In recent years it has become much more common for many families and Greensboro, North Carolina to find themselves in a multi-generational household. Whether it’s because of financial reasons, healthcare concerns, or other causes, many adult children are living with their elderly parents. If you are in such a situation, there are a number of estate planning concerns you will want to consider.
Inheriting the home.
One of the most common estate planning situations were adult children live with their parents is where a parent has suffered a health problem and needs ongoing assistance. If an adult child chooses to move in with that parent, that can often be beneficial for both the parent and the child. The child can provide the parent with assistance while the parent can remain in the home he or she loves so much.
However, the situation can give rise to some inheritance problems. For example, if there are other children of the parent and the parent chooses to leave the home to all of the children as an inheritance, it might cause problems for the child living in the home. As equal inheritors of the property, the other children might choose to sell the property. For the child who has been living in the home, this effectively means that he or she will no longer have a place to live and will have to find somewhere else.
Let’s say a child has been living in the parent’s home and, after the parent dies, continues to do so. Once a parent dies, his or her property will have to be redistributed to new owners, but only after passing through the requisite probate process. Assuming the parent hasn’t created an estate planning tools such as a living trust, the probate process can take months or longer.
During that time, the adult child will likely have to pay rent even if that child had already been living in the home. Once the home becomes part of the probate estate, it will be up to the personal representative to manage all estate property. As an estate asset, the representative will have the responsibility to ensure that the home is properly managed. This includes collecting rent even if the adult child had never paid rent while living in the home while the parents to live.
Of course, many of the common estate planning problems that arise in these situations can be easily dealt with if the parent acts ahead of time. Whether the parent chooses to create a revocable living trust or other estate planning device, it’s best to create a plan and be clear about what he or she wants to happen.
If you are an aging parent or are a child of such parent, you can attend one of our next free Medicaid or living trust seminars to learn a lot more information that can help you create a better estate plan. Visit our Seminars page for details and registration information.