When you’re creating a multigenerational household, you focus so much on finding the right neighborhood and home and determining the renovations that will make aging in place safe for your loved ones.
What often gets overlooked are financial and estate planning considerations.
After all, just divvying up routine expenses like groceries, dinners out, home repairs, insurance, and utilities can be challenging and may entail uncomfortable conversations.
A column by Ilyce Glink https://www.washingtonpost.com/business/2021/07/12/family-living-multigenerational-household-seeks-advice-about-finances-ownership/ highlights some of the significant financial questions and issues, including taxes, inheritance, and ownership, that you may want to address before you start shopping for a property.
For example, if you and your parents are both contributing to a home purchase, is the money your parents put up a gift, a loan, or an early inheritance? If your parent dies, will you then own the house? If not, how do you divide your parent’s portion of the property among other heirs? What are all the potential tax implications?
What happens if you’re caring for a stepparent with children from an earlier marriage? What’s their stake in the property? Where does the house figure in if you and your spouse decide to divorce?
Given that each family’s situation and finances are unique, it’s wise to talk with an estate attorney to fully understand and address the legal considerations before establishing your multigenerational household.
Your SRES® has access to a wonderful network to talk about your family's generational finances. Find your SRES® here.