Estate Planning Concerns for Adult Children Living With Parents
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The numbers of individuals living with extended family have only been growing. Our North Carolina estate planning attorneys blogged about estate planning issues of the “Sandwich” generation – the large pool of Americans who are caring for both their children and their aging parents. There is a similarly growing rate of individuals in their 20s and 30s (“boomerang kids”) who left home for college, but came back and live at home with their parents.
Today, 3 out of 10 young adults live with their parents. Why are young Americans choosing to reside in their parents’ homes longer? Partly because they have little choice in the matter. High student loan debt and unemployment rates prevent young individuals and couples from affording rent or a mortgage, and in other cases the failing health of a parent results in the child taking on the role of caregiver. These individuals have another variety of estate planning concerns:
- Title. If an adult child is living in their parents’ home – what will happen when their parents pass away? If the title of the home is exclusively in the parents’ names and they have not created an estate plan that outlines how real property will be distributed, the parents’ property will be divided according to North Carolina intestate law. This means the property will be distributed among all surviving descendants. If the adult child residing in the parents’ home is one of three siblings, a forced sale may ensue in order to satisfy estate distribution to the other two siblings. This would leave the child living at home in a predicament with no place to
- Executor conflict. Have parents chosen an executor and have they informed their executor of their expectations? Sometimes parents think it is logical to choose the child living at home as an executor, but the decision should be based on the individual’s character.
- Long-term care and retirement. Adult children living at home who provide caregiving services for their parents may be sacrificing savings for their own retirement. Are other siblings contributing to these costs? In these instances, estate planning is not only important, but meeting with an elder law attorney can help families learn what North Carolina benefits for seniors are available to cover in-home care. Combine this with a review from a financial advisor and an adult child may be able to restructure funds to care for their parents and save for their own retirement.
