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Financial Options As More Families Care For Seniors

Financial Options As More Families Care For Seniors

Multigenerational living is on the increase in the United States. Pew Research Center reports that 20% of the U.S.

December 7th, 2020

Multigenerational living is on the increase in the United States. Pew Research Center reports that 20% of the U.S. population now lives with multiple generations under one roof (that’s 1 out of every 5 families). Often, this is done to control costs and save money for all parties involved. Sometimes it is done by necessity: a family member may lose a job and need a place to stay, or an elderly family member may need assistance as he or she ages. But it also makes sense for several generations of a family to live and work together for their mutual wealth-building, even combining income and assets.

There are things to consider as family members age or when younger members move in, such as joint ownership of property, mortgages, taxes, medical benefits, survivorship through trusts, and estate planning in Los Angeles.

Typically the family makes changes in order to help the senior members. Many people in the middle-aged generation consider selling their own home, selling their parents’ home, and combining the gains into buying a new home suitable for both generations to live in. Alternately, remodeling one of the homes extensively from the sale proceeds of the other may be an option.

And in the age of pandemic lockdowns and the sudden loss of income, younger generations may be forced to move back home. The idea is growing that all three generations could live in one household and combine strengths. It’s a circling of the wagons against economic uncertainty, and it proves beneficial. Younger generations can use their earnings to pay down the mortgage, or actually live without a mortgage, in a property that will be their inheritance.

Questions and Answers

Combining households, incomes and portfolios obviously takes professional advice and assistance. Estate planning for a senior is always a valuable thing, and multigenerational living now expands the reach. And with family acting in unpaid or even paid capacities, there will be multiple questions to be answered on how best to work each situation. Questions like: if income from the younger ones is contributing to the senior’s financial picture, can Medicaid be obtained in a medical crisis?

Plenty of families and seniors are now dealing with the choice to age in place. This often takes extensive remodeling – grab bars, walk-in tubs, wider doors, stair elevators and such. What are the tax and income implications if the younger generation living in the home does some or all of this work and is paid for it? How about adding an accessory dwelling unit in the back yard? As the family unit grows, opportunities may increase for unpaid services to become paid services within the family.

When the older children of seniors become caregivers for the parents, what are the tax implications? Could the senior pay for this service? TIP: It can be done but it must be done correctly. There are certainly tangibles which might be deducted from someone’s taxes, items such as the numerous electronic and online assists for seniors nowadays -medication reminders, nurse reports, maybe a life alert system in case of a fall (research the best medical alert systems before investing in one).

All of this activity inthe senior’s life is ultimately good. It’s part of the senior network that all seniors should have to stay alert through their aging years. And if they want a less bustling life than the youngsters, a bit more remodeling can create portable partitioning for all purposes in the multigenerational family home.

Ownership and Inheritance

With multiple generations increasingly living in the same property, joint ownership of property is becoming more popular. Joint ownership is what happens when a husband and wife buy a home together -automatically they both share ownership of the property. This arrangement creates a right of survivorship, which means that if one party dies, the deceased party’s ownership dissolves and the survivor’s full ownership remains. This isn’t automatic for unmarried couples or for family members and must be created through legal steps. A property can be mortgaged with multiple persons as borrowers, but title work alone is not enough to secure ownership and inheritance. For this, at the very least a will is necessary, or even better, a trust. It is important that you fully understand the Michigan inheritance and estate tax laws, or laws in your particular state, so nobody gets surprised should the worst happen.

A family can investigate establishing survivorship through a trust to include other family members in their inheritance. Seniors will already be familiar with the living will that assures compliance with their wishes for medical scenarios. A living trustgoes beyond instructions and allocates ownership of assets. This trust is revocable, which means the senior as benefactor can change its terms and control its assets until death, at which ownership transfers to designated beneficiaries. But since the benefactor still owns the assets, tax liabilities may be a burden and such assistance in old age as Medicaid may disappear.

To minimize holdings, an irrevocable trust is sometimes used to give away your assets before you die. This option is often used when there is a surplus of wealth; by using an irrevocable trust, the family member and the beneficiary avoid paying estate taxes on the property. An irrevocable trust can almost never change its terms, so it’s a serious choice.Either option can have significant benefits for an elderly family member and those who take care of them in their senior years.

As family members gather closer and even live on the same property, combining incomes and assets makes great sense – unless it doesn’t. There are taxes and medical benefits to consider, as well as survivorship. With innumerable decisions to be made, professional help is crucial – and nothing in this article can be construed as advice. Seek out professional advice from estate planners, accountants, and elder law attorneys.



Northern girl Laura is the epitome of a true entrepreneur. Laura’s spirit for adventure and passion for people blaze through House of Coco. She founded House of Coco in 2014 and has grown it in to an internationally recognised brand whilst having a lot of fun along the way. Travel is in her DNA and she is a true visionary and a global citizen.