With the state of the economy, the low unemployment rate for graduates, and the general cost of living, many children are continuing to live with their parents long after they turn eighteen. Having an adult child live with you can simultaneously be a benefit and a burden. Children at home can assist with the tasks that it gets harder to complete as one gets older. They can care for a house and its maintenance; they can care for you during times of sickness and in old age.
Yet, an adult child living at home can also be an encumbrance. They may be unemployed and unable to make a living on their own. Cases such as this saddle parents with an extra financial burden. Unable to financially support themselves, adult children may continue to depend on you for living arrangements, while their siblings have moved out and set up their own households. When this occurs, it is even more important to consider the future of your estate.
According to an article by The Washington Informer, when parents pass away and leave adult children living in their house, unique complications may arise, especially if there are other children in the mix who live elsewhere. If multiple siblings are the beneficiaries of their parents’ estate, often times the property must be sold in order to split the inheritance. This can cause friction when one or more of the siblings consider the house their primary residence.
Without it specifically noted in the estate plan, those living in the house would have to buy out their siblings if they would like to continue living there. This is likely impossible, given the reason for them living there in the first place may be a lack of financial security. In these cases, the house will likely be sold and the money split.
This can lead to tension between siblings or bitter and unfortunate law suits between family members. To avoid this scenario, parents should discuss their estate plan with their children, clarifying how they would prefer this situation to be handled.
In order to best navigate this future turmoil, be mindful of who is made Executor of your estate. Do not necessarily choose the live-at-home child out of convenience. Instead choose someone with business savvy, who can work through any remaining issues.
If parents have adult children living at home, include explicit instructions for this scenario within one’s estate plan. If parents want the child to be able to continue to live in the home, it would be smart to indicate how the property should be up kept in regards to taxes, mortgage payments, utilities, insurance, etc. Without doing so, the house could be lost regardless of one’s intentions.
If you have adult children sharing your home, be sure to create an estate plan, or update your existing estate plan, to expressly indicate how you would like your property handled. Fields and Dennis can guide you through the process of estate planning so that your wishes are upheld and your family can avoid any unnecessary turmoil.