“Hey, Mom and Dad, can I borrow $100,000+ today?”

by Maribeth DeGuiseppi

Role reversal in families often happens when we aren’t ready for it.  Mom & Dad can’t live on their own and take care of their home anymore, and it’s the responsibility of the children to figure out where the best place is and how they are going to pay for it. It’s not easy like when you were young and asked your parents to borrow money. In most cases, it is a substantial amount of money. Depending on the health or financial situation, will determine if the children are able to accommodate moving mom or dad in with them or if an assisted living/nursing facility is the best route.

No matter what the answer is, the biggest question is how to pay for either of these choices. 1. Do you make renovations to your existing home? 2. Do you sell your home and look for a new home with an in-law suite? 3. Do you find an appropriate facility?  No matter what you must sell your parents’ house.

Option #1 Making renovations to your existing home.  If you live in a community, with an HOA or not, you need to be sure the proper channels are taken to know if this is a viable option. What are those channels?  Contacting the HOA, Community, Township or City you live in is the first step.  Knowing if you have enough land to expand.  If you do, then finding the right contractor who will do the job up to the Code of the Township/City and applying for the proper permits is the next step. Then how do you pay for this?  Do you need to re-mortgage your home? Will your parents give you some of the money from the sale of their home to finance this? This is where your Realtor can be a big resource for you and help guide you with how not to over-improve your home for future sale, sharing a few names of contacts that they’ve done work with in the past. Making sure they are licensed and insured for your protection.

Option #2 Selling your home to find one that already has an existing in-law suite or extended family option.  You’ve done your homework to realize your current home cannot accommodate substantial renovations due to the Community or Township rules and regs so now what?  Let’s start looking for a home that already has what we need.  In today’s market, this is not an easy task as right now inventory is low and finding the right fit can be time-consuming. Time which is something you don’t have. Selling and buying can take several months to accomplish in any market.  Let’s not forget we still have to sell Mom & Dad’s house.

Option #3 Putting your parents into a Senior Living Facility. This process is usually very stressful, painful and emotional all at the same time.  Finding and knowing the right facility, being able to afford the care given at the facility, and your parents being accepting of this option. One of the biggest questions you should have when shopping these facilities is what if I run out of money? How much money do my parents have to live there before their home sells which is going to be the biggest asset people have to pay for this type of care.  Some facilities will take all the assets you have and once it’s gone so are you.  Now what?  Since option 1 & 2 didn’t work out now, another option is moving Mom or Dad to a state-funded facility. The process of enrolling is tedious, and the State wants nothing short of your first born to be sure there isn’t any hidden money they can tap into.  The state’s research process of your finances can go back as many as 5+ years.

In short, there is much to consider as we age, and the bigger question is how do I know what is best for my Mom & Dad?  Every family and circumstance are different for everyone, so there are no set rules.  That’s where hiring the right real estate agent is going to be one of the best resources to help you through this process.

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