A Pew Research Center analysis of census data found that in 2016, 20% of the U.S. population was living in multi-generational homes. That’s a record number and one that is expected to keep rising. In the article titled “How to Address Multigenerational Estate Planning Issues,” Financial Advisor Magazine asks what’s behind the numbers?
For some families, it’s college students moving back with mom and dad while they pay off student loans or newly married couples living with one set of parents while they save money to purchase a home of their own. New parents are recruiting their own parents to combine households, so child care and a stronger sense of family is created. In other families, having elderly parents move into their children’s home helps the seniors with aging issues.
In many instances, families add separate living quarters to their existing homes. States are addressing zoning issues that prohibited this kind of construction in the past.
Pressures created by rising housing costs, housing shortages and demographics have all contributed to this new trend. How to navigate this kind of family “merger” requires a lot of planning, including estate planning. How will the property pass to the next generation? What about siblings who are not involved in the shared housing space? How should their portion of the inheritance be handled?
There are many ways to navigate the closer relationship with aging parents or childcare needs. Some elect to purchase a nearby condo where parents are living, so at some point the parents can move from their single-family home to an apartment. For others, the parents move to an apartment within the home, so their children and grandchildren can enjoy the larger living space.
Whichever way your family choses to set up your residences, take the time to meet with an estate planning attorney who can help you work through the best way to set up the arrangement, including how property is titled and passes to the next generation, as well as making sure the estate documents like wills, trusts, power of attorney and health care directives are all completed.
Resource: Financial Advisor Magazine (July 31, 2018) “How to Address Multigenerational Estate Planning Issues”