In times of crisis such as what we are experiencing now with Covid-19 when families are concerned regarding the safety of parents and adult children, they may want to combine family units. It seems more of us are moving to be together. Plans to move, long postponed, are given new life. I see it with clients in my own practice and would not be surprised to find a trend overall.
While some parents might move to a senior community, it also happens that Mom or Dad might move in with son or daughter’s family or for son or daughter and family to move in with Mom. It is not just parents and children. The move could be to be closer to a brother or sister or long term friend. The move could be local but, in my experience it often is to other States as well. Parents who previously moved to Florida to retire, for example, now, with Florida experiencing severe COVID-19 outbreaks, might return to Pennsylvania, a trend that existed even before the current crisis.
If family members are anxious about each other sometimes it seems it might be easier if they simply joined households. This is not just due to COVID-19. Multigenerational living is likely to become even more common as people live longer. Shared households can bring the added benefit of convenience avoiding long trips to determine whether parents are well. They can also sometimes provide additional financial security with shared expenses.
What is critical to a making a shared living arrangement work is a meeting of the minds concerning important issues. Who pays for what, what is the back-up plan if the arrangement does not work, what is done to preserve the older person’s independence, how does this arrangement relate to the overall estate plan, how does it relate to asset protection, and how does a parent prevent funds given to a child from being considered as “gifting” that could potentially prevent the parent from qualifying for government Medicaid benefits if needed at a later date.
One area where joint living arrangements can be derailed is misunderstood expectations on both sides. This is where it helps 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 critical assistance at this time. Joint living arrangements require consideration of 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.
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 should be described as “contribution to household expenses” (not rent). It is expensive to run a household. Consider costs for electric, water, telephone/television, groceries, minor repairs, major repairs, property taxes, mortgage and so on. There should be a written agreement to describe all of this. Informal unwritten understandings might run into difficulty with Medicaid rules regarding “gifting” or later misunderstandings.
In this case modifications might also need to be made to the house whether it is adding a new bath or even an “in-law suite.” There could 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.
Parents and Adult Children Buying a House Together. Suppose both parents and adult children sell their homes and buy a home together. There is a way to arrange titling of the property so that they are both “covered” if a parent later moves to long term care. An elder law attorney with real estate experience can draft the family agreement, and work with the Realtor and mortgage lender to accomplish this goal.
Adult Child Moves In With Parent. An adult child who moves in with her parent could buy an interest in the home. Again there should be a family agreement.
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.