Source: Forbes.com

Even before the recession, the percentage of Seniors 75 and older living in their children's homes was rising - from 4.1% in 1990 to 6.5% in 2008. Now, facing shrunken assets as well as longer life spans, more seniors will be moving in with their kids. And the moving vans are going in the other direction too, as children move back in with their parents in the wake or job loss, home loss or divorce.

1.  Plan and Design Ahead

If you're renovating your home, consider adding senior-friendly improvements, such as a wheelchair-accessible bathroom on the main floor.

Your parents may be spry now, but what about the future?

  1. A 65-year-old woman has a 1 in 7 chance of living to 95.

  1. A 65-year-old man has a 1 in 14 chance.

  1. Not surprisingly, women are twice as likely as men to live with their adult children.

  1. Using the latest “universal design” concepts, you can make your home more accessible without hurting its resale value.

2.  Research Local Zoning Laws

Except in housing developments designed for those 55 and up, local laws can't forbid family members of different generations from living together. But zoning rules can bar second units, with their own entrances and kitchens, in single-family neighborhoods. That's often a problem, since, in most cases, each adult generation wants privacy and independence. You may have to apply for a variance. With the growing focus on affordable housing for seniors, there’s a good chance of getting one if neighbors don't object.

3.  Create a Quasi-Separate Space

If you can't get a variance or don't want to undertake a major renovation, look for simple, less-expensive ways to create a sense of privacy and independence for Mom. If the law bars a second kitchen, you may still be able to install a "mini-kitchen" with a bar sink, hot plate and microwave in her living area. Get around a ban on a second entrance by adding interior doors that don't lock, but do set off a separate space.

4.  Discuss Living Expectations

Carefully discuss what your expectations are for living together and integrating/separating your personal lives .  How often will you eat together? Who will shop, set the menu and cook? Clean? Will your parent carry separate insurance for his/her belongings? Will the grandparent(s) help with childcare (Do they want to?)  How will other housing issues and costs be handled? Some happy families even put such details in writing.

5.  Avoid Joint Ownership

Adding an aging parent to the deed on a home - which many families do, especially if the parent pays for an addition or senior-friendly renovation - can backfire if she/he later needs extended nursing home care.

It is important to understand why joint ownership can create problems later on.

  1.   75%of those who spend a year of more in a nursing home end up having their bills paid by Medicaid.

  2.   After a Medicaid patient dies, the state can force her home to be sold to recoup what it paid for her care.

  3.   If a house is jointly owned, the state might put a lien on it and collect when the remaining owner moves or dies.

6.  Consider A Life Estate

Just because mom's name isn't on a deed doesn't mean she can't be protected.  One option to consider: she can buy a "life estate."

  1.   A life estate gives her the right to live in her child's home for the rest of her life, and the child can use the money she pays for renovations.

  2. This protects mom from eviction and her family from nursing home bills.

  3.   Once mom has lived in the house for a year, the money she paid for the life estate doesn't affect her eligibility for Medicaid, while other types of transfers to relatives often do.

7.  Use Family Loans

Another way to pay for making your home senior-friendly is to borrow money from mom for home improvements.

  1. Family loans carry lower interest rates than commercial loans, and there is no credit check.

  2.   You pay interest to mom and can deduct the interest if the money is used for a home improvement.

  3.   If mom doesn't need the income, she can give you (and your spouse) enough cash each year to make those payments. (You can give anyone up to $13,000 a year without have to worry about gift taxes.)

8.  Maximize Tax Breaks

When deciding who will pay for what, keep taxes in mind.

  1.   In order to deduct mortgage interest or real estate taxes, you must be legally obligated to pay these bills and actually do so. If mom's name isn't on the mortgage but she pays it, no one gets to claim the mortgage interest deduction.

  2.   Often it makes more sense for the younger generation to pay and deduct all mortgage interest and taxes, since the adult children are more likely in a higher tax bracket. Mom can then pay other bills, such as utilities and food.

9.  Review Mom's Estate Plan

Have a frank family discussion. If mom's name is put on the deed (and even if it isn't), her will may need an update.

  1. If mom moves in with a child and lends money for a renovation, will that debt be forgiven when she dies?

  2.   If a child moves in with mom and his name is added to the deed, how does that affect Mom's plans to divide assets evenly among her kids?

  3. Conversely, if a child living with mom has no ownership interest, what protection does his or her family have when mom dies?

10. Consider the Alternatives

Does having mom move in sound expensive, requiring renovations and perhaps, if she's ailing, a part-time aide?

Do your homework and research current costs.

  1. Home health aides cost an average of $18.50 an hour, according to Genworth Financial's 2010 Cost of Care Survey.

  2. An assisted living facility, including room, board and personal care, averages $33,903 a year (and costs are not usually covered by Medicare).

  3.   Families who care for aging parents at home can help them avoid, or at least delay, a prolonged and expensive nursing home stay.

Source: Forbes.com


Converting garages or other rooms of your home provides older adults with privacy and independence while living close to family. (Garage conversion:  before above, after below.)

Everyone involved should discuss living expectations and rules before deciding to move in and live together.

Before making major decisions about home modifications, finances, home ownership and other major investments do your homework.

A reputable Elder attorney or financial advisor can provide the information you need to make decisions that meet your individual family needs.

Find An Organizer for Family Meetings

Retained Life Estates

  1.   A retained life estate is a gift plan defined by federal tax law allowing the donation of a personal residence (including a vacation home or farm) with the donor retaining the right to life enjoyment.

  1.   A life estate may be retained for one or more lives or it may be retained for a term of years. All routine expenses - maintenance fees, property taxes, repairs, etc. - are the responsibility of the donor.

  1.   Life estates are commonly used in elder law asset protection planning.  

  1.   The gift of a house subject to a life estate is a popular asset protection planning technique because it is easy to understand and less invasive to lifestyle than other transfer techniques.

  1.   Get professional help when setting up life estates.

Genworth Financial Cost of Care Overview

  1.   Nearly 66% of people over age 65 will need long term care at home or through adult day health care, or care in an assisted living facility or nursing home.

  2.   40% of people currently receiving long term care services are ages 18 to 64.

    The 2010 Genworth Cost of Care Survey helps families evaluate options and cover the growing cost of long term care.  The most comprehensive study of its kind, Genworth's 2010 Cost of Care Survey, conducted by CareScout®, covers nearly 13,000 long term care providers. 

Keep taxes - and tax breaks - in mind and seek professional advice before making decisions about housing, living arrangements, finances and other major investments or life changes.

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