Five Questions to Ask Before Buying Your Parents’ House
I would like to know if a child was interested in purchasing her parents’ home while they are alive and still living at the property and the child wishes to move into the home with them could they do that without any problems?
Yes, this is certainly possible, but it raises a lot of questions, including the following:
- Will the daughter pay full market value for the house? If not, will this be fair to her siblings, if any?
- Will the daughter pay in cash or over time with a promissory note and mortgage held by the parents?
- What is the agreement on paying upkeep on the house and other living expenses? Will the parents pay rent?
- What are the parents’ rights to stay in the house and how will those rights by guaranteed? What if the joint living arrangement doesn’t work, will the parents have to move out?
- What happens if one or both parents start to need care? Will the daughter provide it? Will care providers be hired? Who will decide when and if the parents have to move to assisted living or a nursing home?
I’m sure that you can think of another five issues that need to be discussed. In addition, there may be tax and Medicaid planning issues involved with the sale of the house. As I discuss here, it’s important that the family discuss all of the questions and write down the agreement. An elder law attorney can answer any legal and tax questions around the transaction.