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Old 11-26-2018, 10:04 AM
 
38,273 posts, read 14,957,601 times
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Here's one option. Loan the money for the addition to your son and daughter-in-law. Set up payment plan with interest. All on the up and up.

Every month, you get a payment from them and you pay them that much in rent.

Should you have a falling out, you will continue to get the monthly loan payment wherever you go. They can rent the place out if necessary. Or if, God forbid, they divorce, they can use the proceeds from the sale of the house to pay off the loan.

If you end up in an assisted living facility, this loan payment will be counted among your assets, but some states, perhaps most, the original loan amount will not be counted against your spend down if, God forbid, Medicaid assistance becomes necessary.

Naturally, you will need an attorney to help ensure the all every i is dotted and every t crossed.

Just a thought.
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Old 11-26-2018, 12:14 PM
 
3,419 posts, read 871,324 times
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Quote:
Originally Posted by suz1023 View Post
I'm retired early with a disability, and widowed.

My son and his wife have asked me to move in with them. I am delighted and curious about organizing the investment I'll make in their property for myself. The loose plan is for me to add a second story onto the large garage and create my home there.

(Amazingly the garage size and location actually hit all of my wish lists for my next /last home. Brook frontage and overlooking a pasture and woods ---AND my son next door--I've hit the lottery!)

For me, the benefits are huge. Support, family, and little to no mortgage, as I will be able to pay cash for the addition. No mortgage is HUGE because without one I can travel, which is my heart's desire.

However, I'm a worrier, so if they move i'll lose my new home---unless i move too or arrange that my investment gets paid back when they sell (they love this place so not likely but i still want to plan for every contingency i can). What if they split? What if I hate the locale? What if what if WHAT IF??!




Are there some what standard agreements and contracts one can look at for more detailed info and suggestions? Is anyone here doing this already and have some insight as to how best to make it work for everyone?
I know I will need a lawyer, I hope to start a conversation here to gather more info before we get to the 200$ an hour part!
Two words. NO MORTGAGE. What do you want for free? Beggars can't be choosers. You have to buy your "choice" if it differs from theirs with $$$ if you want the independence to have your own place / influence.

Giving that up gives you cashflow. I'm the kind of person who would not let my tastes get in the way of knowing I'm more than financially secure, provided the arrangement was amicable.
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Old 11-26-2018, 01:36 PM
 
404 posts, read 494,951 times
Reputation: 543
Quote:
Originally Posted by GotHereQuickAsICould View Post
Here's one option. Loan the money for the addition to your son and daughter-in-law. Set up payment plan with interest. All on the up and up.

Every month, you get a payment from them and you pay them that much in rent.

Should you have a falling out, you will continue to get the monthly loan payment wherever you go. They can rent the place out if necessary. Or if, God forbid, they divorce, they can use the proceeds from the sale of the house to pay off the loan.

If you end up in an assisted living facility, this loan payment will be counted among your assets, but some states, perhaps most, the original loan amount will not be counted against your spend down if, God forbid, Medicaid assistance becomes necessary.

Naturally, you will need an attorney to help ensure the all every i is dotted and every t crossed.

Just a thought.
This does seem to be a more common way to make these arrangements, and we are looking into it.
Thanks for your response!
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Old 11-26-2018, 02:46 PM
 
38,273 posts, read 14,957,601 times
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Quote:
Originally Posted by suz1023 View Post
This does seem to be a more common way to make these arrangements, and we are looking into it.
Thanks for your response!
I meant to say the loan payment will be counted as income, but the loan amount may not be counted as an asset in your spend down for Medicaid. If it should ever come to that.

It will cost some bank fees, but it isn't a lot.

It will protect you and protect your son and daughter-in-law as well.

If you own a share of their home and end up needing Medicaid at some point in the future, their home won't be caught up in that fiasco.

This is just a cleaner way of doing things.

When the day comes, they will inherit it all, it's just how you keep things fair and square until then.
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Old 11-26-2018, 02:59 PM
 
Location: Silicon Valley
18,130 posts, read 23,010,120 times
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I'm no expert, but I was wondering if you might check into giving them a 2nd mortgage on the home for the improvements. That way, your investment would have a lien against the property. So, if they sell it, you would be second in line to get paid out of the proceeds, after the mortgage. It would protect your investment to a degree. Of course, if they ended up in foreclosure, it's possible you wouldn't get paid.

But, I was basically trying to think of how to protect your investment in their house. A second mortgage might be an option, but I really don't know the details on how that would need to be set up, etc.

I think you'd need to avoid any appearance of giving them money, as there could be a gift tax involved, etc. I just have vague memories of hearing about these kinds of agreements and potential problems.

I think you need to talk to a tax expert. Maybe a CPA or a tax attorney would be better than a real estate lawyer.
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Old 11-26-2018, 03:04 PM
 
Location: Silicon Valley
18,130 posts, read 23,010,120 times
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Oh, and by the way - congrats on having kids who want you to live with them :-) That's lovely.
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Old 11-26-2018, 04:06 PM
 
Location: Philadelphia/South Jersey area
2,879 posts, read 1,408,873 times
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Wow, such horror stories. Does anyone remember when extended families living together was not uncommon?

Op, I grew up with my maternal grandmother my entire life. not sure if my dad had issues with it and I'm sure there was tension from time to time but my siblings and I loved it and stayed extremely close to my grandmother until the day she died.

good luck, it does not have to be horrible at all.
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Old 11-26-2018, 04:32 PM
 
Location: too far from the sea
19,871 posts, read 18,888,113 times
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Quote:
Originally Posted by eliza61nyc View Post
Wow, such horror stories. Does anyone remember when extended families living together was not uncommon?

Op, I grew up with my maternal grandmother my entire life. not sure if my dad had issues with it and I'm sure there was tension from time to time but my siblings and I loved it and stayed extremely close to my grandmother until the day she died.

good luck, it does not have to be horrible at all.
I heard bad and good. Bad more recently when someone went to live with their son and DIL and took care of the kids. All of a sudden DIL started screaming that she needed to leave. Luckily, she still had a (paid off) house to go back to.

Good was back in the day when, same as with you, gram lived with the kids after gramp died. My gram lived with one daughter and went on vacation when her other grown kids went on vacations with their families. She got lots of free vacations!
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Old 11-26-2018, 07:13 PM
 
4,135 posts, read 3,792,288 times
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Suz, this is not necessarily a good arrangement for you, even if done with a loan. If things go bad, what are you going to do, foreclose on them?

They could go to a bank, get a loan, build the addition, and you could pay them rent. But if you move out later on, they're stuck with an in-law apt that they'd have to rent out to a stranger to bring in income to cover the loan.

Probably the best thing for you to do is to move to a nice little rental apartment in a seniors complex, close to them. Keep it cheap, and you can still have money to travel with, especially if you invest the money that you were thinking of using to build their addition. That way, you can see each other more easily, and if you need help in the future, it won't be so hard on them. But you won't be dependent upon them, and you won't be living on top of them. Also, no stairs!
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Old 11-26-2018, 08:55 PM
 
Location: Location: Happy Place
3,697 posts, read 1,876,337 times
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Ackward. If not now, later.
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