I am recently retired (divorced) and my elderly 89-year-old father asked me to purchase his house. He doesn't want to live alone anymore (mother is deceased) and doesnt want to go to assisted/independent living. He also wants to maintain or increase his assets to give to his children upon death... very important to him. I cant afford the entire house so was thinking of purchasing half the house and then we would split the house expenses. I would live with him and help him out as needed, This would give him around 450k in cash to invest and also allow him to cut his house expenses in half. He has long-term care insurance so I could hire an aide if I need assistance, or if he becomes to much to handle I could move him to a nursing home. Since I am paying market value for 50 percent of the house I dont think it would impact his medicaid eligibility if he needs it in the future. Thoughts?
What do YOU want out of your post divorce life?
For me, the first couple of years after my divorce were about learning to be self sufficient and getting to know what I wanted out of life.
It sounds like dad doesn't have a lot of assets? Why is that? What do you know about his financial literacy and spending habits?
What is your relationship like with dad? Is he easy going? Or is he going to freak out when he doesn't know where you are after dark?
How will he feel about you bring people home? Will half the house REALLY be yours?
I do not know the implications of this arrangement should he need to go to a nursing home and you want to remain in the home , check with an eldercare lawyer who knows Medicaid on that . My guess is they may be able to put a lien on his half , so you could possibly end up selling anyway to pay the lien .
You do not mention if he would give you POA. If he does not and he refuses to hire aides ( for whatever reason ) you will be stuck doing all the care . Even with long term insurance your father may decide he does not want strangers in the house . It’s very common .
Without POA and With him still being an owner of the home, it would be very difficult to get him out of his own home should you want to place him in a nursing home and he refuses.
Bad idea . You could get stuck for many years isolated in a situation that is not the rosey easy plan you have laid out here .
Dad is selling you a bill of goods to stay out of a facility . And YOU are paying him $450,000 to take care of him ? That’s backwards . He should be paying you or GIVING you his house to take care of him . But even that you would need to check with a lawyer on for the Medicaid lookback aspect.
Do yourself a favor , get your own place . Dad should sell his house to pay for assisted living rather than put that burden on you . His money and assets should be used for his care. There is no such thing as inheritance until someone is dead ( if anything is left ) .
If leaving an inheritance is so important , your Dad could look into an irrevocable trust . But at his age it’s likely too late for that. There is a 5 year look back should he apply for Medicaid.
YES! Totally backwards. Your Dad already doesn't value your time and efforts...and whether or not you have a life of your own, post-divorce.
A pre-condition (dealbreaker) would be for you to be his PoA for finances and medical, or financial at the minimum. Plus he would need to sign a Pre-need Guardianship document naming you as his chosen guardian.
And I would not have him own half of "your" house. You are basing this plan on the person he is now, but even if he's healthy for his age currently, the longer he lives the higher the odds that he develops memory and cognitive deficits. This would be a whole nother relationship, especially if he becomes stubborn, uncooperative, paranoid and shadowing (all features of dementia). Do you really want to gradually become his 24/7 caregiver? Sometimes seniors fight having aids come into their homes. Do you want to become his full time entertainment committee? Lose your social life? Never be able to really date?
His savings is not for giving away to others at this point. It's to pay for his care, which he very likely will eventually need (aids, Adult Day Care, medical) if he's going to "age-in-place". Does he *never* want to go into a facility? This inflexibility will be a problem at some point. Never promise this to him. I tell my Mom (who lives next door to me) that the minute she's unsafe or 100% uncooperative or I'm overwhelmed or burnt out, I will transition her to a facility. She's already been to visit it and sees it's nice and 3 miles away. My MIL is there, too.
Don't assume anything about what his LTC policy will and won't cover. They often have lots of hoops to jump through to get what you need.
Do you want to manage the property when he can no longer help? It's very expensive to hire out nowadays and labor is not as plentiful as in past decades.
Will you have the funds to pay for 1/2 the property taxes and homeowner's insurance? In my state those are squeezing out many people from their lifelong homes.
For Medicaid, there's a 5-year lookback on the financial portion of the application. His influx of cash from his house sale will impact his eligibility. If he starts "gifting" money to his kids this may disqualify or delay his getting it.
Also in most states Medicaid only pays for LTC which means he'll have to be bedridden and needing LTC as assessed by a doctor. From what I've read on this forum, getting Medicaid to pay for aids 100% 24/7 in your home is not easy to do. Make sure to talk to a Medicaid Planner for your Dad's state of residence before making assumptions because this is the part that could really be a problem for you, in terms of forcing you to be his 24/7 caregiver.
Please read other's posts on this forum about Burnout and what happens when well-meaning adult children try to appease unrealistic elders who are romanticizing their sunset years and treating that child like a spouse/servant. Caregiving can be a very thankless and draining job. Don't assume your siblings will help. Don't assume they won't get suspicious about how you're spending their inheritance on your Dad's behalf. Many a family has flown apart over money. Money finds the hidden cracks in relationships.
And if your Dad tries to bamboozle another sibling into a similar arrangement, have them read your post answers, and do not promise to "help".
Go into this with your eyes fully open.
I agree with the others, this will be a bad idea, living with and enmeshing your finances with a family member. IMO this never works long term.
Take your money, buy yourself a little home or rent for awhile until you get your new life together.
Give this idea some curing time, do not jump into this feet first, you will regret this decision in the future.
Good Luck with whatever you may decide!
Couple other details.:
I am a divorced male and will have POA
My dad has a net worth of $2.1 million including the house, so he probably will never qualify or need Medicaid. I would also purchase house at fair market value to avoid the Medicaid look back period.
He is easy going but can be stubborn. We get along ok.
I also do not want to be a full-time caregiver, Just retired and want to do a little traveling while I still can. He claims he will use his LTC to hire assistance as needed....sounds like this may not be feasible.
I would live in a large private basement in an upscale neighborhood so privacy is not an issue. His house is much nicer than my townhouse.
I really think Assisted living is the best option as do my siblings. Hopefully I can persuade him to go this route.
40 years ago my hubs and I went into business with another married couple. The corporate attorney took great pains to force us to think about a failed partnership and how we'd get out of it. Literally within 1 month we discovered one of the partners was a cocaine addict and alcholic and we had to oust him (and it was NOT pretty). My son is currently in a dicey business partnership with his best friend. No matter how good your current relationship is with your Dad, if he decides to not cooperate, headaches will ensue.
Also consider that people with dementia lose their sense of boundaries and filters. They lose empathy for people, even the ones they know and love the most. Any girlfriend will wonder if she marries you, will she be assumed into caregiving you Dad (also a very common theme/problem on this forum).
Also, your relationship with your siblings will be a thing. You won't be able to control any grudges, suspicions and pettiness from other them (and their spouses) and it's a common theme on this forum.
All paid care is very expensive nowadays. 2.1 mil may sound like a lot until you consider that AL and MC in good facilities can cost $8k or more a month. I have an Aunt who will be 105 in May, living in her own home with a minimally paid cousin helping her part time. She's been paying for help for the past 15 years. She is about to outlive her savings.
Maybe NONE of this will happen. Maybe your Dad will be lucid until he passes away peacefully in his sleep, pain-free. This is what we all hope for. Plan for the worst, hope for the best.
For me, best option, since he has LTC insurance, may be to draw all his assets into a Trust. He could make you successor Trustee for distribution after his death, but also to act as his Trustee in life if he becomes, in the opinion of his doctor, disabled mentally due to dementia. You would at the same time make a "shared living expenses" contract and could see if you can live together easily. Your payments would go into his Trust. You would enumerate the amounts of time yearly you would re-evaluate your living choices as "roomies" and if it is working for both, that's great; if for only one of you it isn't.
You may decide to move on, have a family. In that case, I think many women would not choose to move in with you AND your Dad.
You are right, there's a ton of stuff to consider here. I wish you the best and am so glad you are thinking it out and talking it out. If your father has not appointed a POA and made a good solid trust then it is more than high time to do it now with your help. Discuss with any siblings, as well. Try to get all on board and in agreement BEFORE things get set in stone.
Are you a trustee?
When my parents were younger, I never would have guessed how self-centered they would become. And, even though they hated being caregivers for their own parents, that they would then turn around and expect it of me. Both of them, including dad's wife, think everything revolves around them, and they think that I OWE them.
I have benefited greatly from the advice given on this forum. These wise people who have been through some very hard times with their elders have gone through every possible scenario that one can imagine.
Please listen to them and DON'T go along with this insane plan of your dad's. Don't pay $450,000 to buy half of his house, and please don't move in with him or you will live in misery in that house for many years.
People live way too long these days. You could get into a caregiving role that will completely take over your own life. Don't let yourself be put into the role of a servant. It will only lead to resentment and heartbreak.
The local Area Agency on Aging may offer this, or you can arrange it through his doctor. Make sure that if he states he can do a task (cooking, dressing, meds) that he DEMONSTRATES the ability to actually perform the task.
I would talk to an elder lawyer first. I can see the advantage if you want to travel. Dads house would be a home base. Is the house set up so you can have your own section and privacy? Can u afford a Mortgage? It really surprises me when people retire in their 60s, they still have mortgages. I can see the advantage of buying Dads house, you maybe able to make a sizeable profit in the future. But realize by buying it you are then responsible for the taxes and upkeep.
It could work if you both go into it with open eyes. For you to travel, Dad has to hire those aids to care for him. I would put it all in writing and both sign. You must establish boundaries from the beginning.
I ran into that when I was helping my parents who were your Dad's age. Due to the fact I was now a senior citizen myself, my parents still saw me as that 20 year old who could do anything. That elder-care journey with my parents was very stressful.