationship with a teacher at her high school, who is named Charlie Brooks. When Lee and Charlie are caught having sex at the high school, Lee is suspended and Joan is summoned to pick up her daughter. On the drive home, Lee confides that she fears Joan’s death because she has already lost her father. Joan responds coldly and drops Lee off at home before going shopping alone. Lee telephones Misty (her biological mother) to tell her what happened and ask for advice. Misty urges Lee to listen to Joan and do whatever she is told. When Joan returns home, she tells Lee that she will always help her and support her. Joan feels guilty that she has not been transparent enough with her children.

Lee goes to college and eventually works at an accounting firm. She has a long string of unsatisfying romantic relationships with older men (Joan disapproves of this pattern). After briefly working for a clothing brand, Lee loses her job and goes through a break-up at the same time; these events prompt her to move back in with Joan. Around this time, Joan has begun working with a builder and an interior designer to consider rebuilding Falling House. She feels ambivalent about starting this new project. Meanwhile, after a stint working in finance after college, Jamie shocks his mother and sister by joining the US Navy.

Since Lee is having a hard time finding a new job, she decides to visit Japan and Joan opts to come with her. Joan enjoys the trip, although Lee is sometimes embarrassed by her mother. One evening, Joan and Lee visit a hotel bar; Lee wanders off to socialize with a group of young American tourists. Sitting alone, Joan strikes up a conversation with the beautiful young Japanese woman sitting next to her; she doesn’t know that Tomoko works as a hostess at a bar where she entertains businessmen. Tomoko is flattered by Joan’s warmth and reciprocates by asking Joan many questions about her life. Later, after Tomoko has left, Lee and some of her new friends explain that Tomoko works as a hostess. Joan is surprised and intrigued to learn that places exist where individuals can come for conversation and companionship.