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Multigenerational Households – A Long Term Care Solution? Maybe

An article in last Sunday’s business section of the Star Ledger, New Jersey’s largest daily newspaper, caught my attention.  It discussed the rising trend of multigenerational households, highlighted by quotes from a few families in which adult children modified their homes so their parents could move in.  Looking at it from my perspective as an elder law attorney and knowing from my own experience how unprepared most people are when it comes to long term care, the article left me with many questions.

 According to statistics cited in the article in 2008 one in six households were multigenerational, up from one in eight 30 years ago.  For one family interviewed, the reasons were health related and financial.  Dad had a stroke and was forced to retire.  Social Security and disability payments aren’t enough to pay the costs of maintaining their home so daughter and son-in-law built an addition to their home.  Although not entirely clear, it appears that the children are paying for the addition and the parents will sell their home and live rent free with the children, providing childcare for the grandchildren.  The article’s author comments that with rising nursing home costs baby boomer children are increasingly providing care for their parents in their own homes.

 But, is that realistic in this case?  With 2 toddlers, will daughter be able to care for her dad if he needs nursing home level care?  Probably not.  And is their concern about spending all their money towards a $100,000 plus nursing home bill solved by selling their home?  Not at all.  Actually, they may have to spend down more by selling their home and living rent free with the kids than if they still owned the home.  So does that mean the decision they made is the wrong one?

 Absolutely not.  But what it tells me is that they have started to think about and address a very real problem but haven’t gone far enough and thought it all the way through.  I certainly don’t have all the facts here.  But, it might make sense for the parents to buy into the home, either now or later.   That depends on how much savings they have, who will need long term care, and when and where it will be administered.  The possibility of needing government benefits down the road certainly must be discussed because what choices the family make now could very well impact what is available to them later.

 Maybe this was all discussed.  But, experience tells me it probably wasn’t.  Mom talks in the article about having fewer expenses and being able to go on vacations and enjoy life.  And that is important.  But, what I see so often is that people don’t really look closely at what long term care means, day to day.   It means a downward decline in health and upward trend in expenses.  So you can’t just look at where you are now and come up with a solution that solves today’s problem.  You have to expect your life, in the next 10 to 20 years, to look very different than it does now and plan for that.  That’s what real long term care planning is all about.