Need help: How to buy a house with aging parent?

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privateID
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Need help: How to buy a house with aging parent?

Post by privateID »

I help my Mother-in-law (MIL) out with all her finances. Although she is generally still in good health, it's becoming more and more difficult for her to live on her own due to memory issues and some other things. So the family is thinking about some options and the best one so far is for her to move in with one of her children. Here are some of the details about the situation:

1) MIL is 87 years old, rents an apartment, lives on her own and is physically doing fine. She still drives a car for the immediate future, but need to plan for that to change. Her memory has been decreasing over the years and is currently an issue. She is doing fine financially and, as such, is in a high tax bracket due to income from annuities/SS/investments. She takes the standard deduction.

2) My Sister-in-law (SIL) lives nearby in the same state. She has lived in a condo with a friend for many years. Neither of them are married. She is retired. My SIL's friend owns the condo and my SIL pays her friend a small rent to cover expenses. Both of them are doing ok financially, generate a modest income from investments and, as such, are currently in a lower tax bracket than the MIL. I know my SIL takes the standard deduction. Not sure about SIL's friend.

3) My MIL has two other children (one my wife) who live in a different state.

4) They found a house that the three of them would like to live in. Current plan is for MIL, SIL and SIL's friend to buy the house and move in together.

So we've been discussing the best way to do this. We have some questions we are not sure the best way to do.

A) Who should own the house? Current thinking is that my SIL and SIL's friend should own it 50-50. We don't see any reason for my MIL to own it especially given she does not itemize on her taxes.

B) How should it be paid for? Current thinking is to not get a mortgage. The SIL's condo is not on the market and would therefore take a few months to sell. So, she most likely does not have cash on hand. My SIL probably does have cash on hand for her share. My MIL has the ability to front the money for the sale. She could loan the money as needed to my SIL and SIL's friend.

C) How should the MIL contribute? We were thinking she would just pay a good chunk herself (say a third) to live there for the rest of her life. How should that be done? Gift them the money? Or perhaps would it be best for MIL to pay rent to SIL and her friend? Would prefer not to complicate things so thought the rent option was too much and uncomfortable.

Would love to hear any thoughts on these questions or any other issues we have not thought about.

Thank you in advance for any help you can give us here.
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Re: Need help: How to buy a house with aging parent?

Post by Jack FFR1846 »

Why buy a house? No, really? If you have a few spare million, then ignore me. Otherwise, while your SIL and MIL both rent, why wouldn't they simply keep renting? If they find a rental house they like, then they could both move into it together if the SIL is ok with taking care of her mom. The rest of the kids could certainly gift something to help both of them. I found when helping my own mid 80s mom that finding and getting help for mundane daily chores is more of a requirement than a nice thing. Doing weekly housekeeping, laundry, grocery shopping, pharmacy delivery are all very, very easy to set up so the elder doesn't have to do it. And in this case, the SIL wouldn't be burdened with it.

My list of preferred things to do:

1) find rental house for MIL and SIL

2) get agreement from siblings on monthly gifting

3) arrange pharmacy delivery

4) arrange grocery store delivery or insta cart type service

5) find housekeeper who will put laundry in while doing weekly cleaning
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Nyc10036
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Re: Need help: How to buy a house with aging parent?

Post by Nyc10036 »

My thought on this is that after all of this buying new house etc,
your MIL may end up needing even more care sooner rather than later as in mid-2023.

Are you all planning on getting caretakers into the house 24/7?
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

I did suggest renting. It may still be an option, but they seem to want to buy. I think my SIL and her friend like the idea of owning and have the security of a house. It is their decision. I'm just trying to help out and often options. I will bring up renting again.

We have thought about the need for further care. She does have LTC insurance. So that would be there for a few years if needed. Of course, having more help in the house may happen. I don't think that influences that decision too much. The house they are looking at does have an extra bedroom that could always be used as needed.
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Re: Need help: How to buy a house with aging parent?

Post by Jack FFR1846 »

It might be wise to look at assisted living and nursing home options in MIL's area. People often try to hide or minimize usable assets of an elder so the nursing home doesn't take it. But we've been through this and if the elder doesn't have the assets to pay for an assisted living facility, their answer isn't going to be "Medicaid will take care of it", it's going to be "Sorry, we can't offer you residence here". So, while "hiding" assets could be that the MIL puts a big chunk down on a house and puts the mortgage and deed in the SIL's name, this could bite her when she no longer can stay in the house.

Every area will be different. We've seen some who after 2 years, if the elder has a pension or social security will accept that payment after 2 full years of private pay. In the case of DW's relative, 2 years was about $100k. She was in that facility for less than a year, then went home to her unsafe house for a decade, refusing to leave. After many ambulance called falls, she finally agreed to go to assisted living. With a state pension and small annuity, she barely met the lower end of income for a city run facility. We helped sell the house and that money paid for about 3 years in the assisted living facility. In the looking phase, we found many facilities where she would qualify (nobody just says "yes, come on in"). Some had 18 year waiting lists which would practically be less because people on the list would die before getting in.
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

Jack FFR1846 wrote: Fri Sep 30, 2022 8:34 am Why buy a house? No, really? If you have a few spare million, then ignore me. Otherwise, while your SIL and MIL both rent, why wouldn't they simply keep renting? If they find a rental house they like, then they could both move into it together if the SIL is ok with taking care of her mom. The rest of the kids could certainly gift something to help both of them. I found when helping my own mid 80s mom that finding and getting help for mundane daily chores is more of a requirement than a nice thing. Doing weekly housekeeping, laundry, grocery shopping, pharmacy delivery are all very, very easy to set up so the elder doesn't have to do it. And in this case, the SIL wouldn't be burdened with it.

My list of preferred things to do:

1) find rental house for MIL and SIL

2) get agreement from siblings on monthly gifting

3) arrange pharmacy delivery

4) arrange grocery store delivery or insta cart type service

5) find housekeeper who will put laundry in while doing weekly cleaning
+1
huge +1

To OP:
1
Renting allows options for changing family dynamics, MIL's health and care needs, (which is the priority) etc.
2
While SIL and "friend" are younger and have a more predictable life path and needs, things can and will change quickly when it comes to MIL's needs and lifestyle: IE: 24 hour home care, ADA requirements (moving allows finding living accommodations to fit MIL's life (which should be the ultimate priority over SIL and friend's needs and wanting to buy a home, etc).
3
Also, renting allows relocating, again, to fit MIL's health care needs with age (which is the priority, isn't it?) IE: close to health care facilities, hospitals, doctors appts, etc.
4
Renting also keeps things simple for all parties and especially MIL as far as finances, contributions, etc, etc.
5
Also, renting allows MIL to transition to; nursing home or assisted living, etc, facilities if needed. The "when" of this is often very unpredictable so the location to rent, etc, establishes all this and should be looked into "now" rather than when it's needed.
6.
Purchasing a home. . per se. . .then SIL and friend become reliant on MIL's financial contribution, etc. If MIL needs to move out and then into a senior facility, etc, then what will happen to the financial or logistical arrangement of SIL and Friend owning the home?
Again, the priority is that the "home" completely fulfill the needs of MIL vs SIL and Friend.
7
Reminder: the "elephant in the room" issue is to prioritize MIL's current and future needs, comfort, and quality of life, over all else. Especially at age 87 and going forward. Right?

To OP:
I hope this is helpful for you.
j :D

dis laimer: zillions of ways to do things and opinionizations based on nil to zero to extensive personal and professional experience vs pcd driven input. This is only one based on many multiple personal experiences.

** In many things, it is human nature for each person to perhaps have the underlying thought (financially or otherwise): "what's in it for me? how can I be involved in a situation to benefit others but also benefit myself".
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HomeStretch
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Re: Need help: How to buy a house with aging parent?

Post by HomeStretch »

The family may want to also consider the option of Assisted Living with a facility that also has a robust Memory Care option.

I also like the suggestion to rent rather than buy as needs may change.

Living in a private residence may work best if one person owns the residence and the other two pay rent.
1) does your SIL have the funds to buy a house?
2) SIL’s friend owns the condo - does friend want to own a house with two renters? What if friend dies or the friendship dissolves?
3) as this change is being made for MIL’s benefit, does MIL have the funds to purchase the house?

The SIL and friend may need to compromise on the choice of house in order to buy a house that accommodates MIL’s needs (i.e., few steps, elevator or 1st floor bedroom/full bath). As they too are aging, can they afford to also pay for services such as lawn care and housecleaning especially if caregiving increases time-wise?

As “memory issues” are involved, SIL will need a support system (aides or family) for time off from care duty - when she runs errands, to cover vacations, if SIL is hospitalized, etc. Discuss up-front whether friend is part of MIL’s care team or is just sharing the house with MIL and SIL.

With dementia in the picture, when choosing the house, planning renovations and setting up a support system, it’s important to do some upfront “what-if” planning. The planning needs to consider (if dementia becomes moderate to severe) that the person may not cooperate with personal care, they may wander outside unattended, they may be up at all hours, they may cause regular small fires when they try to use the microwave/stove at 2am, they may forget they don’t drive and grab car keys laying around, etc. When planning for this, they may want to choose a house with an extra bedroom (for family/aide support), install an alarm with door chimes, set-up an in-house camera system for public areas, have monitored hard-wired smoke/heat sensors, have bathroom grab bars and showers with zero-thresholds that are large enough to accommodate a wheelchair or two people, etc.

Best of luck.
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Watty
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Re: Need help: How to buy a house with aging parent?

Post by Watty »

privateID wrote: Fri Sep 30, 2022 7:44 am A) Who should own the house? Current thinking is that my SIL and SIL's friend should own it 50-50. We don't see any reason for my MIL to own it especially given she does not itemize on her taxes.
I agree that the MIL should not be a part owner mainly since she may need to move to assisted living or she could die and that would complicate things. She might also need the home equity to pay for long term care.

Once they have lived together for a while it might also turn out that the dynamics just don't work and it might be best for the MIL for move somewhere else.

One other possible scenario to consider is that you MIL could outlive the SIL then she would be in a jointly owned house with the friend who might sort of be stuck dealing with the elderly MIL. When people live into their 90's outliving kids is not unusual.
privateID wrote: Fri Sep 30, 2022 7:44 am She still drives a car for the immediate future, but need to plan for that to change.
My Mom survived my dad and she insisted on staying in the large single family house that I was raised in. That was her choice but that was not a good situation since that was very socially isolating and she drove longer than she should have just because she had limited ways to get out of the house otherwise.

She had outlived most of her friends or they had moved away or were less mobile too so she rarely saw people other than people like her housekeeper. That is what she wanted but I think that she would have been a lot better off if she had moved into a condo or apartment in a senior community(not assisted living if she did not need it) so that she could be around other people. For years we tried to get her to move to some place like that but she would not even consider it.

I understand the appeal of living with family but you mom might really be a lot better off living in some sort of senior community but the pandemic has made that more complicated.
privateID wrote: Fri Sep 30, 2022 7:44 am C) How should the MIL contribute? We were thinking she would just pay a good chunk herself (say a third) to live there for the rest of her life. How should that be done? Gift them the money? Or perhaps would it be best for MIL to pay rent to SIL and her friend? Would prefer not to complicate things so thought the rent option was too much and uncomfortable.
The MIl paying rent is actually the least complicated since it will be the easiest to unwind when the MIL needs or wants to move out or dies.

Just find out what a similar house would rent for then set up an automatic transfer each month from her account for a third of that into one of their accounts.

They will need to figure out how to handle food and utilities no matter how they structure the ownership.
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Thanks for the replies. At this point, they are adamant about buying. So, I'm going to focus on the financials - How to do a loan to a family member? Should the MIL do rent or just one big chunk in the beginning? I get the point of rent being cleaner, but it would make it easier for my SIL and friend if they didn't have to pay as much now. I understand the dangers here (falling out, situation changing, etc), but MIL is generally very generous and I think she would prefer to do it that way.
oldlongbeard
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Re: Need help: How to buy a house with aging parent?

Post by oldlongbeard »

TLDR;

Get her tested to see if she needs to get her license taken away. If family knows she has "memory issues", if she "forgets" to stop on red, FAMILY IS LIABLE. DO IT NOW.
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Re: Need help: How to buy a house with aging parent?

Post by Weathering »

privateID wrote: Fri Sep 30, 2022 6:15 pm Thanks for the replies. At this point, they are adamant about buying. So, I'm going to focus on the financials - How to do a loan to a family member? Should the MIL do rent or just one big chunk in the beginning? I get the point of rent being cleaner, but it would make it easier for my SIL and friend if they didn't have to pay as much now. I understand the dangers here (falling out, situation changing, etc), but MIL is generally very generous and I think she would prefer to do it that way.
Prepay 5 year’s rent from MIL to SIL/friend (or 3 year’s or 1 year). Re-evaluate when 5 years are up.
Note to SIL that she will take the lead in researching if MIL needs/wants to find a new living arrangement (e.g., assisted living or senior community) prior to the 5 year mark.
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Re: Need help: How to buy a house with aging parent?

Post by delamer »

privateID wrote: Fri Sep 30, 2022 6:15 pm Thanks for the replies. At this point, they are adamant about buying. So, I'm going to focus on the financials - How to do a loan to a family member? Should the MIL do rent or just one big chunk in the beginning? I get the point of rent being cleaner, but it would make it easier for my SIL and friend if they didn't have to pay as much now. I understand the dangers here (falling out, situation changing, etc), but MIL is generally very generous and I think she would prefer to do it that way.
Is your MIL wealthy enough to gift your SIL her share of the house cost as an “advance” on her inheritance?

With the condition that your MIL gets free rent.

(BTW, I in no way endorse this whole idea. Your MIL is a prime candidate for memory care/assisted living now.)
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

privateID wrote: Fri Sep 30, 2022 6:15 pm Thanks for the replies. At this point, they are adamant about buying. So, I'm going to focus on the financials - How to do a loan to a family member? Should the MIL do rent or just one big chunk in the beginning? I get the point of rent being cleaner, but it would make it easier for my SIL and friend if they didn't have to pay as much now. I understand the dangers here (falling out, situation changing, etc), but MIL is generally very generous and I think she would prefer to do it that way.
Notes:
1. SIL and "friend" purchase home. (entirely on their own).

2. MIL pays monthly rent, up to 1 year in advance and no more than that. Monthly is better as an auto deduction from her bank account for example. MIL also pays expenses related to her occupancy.

3. Have legal counsel draw up a rental lease agreement that "auto renews" on a "Month To Month" Basis.

Why "Month To Month" ????

Because the situation will change and may change rapidly and unexpectantly. IE: trauma or accident other health events, MIL goes from ER to Hospital to Nursing Care to Assisted Care facility. . then back to the home or not. . . repeat, rinse, repeat, rinse. .
And, or/MIL requires 24/7 in home or nursing care or assist care and the home doesn't work for her that way . .so she moves out. . to a place that works for her needs. etc.

Why a "Month to Month" lease?
Because it is in the best interest of MIL.

4. No lump sum, no loans, no "big chunks". . keep it simple. It is a tenant agreement. Nothing more.

5. MIL should not be involved in purchasing the home in any way with her financials.

6. MIL should seek legal counsel to finalize her estate planning (trust/will/etc. if not done already.

7. Consider . . .consider. . .taking care of all of MIL's needs "rent free". . etc. :D :D

I hope this is helpful.
j :D
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Topic Author
privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

If MIL pays rent to SIL, does SIL need to declare that rent as income?

MIL needs to be involved in house purchase as SIL's friend has not sold her condo yet. It would be a short-term loan to SIL's friend. SIL looking into how easy it would be for her to gather that money. So, she may need help too gathering the money short-term.
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

privateID wrote: Sat Oct 01, 2022 6:54 pm If MIL pays rent to SIL, does SIL need to declare that rent as income?

MIL needs to be involved in house purchase as SIL's friend has not sold her condo yet. It would be a short-term loan to SIL's friend. SIL looking into how easy it would be for her to gather that money. So, she may need help too gathering the money short-term.
To OP:
Notes:
1. You do not have a "rental business". . . so it is not income. . right?
2. If it is family contributing to family. . and it's not called "rent". . .then there is no rent. . .right?
3. So. . . SIL's "friend" is needing a short term loan. . from MIL?

To OP: (just a bit of "real estate/landlord humor that might be missed by many)
*****
Seriously. . .
Of course. . consult with your CPA.

PM me as you wish to go further off topic or tangential.
j :D
Last edited by Sandtrap on Sat Oct 01, 2022 9:35 pm, edited 4 times in total.
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02nz
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Re: Need help: How to buy a house with aging parent?

Post by 02nz »

Sandtrap wrote: Sat Oct 01, 2022 7:19 pm
privateID wrote: Sat Oct 01, 2022 6:54 pm If MIL pays rent to SIL, does SIL need to declare that rent as income?

MIL needs to be involved in house purchase as SIL's friend has not sold her condo yet. It would be a short-term loan to SIL's friend. SIL looking into how easy it would be for her to gather that money. So, she may need help too gathering the money short-term.
To OP:
Notes:
1. You do not have a "rental business". . . so it is not income. . right?
2. If it is family contributing to family. . and it's not called "rent". . .then there is no rent. . .right?
3. So. . . SIL's "friend" is needing a short term loan. . from MIL?

j :D
The IRS would like a word with you.
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

02nz wrote: Sat Oct 01, 2022 7:32 pm
Sandtrap wrote: Sat Oct 01, 2022 7:19 pm
privateID wrote: Sat Oct 01, 2022 6:54 pm If MIL pays rent to SIL, does SIL need to declare that rent as income?

MIL needs to be involved in house purchase as SIL's friend has not sold her condo yet. It would be a short-term loan to SIL's friend. SIL looking into how easy it would be for her to gather that money. So, she may need help too gathering the money short-term.
To OP:
Notes:
1. You do not have a "rental business". . . so it is not income. . right?
2. If it is family contributing to family. . and it's not called "rent". . .then there is no rent. . .right?
3. So. . . SIL's "friend" is needing a short term loan. . from MIL?

j :D
The IRS would like a word with you.
funny
:D :D :D :D

to OP:
of course, consult with your CPA.

**original post edited to clarify (humor) based on 40+ years with landlord/tenant issues and business situations.
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
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Re: Need help: How to buy a house with aging parent?

Post by delamer »

privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
They need to talk to a real estate attorney, and a CPA.

There are so many ways this can go south. What if your MIL prepays 5 years of rent and dies or moves out in 2 years. What if your SIL dies and your MIL ends up living with her friend?

Has your MIL considered just doing an advance on your SIL’s inheritance?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Need help: How to buy a house with aging parent?

Post by mkc »

privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here.

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
You need to be very careful if there is a chance MIL might need financial assistance for long term care within the next 5 or so years. If these proposed transfers are considered gifts, that money is also considered to "be available" within a Medicaid lookback period.

This seems like a really, really bad idea, especially considering one of the parties is likely not one of your MIL's intended heirs..
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
To OP:
Notes:
1. Who is "really" benefitting from all this?
2. What if MIL needs the 200k for medical costs or home care (up to 20-30k/month at times), and so forth. Then what?

3. Highly suggest talking to:
a) MIL's "own legal counsel with her best interests at heart and paid for".
b) CPA (your questions really require a professional CPA vs random online or friend or other input)

To OP:
Note: what others would do is not :: what you should do as advised from your own professional consults with all of your financial and legal documentations and concerns; for all 3 parties involved.

While a DIY approach to these things might seem to be saving money/fees up front. The costs and repercussions of not having all the "ducks in order" are not good in the long term, etc.

I hope this is helpful
j :D
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Re: Need help: How to buy a house with aging parent?

Post by Broken Man 1999 »

privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
There is absolutely no way I would tie up the assets of an 87 year old person who already has memory issues. Especially in an arrangement involving a mortgage. NOPE, NOPE, NOPE!

MIL could soon be needding very expensive care, sooner than later it seems.

Despite everyone's wishes, she should probably be moved to an assisted living center now. Or, perhaps to a small apartment with a health aide coming in for a couple of hours to help her with housekeeping and running errands for her, as, IMHO her license should be lifted pronto! I'm not trying to be mean, I know the reluctance people have when others try to remove some of their ability to remain independent. We had the same issue with my father. He was as stubborn as he could be.

Good luck!

Broken Man 1999
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Sandtrap
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

Broken Man 1999 wrote: Mon Oct 03, 2022 4:51 pm
privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
There is absolutely no way I would tie up the assets of an 87 year old person who already has memory issues. Especially in an arrangement involving a mortgage. NOPE, NOPE, NOPE!

MIL could soon be needding very expensive care, sooner than later it seems.

Despite everyone's wishes, she should probably be moved to an assisted living center now. Or, perhaps to a small apartment with a health aide coming in for a couple of hours to help her with housekeeping and running errands for her, as, IMHO her license should be lifted pronto! I'm not trying to be mean, I know the reluctance people have when others try to remove some of their ability to remain independent. We had the same issue with my father. He was as stubborn as he could be.

Good luck!

Broken Man 1999
+10000
Great substantive points.
Well said.

Ultimately.... who is benefiting who or what...is the only priority.
j🌺

:D To OP:
Edit added: MIL is fortunate to have you looking after her best interests. Best of luck to resolve this situation.
Last edited by Sandtrap on Mon Oct 03, 2022 7:07 pm, edited 1 time in total.
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Katietsu
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Re: Need help: How to buy a house with aging parent?

Post by Katietsu »

For some reason, this forum skews away from people remaining in their home or with family and towards “facilities.” So read the responses with that perspective. Odd, because it is DIY in so many other arenas.

I am not sure it is necessary for Mom to pay rent in the IRS sense. She can give an upfront gift to her daughter. She can contribute to expenses like utilities and food.

Some of what is reasonable depends on Mom’s resources. For instance, if Mom has $150,000 in income and over a $2,000,000 in assets, at age 87 in a MCOL area, then all these comments about Medicaid and Mom needing to be able to provide for herself, might not be relevant with respect to a gift of $200,000. Similarly, you seem fine if sister gets $200,000 but then Mom only stays for two years. I would be fine with such an arrangement if it involved my SIL and MIL. Being able to live with family is very important in my history. And we are OK if all the finances are not always “equal.”

You do need to make your plans considering all the possible twists such as SIL gets sick or passes away. Friend can’t handle living with a person who becomes increasingly difficult and such. Also, can SIL and friend afford the upkeep without any additional contributions from Mom?

As far as lending the friend their portion, I wonder if there is a good way to secure the loan with the real estate? I would talk to a lawyer about this. These are not small dollar amounts.

I really hope this works out. And, yes, I have been intimately involved with end of life care, including dementia. I am sorry you are experiencing it. Please visit Mom if possible. Everyone, particularly SIL, should be ready for all the twists and swerves. It also helps to let go of some of life’s “rules.” I mean if she wants strawberry ice cream for dinner, who cares?
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Sandtrap wrote: Mon Oct 03, 2022 3:23 pm
privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
To OP:
Notes:
1. Who is "really" benefitting from all this?
2. What if MIL needs the 200k for medical costs or home care (up to 20-30k/month at times), and so forth. Then what?

3. Highly suggest talking to:
a) MIL's "own legal counsel with her best interests at heart and paid for".
b) CPA (your questions really require a professional CPA vs random online or friend or other input)

To OP:
Note: what others would do is not :: what you should do as advised from your own professional consults with all of your financial and legal documentations and concerns; for all 3 parties involved.

While a DIY approach to these things might seem to be saving money/fees up front. The costs and repercussions of not having all the "ducks in order" are not good in the long term, etc.

I hope this is helpful
j :D

I fully get every comment being made here and in the other posts. So, let me explain a few more things here.

a) I am totally in charge of my MILs money. Everyone in the family trusts me and I have tried really really hard to do right by her and the family. I had helped my FIL when he was alive and they did a great job teaching their children values. Money has never been a problem here. Of course, I understand that things can change in the future.

b) MIL has a very nice long-term care policy. If and when she needs that, 3 or so years will be taken care of. MIL's parents lived to early 90s in very similar state. She is in pretty good physical health.

c) I am closely monitoring the car situation. I went through this with my dad. We got his reflexes tested and took away his license in his 70s. At this point, she has not got into a single fender bender. She just drives well. It is impressive, but we all believe that her driving days will be over soon. In fact, part of moving in with my SIL is in preparation for that.

d) My SIL, with her siblings agreeing, thought this is the best move. They actually toured an assisted living facility and opted against it. My take is if she is willing to do this, god bless her. I do think it might be more than she realizes, but we can always change directions going forward.

e) My MIL's financials are pretty solid. Between annuities/SS she has much more income than she spends. In addition, she has enough money in investments that I feel she can absorb helping out in a generous way. So, fair point to be concerned about tying up money of an 87-old, but I am saying I don't have a concern here.

f) When we talk about MIL's CPA, she really does not have one. I do her taxes. She really has a pretty simple situation (although every year there seems to a new twist). As for her lawyer, sorry again. There really has been no need up to now (we did do a new will/living will/POA/etc recently, but that was a one shot deal). I am highly considering engaging professionals here as it is always important to know when you don't know.

g) I would never do anything for her solely based on comments on an anonymous web board, even one I love as much as this one. I use this to generate ideas for me to research. And I always research things out. So I have been a bit frustrated by how quickly they are moving here, but I also feel certain decisions are really not mine to make.

OK, soap box over. I gave SIL and SIL's friend a homework assignment to figure out how much they can afford to spend right now. They both use Vanguard advisors, so that will be a major part of any decision. I know this, MIL really wants this. MIL has always helped out financially when appropriate. My job here is to advice them how to do it prudently. If it were up to me, they would be renting. At this point, the rent idea does sound like the most appropriate option, but if they decide it is better to do a lump sum and perhaps a short-term loan, I do believe she can handle it financially. Now, whether that means I should get a CPA/lawyer involved here, that I'm not sure but considering it.

Thanks to all the advice so far. I know it's all coming from a good place.
Last edited by privateID on Mon Oct 03, 2022 6:23 pm, edited 1 time in total.
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Katietsu wrote: Mon Oct 03, 2022 5:54 pm For some reason, this forum skews away from people remaining in their home or with family and towards “facilities.” So read the responses with that perspective. Odd, because it is DIY in so many other arenas.

I am not sure it is necessary for Mom to pay rent in the IRS sense. She can give an upfront gift to her daughter. She can contribute to expenses like utilities and food.

Some of what is reasonable depends on Mom’s resources. For instance, if Mom has $150,000 in income and over a $2,000,000 in assets, at age 87 in a MCOL area, then all these comments about Medicaid and Mom needing to be able to provide for herself, might not be relevant with respect to a gift of $200,000. Similarly, you seem fine if sister gets $200,000 but then Mom only stays for two years. I would be fine with such an arrangement if it involved my SIL and MIL. Being able to live with family is very important in my history. And we are OK if all the finances are not always “equal.”

You do need to make your plans considering all the possible twists such as SIL gets sick or passes away. Friend can’t handle living with a person who becomes increasingly difficult and such. Also, can SIL and friend afford the upkeep without any additional contributions from Mom?

As far as lending the friend their portion, I wonder if there is a good way to secure the loan with the real estate? I would talk to a lawyer about this. These are not small dollar amounts.

I really hope this works out. And, yes, I have been intimately involved with end of life care, including dementia. I am sorry you are experiencing it. Please visit Mom if possible. Everyone, particularly SIL, should be ready for all the twists and swerves. It also helps to let go of some of life’s “rules.” I mean if she wants strawberry ice cream for dinner, who cares?
Thank you for that post! My biggest advice to my MIL was to use her money for experiences. As such, we have visited her many times. The grand kids always have expense-paid options to visit. We also have gone on a number of vacations (although that is getting harder to do).
DidItMyWay
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Re: Need help: How to buy a house with aging parent?

Post by DidItMyWay »

This sounds like a really bad idea for multiple reasons that have already been mentioned.

Something about this situation doesn't sit well with me. I could be missing something but it sounds like the "friend" (and maybe SIL too) want to buy a new house that they can't afford and need a big chunk of your MIL's money in order to do it. I would make sure, as her daughter, son-in-law, and other (3rd) child, that your MIL's interests being are protected here.

Just a few of the many things to consider:

If something happens to your SIL, are the MIL and the friend going to live together?

If your MIL gives a chunk of money to SIL and friend to help buy house and then needs money for care, who is going to chip in for that?

If something happens to your MIL, do the 3 kids inherit MIL's portion of the house and then all 3 own the house with SIL's friend? If so, what happens if the 3 kids want to sell the house and the friend doesn't?

Edited to add: Just saw your reply, and it does sound like you MIL has you to look out for her best interests so that's good. I agree with you and others that renting would be a better option. Or if she moves in with SIL and friend, let SIL and friend buy the house and have MIL just help out with monthly expenses like utilities and groceries.
Slow and steady wins the race.
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Re: Need help: How to buy a house with aging parent?

Post by delamer »

privateID wrote: Mon Oct 03, 2022 6:07 pm
Sandtrap wrote: Mon Oct 03, 2022 3:23 pm
privateID wrote: Mon Oct 03, 2022 10:27 am Things are moving pretty fast here. I'm going to throw out some easy to work with numbers here to discuss this further. Say the house cost $600K, SIL has $200K available to contribute and SIL's friend does not (but SIL's friend expects to sell her condo for $200K).

1) Rather than have the MIL pay a monthly rent, all parties prefer for MIL just to pay a big chunk up front. So if MIL pays $200K toward the house, would that be considered $100K gift to SIL and $100K gift to SIL's friend? If so, seems like we will be filing a gift tax return this year. Or perhaps can it be viewed as pre-paying rent for say 5 years?

2) As far as the SIL's friend, could the MIL front the $200K to the SIL's friend and just get repaid when the SIL's friend's condo sells (expect that to happen before the end of the year)? Would a formal loan agreement be necessary? If so, how does one do that?
To OP:
Notes:
1. Who is "really" benefitting from all this?
2. What if MIL needs the 200k for medical costs or home care (up to 20-30k/month at times), and so forth. Then what?

3. Highly suggest talking to:
a) MIL's "own legal counsel with her best interests at heart and paid for".
b) CPA (your questions really require a professional CPA vs random online or friend or other input)

To OP:
Note: what others would do is not :: what you should do as advised from your own professional consults with all of your financial and legal documentations and concerns; for all 3 parties involved.

While a DIY approach to these things might seem to be saving money/fees up front. The costs and repercussions of not having all the "ducks in order" are not good in the long term, etc.

I hope this is helpful
j :D

I fully get every comment being made here and in the other posts. So, let me explain a few more things here.

a) I am totally in charge of my MILs money. Everyone in the family trusts me and I have tried really really hard to do right by her and the family. I had helped my FIL when he was alive and they did a great job teaching their children values. Money has never been a problem here. Of course, I understand that things can change in the future.

b) MIL has a very nice long-term care policy. If and when she needs that, 3 or so years will be taken care of. MIL's parents lived to early 90s in very similar state. She is in pretty good physical health.

c) I am closely monitoring the car situation. I went through this with my dad. We got his reflexes tested and took away his license in his 70s. At this point, she has not got into a single fender bender. She just drives well. It is impressive, but we all believe that her driving days will be over soon. In fact, part of moving in with my SIL is in preparation for that.

d) My SIL, with her siblings agreeing, thought this is the best move. They actually toured an assisted living facility and opted against it. My take is if she is willing to do this, god bless her. I do think it might be more than she realizes, but we can always change directions going forward.

e) My MIL's financials are pretty solid. Between annuities/SS she has much more income than she spends. In addition, she has enough money in investments that I feel she can absorb helping out in a generous way. So, fair point to be concerned about tying up money of an 87-old, but I am saying I don't have a concern here.

f) When we talk about MIL's CPA, she really does not have one. I do her taxes. She really has a pretty simple situation (although every year there seems to a new twist). As for her lawyer, sorry again. There really has been no need up to now (we did do a new will/living will/POA/etc recently, but that was a one shot deal). I am highly considering engaging professionals here as it is always important to know when you don't know.

g) I would never do anything for her solely based on comments on an anonymous web board, even one I love as much as this one. I use this to generate ideas for me to research. And I always research things out. So I have been a bit frustrated by how quickly they are moving here, but I also feel certain decisions are really not mine to make.

OK, soap box over. I gave SIL and SIL's friend a homework assignment to figure out how much they can afford to spend right now. They both use Vanguard advisors, so that will be a major part of any decision. I know this, MIL really wants this. MIL has always helped out financially when appropriate. My job here is to advice them how to do it prudently. If it were up to me, they would be renting. At this point, the rent idea does sound like the most appropriate option, but if they decide it is better to do a lump sum and perhaps a short-term loan, I do believe she can handle it financially. Now, whether that means I should get a CPA/lawyer involved here, that I'm not sure but considering it.

Thanks to all the advice so far. I know it's all coming from a good place.
Have you considered suggesting that your SIL hire a real estate attorney, that her friend hire a real estate attorney, and that you’ll find a real estate attorney for your MIL to hash this all out?

This is not a do-it-yourself project and everyone’s interests need to be protected.

There is a level of naivete among the three of them, compounded by your MIL’s cognitive issues, that is reflected in their proposals. Maybe hearing from 3rd party professionals will change their minds.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
SuzBanyan
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Re: Need help: How to buy a house with aging parent?

Post by SuzBanyan »

Don’t gift or loan money to SIL’s friend. Make an offer on the new property contingent on the sale of the condo. In many places, the real estate market will be amenable to such an offer at this time.

Have SIL and friend take out a mortgage to cover the balance of the purchase price. Have Mom pay market rate rent to help make the payments, at least in the early years. If Mom moves out, SIL and friend can either find someone else to pay rent, pay the mortgage out of other income or pay off the mortgage.


+1000. They need to have a legal agreement that considers all the possible contingencies. The process of drafting such an agreement will help everyone understand the potential issues.
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Let me steer this conversation a bit in a different direction. I get, and most likely agree, that loaning the SIL's friend money is a potentially bad situation. I will add that the SIL's friend is like family and that is why I say "most likely" and not for sure. The loan was only going to happen if the SIL's friend could not front the money. If the SIL's friend is able to front the money and then sells the condo later, in other words, she takes care of her half of the house herself, would that simplify things to the point of not requiring lawyers (I just think they don't want to do all that)? Then the only issue becomes how the mother pays rent (monthly or a lump sum pre-paying a set period of time). Sure, if something were to happen to the SIL, it would then be upon the family to decide where the MIL should live. The SIL's portion of the house is her business decided by her will or how she decided to title the deed of the house.
delamer
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Re: Need help: How to buy a house with aging parent?

Post by delamer »

privateID wrote: Mon Oct 03, 2022 9:40 pm Let me steer this conversation a bit in a different direction. I get, and most likely agree, that loaning the SIL's friend money is a potentially bad situation. I will add that the SIL's friend is like family and that is why I say "most likely" and not for sure. The loan was only going to happen if the SIL's friend could not front the money. If the SIL's friend is able to front the money and then sells the condo later, in other words, she takes care of her half of the house herself, would that simplify things to the point of not requiring lawyers (I just think they don't want to do all that)? Then the only issue becomes how the mother pays rent (monthly or a lump sum pre-paying a set period of time). Sure, if something were to happen to the SIL, it would then be upon the family to decide where the MIL should live. The SIL's portion of the house is her business decided by her will or how she decided to title the deed of the house.
This thread is stuck in a rut.

Virtually every commenter has said that the 3 parties need to consult attorneys and/or tax experts to sort out this home purchase so everyone involved has their interests protected. (Not to mention the complicating dementia issue.)

Then you come back asking how it can all be arranged without the assistance of said professionals because the involved parties don’t want to do that.

You are stuck in a no-win situation and you aren’t going to get the answers that you are looking for here.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

privateID wrote: Mon Oct 03, 2022 9:40 pm Let me steer this conversation a bit in a different direction. I get, and most likely agree, that loaning the SIL's friend money is a potentially bad situation. I will add that the SIL's friend is like family and that is why I say "most likely" and not for sure. The loan was only going to happen if the SIL's friend could not front the money. If the SIL's friend is able to front the money and then sells the condo later, in other words, she takes care of her half of the house herself, would that simplify things to the point of not requiring lawyers (I just think they don't want to do all that)? Then the only issue becomes how the mother pays rent (monthly or a lump sum pre-paying a set period of time). Sure, if something were to happen to the SIL, it would then be upon the family to decide where the MIL should live. The SIL's portion of the house is her business decided by her will or how she decided to title the deed of the house.
to op

question?

is there a reason why mom does not have her own legal counsel retained solely for her and by her, and her benefit alone?

why not?

it's highly possible that if this were in place there would be no other conversations....?

i hope this is helpful for you.
j🌺
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Re: Need help: How to buy a house with aging parent?

Post by tashnewbie »

Didn't read all of the responses but skimmed a number of them.

This seems like an unnecessarily complicated arrangement for all parties involved, but especially for MIL.

I think your MIL should explore moving into a CCRC (continuing care retirement community). A CCRC would allow her to transition (hopefully relatively seamlessly) from independent living to assisted living to memory care, as needed as her health progressively worsens. I think it would be advantageous for her to go ahead and get the ball rolling to get into this type of community. It sounds like she's at the point where she may need some assistance (or would desire it for certain activities of daily living), and the great silver lining is that she has the $$$ to pay for it.

Do SIL and SIL's friend want to move into a bigger house? If they do, it sounds like they have sufficient assets to put $400k down on a house, which should get them whatever house they want in their area. If the condo meets their needs, I don't see why they'd want to take on a new mortgage and add the complexity of buying a house with a non-spouse. If your SIL wants to diversify her assets by owning real estate, she has $200k with which she could make a sizeable down payment (or purchase, such as something similar to the friend's condo).

Above all, I highly recommend they consult with professionals to advise about whether the three of them should even consider buying a house together and if they insist on doing it, how to structure it in a lawful and reasonable way that protects all of them.
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Thank you all for the comments. Some updates and clarifications.

1) SIL and SIL's friend spoke to their Vanguard advisers and have learned that they both have the money to buy the house. This all happened so fast (first house they looked at and an accepted offer) that I just started to think of options. One option, because I knew MIL's financials and she had the liquidity, was for her to front the money. Since that point (as of earlier today), I have learned that SIL and SIL's friend also have the liquidity, even before getting the money from the condo sale. So, we can scratch the whole idea of a loan to the SIL or the SIL's friend.

2) MIL's only participation in this house will be as a renter. Whether or not she does it monthly or she prepays a bit is really not a big deal as long as any prepayment is not that far into the future. I understand the concerns with prepaying anything.
is there a reason why mom does not have her own legal counsel retained solely for her and by her, and her benefit alone?
3) Does everyone need a lawyer? Does every elder need a lawyer (could probably make a Better Call Saul joke for those who watched that show)? This is a strong family where I believe the mother's interests are strongly being looked after on many levels. Having said that, if there is a need, everyone is totally willing. I really do appreciate everyone's concern for my MIL in this conversation.
This seems like an unnecessarily complicated arrangement for all parties involved, but especially for MIL.
4) From the MIL's perspective, she wants this to happen more than anybody. She was lonely living alone. She had a hard time making new friends. Although she is still physically active, I believe living alone is no longer the best option for her. Family has always been everything to her. As long as SIL can handle it and is willing, I believe this is the best option.
Do SIL and SIL's friend want to move into a bigger house?
5) SIL and SIL's friend have lived in a small condo for a long time. For a variety of reasons, they wanted to move on. That coincided with the growing MIL situation (memory, lonely). The house has enough space for everyone but would not be too big for just two people eventually. In other words, they believe they found the perfect house for the situation.

At this point I have handle on how the money is going to work. Thank you for responding to my scattered thoughts while I was exploring. MIL's children are planning to have a call tonight to discuss everything. I suggested, with an appreciation to the comments in this thread, for them to really explore all the possibilities that could happen - LTC, sickness, death. I know the other children well and I expect them, being the strong family they are, to be able to have a plan. Is it possible they will miss something? Sure. But they will deal with it as a family. Last year we went to a lawyer to redo her will and other docs. I wouldn't want to put her through that again if not necessary.
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Re: Need help: How to buy a house with aging parent?

Post by stan1 »

Don't refer to MIL as a "renter". She is living with her daughter, and contributing to household expenses.

The IRS does not require a family start a rental property business when an aging parent moves in to a spare bedroom.

SIL and her friend are co-habitating. The IRS does not require that become a business either but if they are buying a property together they might want a cohabitation agreement on how they will divide costs and eventually sell the property. For example if one wants to sell and the other does not, what happens? Generally a co-habitation agreement would say that the one who wants to stay gets the chance to buy the other out at a market price, but if that's not agreed to the property is sold with proceeds split.
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

stan1 wrote: Tue Oct 04, 2022 2:23 pm Don't refer to MIL as a "renter". She is living with her daughter, and contributing to household expenses.

The IRS does not require a family start a rental property business when an aging parent moves in to a spare bedroom.

SIL and her friend are co-habitating. The IRS does not require that become a business either but if they are buying a property together they might want a cohabitation agreement on how they will divide costs and eventually sell the property. For example if one wants to sell and the other does not, what happens? Generally a co-habitation agreement would say that the one who wants to stay gets the chance to buy the other out at a market price, but if that's not agreed to the property is sold with proceeds split.
+1
Excellent points.
Well said

j :D
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

stan1 wrote: Tue Oct 04, 2022 2:23 pm Don't refer to MIL as a "renter". She is living with her daughter, and contributing to household expenses.

The IRS does not require a family start a rental property business when an aging parent moves in to a spare bedroom.

SIL and her friend are co-habitating. The IRS does not require that become a business either but if they are buying a property together they might want a cohabitation agreement on how they will divide costs and eventually sell the property. For example if one wants to sell and the other does not, what happens? Generally a co-habitation agreement would say that the one who wants to stay gets the chance to buy the other out at a market price, but if that's not agreed to the property is sold with proceeds split.
Thank you!
bluebolt
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Re: Need help: How to buy a house with aging parent?

Post by bluebolt »

privateID wrote: Tue Oct 04, 2022 2:18 pm
is there a reason why mom does not have her own legal counsel retained solely for her and by her, and her benefit alone?
3) Does everyone need a lawyer? Does every elder need a lawyer (could probably make a Better Call Saul joke for those who watched that show)? This is a strong family where I believe the mother's interests are strongly being looked after on many levels. Having said that, if there is a need, everyone is totally willing. I really do appreciate everyone's concern for my MIL in this conversation.
Lawyers aren't just good at protecting you against people who aren't looking out for your interests. They are also good at uncovering and accounting for unexpected situations. Some of those unexpected situations could cause the interests of the parties to diverge.
delamer
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Re: Need help: How to buy a house with aging parent?

Post by delamer »

bluebolt wrote: Wed Oct 05, 2022 11:46 am
privateID wrote: Tue Oct 04, 2022 2:18 pm
is there a reason why mom does not have her own legal counsel retained solely for her and by her, and her benefit alone?
3) Does everyone need a lawyer? Does every elder need a lawyer (could probably make a Better Call Saul joke for those who watched that show)? This is a strong family where I believe the mother's interests are strongly being looked after on many levels. Having said that, if there is a need, everyone is totally willing. I really do appreciate everyone's concern for my MIL in this conversation.
Lawyers aren't just good at protecting you against people who aren't looking out for your interests. They are also good at uncovering and accounting for unexpected situations. Some of those unexpected situations could cause the interests of the parties to diverge.
And in this case, there is a non-relative involved who emotionally may be part of the family but isn’t from a legal perspective (inheritance, etc.) And whose to say how the non-relative’s heirs might respond if the proper paperwork isn’t put in place and the non-relative dies or becomes disabled?
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. - Alexandre Dumas, fils
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

delamer wrote: Wed Oct 05, 2022 12:47 pm
bluebolt wrote: Wed Oct 05, 2022 11:46 am
privateID wrote: Tue Oct 04, 2022 2:18 pm
is there a reason why mom does not have her own legal counsel retained solely for her and by her, and her benefit alone?
3) Does everyone need a lawyer? Does every elder need a lawyer (could probably make a Better Call Saul joke for those who watched that show)? This is a strong family where I believe the mother's interests are strongly being looked after on many levels. Having said that, if there is a need, everyone is totally willing. I really do appreciate everyone's concern for my MIL in this conversation.
Lawyers aren't just good at protecting you against people who aren't looking out for your interests. They are also good at uncovering and accounting for unexpected situations. Some of those unexpected situations could cause the interests of the parties to diverge.
And in this case, there is a non-relative involved who emotionally may be part of the family but isn’t from a legal perspective (inheritance, etc.) And whose to say how the non-relative’s heirs might respond if the proper paperwork isn’t put in place and the non-relative dies or becomes disabled?
I do understand the concerns. Thank you. I see two issues (maybe a lawyer would see more):

1) The SIL and SIL's friend sharing a house - There are many potential issues here, but this is really for the SIL to decide. Some decisions involve what happens to the house when one passes away, etc. Obviously I care about the SIL, but I don't make decisions for her. They have lived together for two decades now and have never lawyer-ed up their situation. Should she now? It wouldn't be a bad idea since they will be sharing owning the house.

2) The MIL - If the SIL is no longer there for any reason, it will be up to the rest of the family to figure out what to do. From how I see it, there is no chance they would keep the MIL in that house without the SIL. There really is nothing to be decided now for the MIL, although the family should be prepared (and I am prepared to deal with such a situation as her financial person).
SuzBanyan
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Re: Need help: How to buy a house with aging parent?

Post by SuzBanyan »

privateID wrote: Wed Oct 05, 2022 4:11 pm
delamer wrote: Wed Oct 05, 2022 12:47 pm
bluebolt wrote: Wed Oct 05, 2022 11:46 am
privateID wrote: Tue Oct 04, 2022 2:18 pm
is there a reason why mom does not have her own legal counsel retained solely for her and by her, and her benefit alone?
3) Does everyone need a lawyer? Does every elder need a lawyer (could probably make a Better Call Saul joke for those who watched that show)? This is a strong family where I believe the mother's interests are strongly being looked after on many levels. Having said that, if there is a need, everyone is totally willing. I really do appreciate everyone's concern for my MIL in this conversation.
Lawyers aren't just good at protecting you against people who aren't looking out for your interests. They are also good at uncovering and accounting for unexpected situations. Some of those unexpected situations could cause the interests of the parties to diverge.
And in this case, there is a non-relative involved who emotionally may be part of the family but isn’t from a legal perspective (inheritance, etc.) And whose to say how the non-relative’s heirs might respond if the proper paperwork isn’t put in place and the non-relative dies or becomes disabled?
I do understand the concerns. Thank you. I see two issues (maybe a lawyer would see more):

1) The SIL and SIL's friend sharing a house - There are many potential issues here, but this is really for the SIL to decide. Some decisions involve what happens to the house when one passes away, etc. Obviously I care about the SIL, but I don't make decisions for her. They have lived together for two decades now and have never lawyer-ed up their situation. Should she now? It wouldn't be a bad idea since they will be sharing owning the house.

2) The MIL - If the SIL is no longer there for any reason, it will be up to the rest of the family to figure out what to do. From how I see it, there is no chance they would keep the MIL in that house without the SIL. There really is nothing to be decided now for the MIL, although the family should be prepared (and I am prepared to deal with such a situation as her financial person).
I think your 2 points are intertwined. The obvious difference between the past arrangement and the proposed arrangement with regard to your SIL is that SIL had no ownership interest in the condo but will be a half owner in the house. What would SIL and MIL expect should happen if the friend passes away while the 3 of them are living together? Sell the house to a 3rd party and pay the friend’s estate half the net proceeds, while SIL and MIL find a new place to live? Even if such a result is not financially devastating, I would not think it is a good outcome for MIL.
bluebolt
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Re: Need help: How to buy a house with aging parent?

Post by bluebolt »

privateID wrote: Wed Oct 05, 2022 4:11 pm I do understand the concerns. Thank you. I see two issues (maybe a lawyer would see more):

1) The SIL and SIL's friend sharing a house - There are many potential issues here, but this is really for the SIL to decide. Some decisions involve what happens to the house when one passes away, etc. Obviously I care about the SIL, but I don't make decisions for her. They have lived together for two decades now and have never lawyer-ed up their situation. Should she now? It wouldn't be a bad idea since they will be sharing owning the house.

2) The MIL - If the SIL is no longer there for any reason, it will be up to the rest of the family to figure out what to do. From how I see it, there is no chance they would keep the MIL in that house without the SIL. There really is nothing to be decided now for the MIL, although the family should be prepared (and I am prepared to deal with such a situation as her financial person).
In this situation, I would think of a lawyer as an advocate for MIL/SIL (and friend), not an adversary. If the parties can decide a framework for what they want prior to speaking with lawyers, it should be straightforward for the lawyers to codify and point out any issues/edge cases with what you've decided. Remember that if someone passes away, the other party will be dealing with the estate/relatives and the goodwill that exists now may not be there. Without codifying what will happen, there may also be a misunderstanding between parties about what was agreed to. And, of course, even the best relationships can falter.
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privateID
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Re: Need help: How to buy a house with aging parent?

Post by privateID »

Thanks for all the comments. My SIL did read this thread and she is pretty much in the driver's seat here.
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Sandtrap
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Re: Need help: How to buy a house with aging parent?

Post by Sandtrap »

privateID wrote: Thu Oct 06, 2022 8:26 pm Thanks for all the comments. My SIL did read this thread and she is pretty much in the driver's seat here.
Mission accomplished.
Information delivered and received.

Thanks for the update and follow through.
Best luck in a good result for all.
j :D
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Broken Man 1999
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Re: Need help: How to buy a house with aging parent?

Post by Broken Man 1999 »

OP, looks like the best outcome, great!

One more piece of advice, related to your mother's dementia.

The pace of dementia can vary substaintally, very slow, very fast. I think people who are in daily contact sometimes don't always notice worsening conditions that are gradual as quickly. You can notice the worsening condition if you don't see or speak to the person as regularly as someone like your SIL and/or SIL's friend. If so, you might see the condition has worsened quicker than those exposed to your mother every day. I noticed this with my sister and my father.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
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