When a daughter travels great distances to assure her mother is well or son visits so often with father that each of them figure it might be easier if they simply joined households, it might be time to begin to question whether a joint living arrangement might make sense for everyone. Multigenerational living is likely to become even more common as people live longer. Shared households can bring the added benefit of convenience – why, after all, should a nurse daughter travel 20 miles to take a parent’s blood pressure – and sometimes additional financial security. Two households can share expenses including mortgage, property taxes, utilities, and so on.
Whether this works in the individual case can be answered with the usual response. “It depends.” A successful arrangement can depend on the level of flexibility that the generations have in dealing with each other and the specifics of the individual living arrangement.
It begins with an idea, leads to an overall understanding and depends on reasonable expectations. One area where a joint living arrangement can be derailed is in misunderstood expectations on both sides. This is where it can help to have a writing that describes what is anticipated. Even though you are dealing with family, an elder law attorney experienced in drafting and assisting in implementing Family Agreements can be of assistance. Joint living arrangements deal with finances, estate planning, and personal experience and convictions. What works for one family may not for another. Here are some successful examples our office has dealt with.
Parents and Adult Children Buying a House Together. Parents have been living in their house for most of their adult lives but the home either would need major modifications for handicapped accessibility or is located too far away from their nearest adult child to allow for regular visits. Adult child and family are open to the idea of purchasing a home together. Parents sell their home. Adult child and spouse sell their home. Together they buy a much larger house with more modern conveniences and handicapped accessibility or able to be made handicapped accessible without too much difficulty and expense. Parents might contribute the downpayment. Adult child’s family also contributes to the settlement costs and/or some of the downpayment and, because adult child has a regular income from employment, he or she and spouse make the monthly payments on the mortgage. Elder law attorney can draft the Family Agreement, work with the Realtor and attend the settlement. House would be titled in joint names – one-half owned by father and mother, one-half owned by adult child and spouse. Titling is tricky. Each half would be tenants by the entireties as between the spouses but joint tenants with right of survivorship as to the whole.
Parent Moves In With Adult Child. Parent who is a widow or widower comes to live with son or daughter and his/her family. Parent makes monthly payments which are described as “contribution to household expenses” which is actually true. It is expensive to run a household. Just try adding your costs for electric, water, telephone/television, groceries, minor repairs, major repairs, property taxes, mortgage and so on. Again there should be a written agreement to describe all of this. Informal unwritten understandings might run into difficulty with Medicaid rules regarding “gifting.”
When a parent moves in with an adult child’s family, often modifications need to be made to the house whether it is adding a new bath or even an “in-law suite.” There can be zoning and building regulations that need to be considered. Who should pay for what. If a parent pays for modifications, there should be a written agreement to avoid the possibility it might be considered a “gift.” If you deal with an elder law attorney who has also had real estate experience all of this can be considered together.
Adult Child Moves In With Parent. One plan that has been very successful for several clients has been a “buy in” with an adult child obtaining a home equity line of credit to purchase an interest as joint tenant with right of survivorship. The house can be inherited by paying one-half of the value and there is protection dealing with the Medicaid rules.
None of these strategies should be attempted without professional advice but individual custom arrangements can be crafted for the individual family.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.