My mother and father can no longer live on their own, they sold their house and joined us in a house we are currently renting to determine next steps... Traditional Assisted Living will kill them and my husband/I cannot afford to buy the rental house on our own. The logical step to purchase the house jointly...any suggestions? Please help!
How old are your parents? What are their impairments that prevent them from living on their own? How much care do they need?
What is their financial status? If they just sold their house I imagine they have at least that money in savings. Do they receive a monthly income?
Having these answers would be helpful in figuring out how to answer you.
What if your parents paid a reasonable amount for rent and food, etc. and you put it away until you had enough for a downpayment to buy the house on your own? And then you continued to use that income to help with the mortgage payments?
If your parents are financially able to pay their own way, they should.
While it isn't what anybody wants, it really will not kill your parents to go to assisted living. Really. And it is wonderful at this point that they don't need to consider it, it is possible that some where down the road one of them will need care that is beyond what can be provided in a private home, or that you will need to bring in in-home care for one or both of them. If they have their assets tied up in equity in your joint home, then what? What if they need to get their share of the equity out for their own needs? Where will that leave you?
I don't know. But it makes a difference if they are in their late 60s or early 90s, so I hope you will give us more information.
Also do not let them buy the house and then put it only in your name, this would be
considered a gift by Medicaid that would have to be accounted for and they would
be penalized for it. Medicaid has a look back period. You never think that your parents might have to apply for Medicaid, but a stroke , a massive heart attack can
really do a number on finances, and if a parent is bad enough you might have no
other choice than to put them in a nursing home. You would probably need Medicaid to pay for this. Nursing homes generally cost $3600 and up per month.
Maybe a retirement community for them would be a choice.
Where I live there is one, and they pay a set monthly amount for an apartment and three meals a day, all utilities and cable, and a maid once a week. It is like an
apartment community, just with a little more.
The retirement communities are just like above. They retain their independence by having a private apartment, but the little
extra help like meals in a dining area(think like a cafeteria) maid, and transportation
to grocery stores, shopping, and doctors are sometimes the only extra help they really need.
I also made sure the deed was in joint names with right of survivorship (JTWROS). This was important, so that upon Mom's death, the house passed automatically 100% to the daughter's name, avoiding both probate and the state's claim for Medicaid paid out for the mother's care.
If it gets to the point where your Mom needs care in order to avoid going to the nursing home, there is a federal law that says that if you take care of your parent for at least two years immediately before they go into a nursing home, and your care enabled your parent to delay needing nursing home care, they can transfer their house to you (or their interest in the jointly owned house, as the case may be) without any gift penalty.
Finally, consider a personal services contract, where you care for the parent in exchange for payment. Again, this avoids gift treatment of the money coming to you, though of course it is taxable income to you.
although they might be 60 now, they are growing older and the likelihood of them needing their assets for some form of care is more likely than not; their assets should not be tied up with you because that will adversely effect you!
someone may tell you to buy the shared home but to use desginator such as tenants in commom or "joint tenants" or other real estate names, but it still comes down to you cannot sell 1/2 of a house...goggle this topic and good luck to you
I believe that K. Gabriel Heiser's answer is accurate. It sounds like a good plan if all parties get along. There does need to be careful consideration of future legalities, e.g. choosing POA or guardian. I also would worry about what would happen if there was a dispute and one member moved out of the house. Would you be able to purchase her share of the house if that happened?
I just know it ended up costing a bundle of money for me.