Colliton

Parents sell their home. Adult child and spouse sell their home. Together they buy a much larger house with more modern conveniences and handicapped accessibility or able to be made handicapped accessible without too much difficulty and expense. Parents might contribute the down payment. Adult child’s family also contributes to the settlement costs and/or some of the down payment and, because adult child has a regular income from employment, he or she and spouse make the monthly payments on the mortgage.

An elder law attorney can draft the family agreement, work with the Realtor and attend the settlement. House can be titled in joint names — one-half owned by father and mother, one-half owned by adult child and spouse. Titling is tricky. Each half would be tenants by the entireties as between the spouses but joint tenants with right of survivorship as to the whole. The agreement if properly drafted, also takes care of Medicaid concerns later.

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 are described as “contribution to household expenses” (not rent) which is actually true. It is expensive to run a household which include costs for electric, water, telephone/television, groceries, repairs, property taxes, mortgage and so on. Again there should be a written agreement to describe all of this. Informal unwritten understandings might run into difficulty with Medicaid rules regarding “gifting.”

When a parent moves in with an adult child’s family, often modifications need to be made to the house whether it is adding a new bath or even an “in-law suite.” Zoning and building regulations 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.”

Adult Child Moves In With Parent. One plan that has been very successful for several clients has been a “buy in” with an adult child obtaining a home equity line of credit to purchase an interest as joint tenant with right of survivorship. The house can be inherited by paying one-half of the value and there is protection dealing with the Medicaid rules. We call it “whole house for the price of half a house.”

None of these strategies should be attempted without professional advice, but individual custom arrangements can be crafted for the family.

Janet Colliton, Esq. is a Certified Elder Law Attorney. Her practice, Colliton Elder Law Associates, PC is limited to elder law, life care, special needs and estate planning and estate administration, and guardianship with offices at 790 East Market St., Suite 250, West Chester, PA 19382, 610-436-6674, colliton@collitonlaw. com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, co-founder of Life Transition Services, LLC, a service for families with long term care needs. Tune in to radio station WCHE 1520 at 4 p.m. on Wednesdays for “A Plan Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Ron Ehman, Next Home Signature.