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Can Multi-Generational Living Arrangements Work for Families?

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Multigenerational living arrangements
Multigenerational living arrangements can be a gift for the entire family if careful planning is done.

Multi-generational living arrangements are not new, and as people are living longer it may start becoming more common. Shared households bring many benefits, including convenience. Why should a nurse daughter travel 20 miles a day to take her mom’s blood pressure, asks The Mercury’s article “Do shared living arrangements make sense?”

There’s also the benefit of increased financial security. Two households merged into one can share expenses, including mortgages, property taxes, utilities and more.

Whether this works in each case depends upon the situation and the relationships of the individuals involved. If there is flexibility and relationships are good, it can be a blessing. Imagine grandparents and grandchildren who are part of each other’s lives on a daily basis, rather than a twice-a-year visit. That’s a gift.

Multi-generational living arrangements need to start with a lot of discussions and good understanding of the wants and needs of each participant. It also needs to be based on reasonable expectations. A happy joint living arrangement can swiftly be derailed if parents assume that grandparents are willing to be 24/7 babysitters, or if grandparents consider household chores something for their children and grandchildren to do.

Joint living arrangements must also address financial considerations, estate planning, and everyone’s personal experiences and convictions. What works for one family may not work at all for another. Each family must work through their own details.

Here are some examples where a multi-generational living arrangement works.

Parents and children buy a house together. When parents and children live too far away, and the parent’s house would require too much modification for them to continue to live there, both sell their homes and buy a much bigger home that can be made handicapped accessible. The parents make most of the down payment. The house is titled in joint names. Titling is critical. One half is owned by the father and mother, the other half is owned by the spouse and adult child. Each half would be tenants by entireties (in states where that form of ownership between spouses is available) as between the spouses, but joint tenants with rights of survivorship as to the whole.

Parent moves in with adult child. A widow or widower comes to live with a son or daughter and their family. The parent makes contributions to the monthly expenses. A written agreement is very important for Medicaid rules regarding gifting. If modifications need to be made to the house—a mother-in-law suite, for example—a written agreement would detail who contributed what so that it is not considered a “gift” by Medicaid.

Adult child moves in with parent. This is a “buy-in,” where an adult child obtains 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.

None of these strategies should be done without the help of an elder law attorney who is knowledgeable about Medicaid, estate planning, tax planning, and real estate ownership. When it works, this multi-generational living arrangement can benefit everyone in the family.

Reference: The Mercury (AuG. 28, 2019) “Do shared living arrangements make sense?”

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