I just read an article in the Real Estate Section of the Sunday New York Times ( June 30. 2014) written by Constance Rosenblum , the City Editor. She makes a very good point that all adult children need to discuss with their elderly parents. What do our elderly parents believe is the future of their family home?
For many of our parents, their home is probably the most valuable asset they own. It is the last thing that they want to give up. But they need to realize that if they leave it to their children to decide, after they are gone, it can often lead to family rifts that last for decades.
One of my wife’s friends took care of her parents the last few years of their lives. She lived with them full time and dedicated her life to taking care of them. When they died they left their home to her in their wills. Her brothers were shocked and extremely upset that they were not consulted in this decision. As a result they have not spoke to her for years.
Ms. Rosenblum makes several very valid points in the article:
- Take a few basic steps early on. This will avoid problems in the future
- Start early to discuss the future of your parents’ home with them, while they are both healthy.
- Begin the conversation in a non-threatening setting. Consider sharing with them the article that appeared in the NY Times (or this blog)
- Balance Competing Issues. Don’t let taxes and financial concerns be the only motivating factors. Consider if the home still works for your parents and will as they age.
- The future of the family home becomes more complicated when several children are involved. Each has their own agenda. Involve everyone in the discussion.
In my book, “Can We Talk? A Financial Guide For Baby Boomers Assisting Their Elderly Parents” I have a chapter on transferring real estate from your parents which includes such ideas as the Life Estate and the Qualified Personal Residence Trust. Please read this chapter to learn more.