Ensuring You Have an Equitable Arrangement in Place

I can’t say this enough…there needs to be a shared responsibility and equity in the home when you are considering a multigenerational living arrangement.

Take my situation as a lesson.

When we embarked on this adventure, I was newly divorced. My parents were struggling in their life. My dad was retired, while my stepmom was still working and making a significant daily commute as a result of the living arrangement my dad chose without considering her. There were a lot of pros and cons when considering sharing a household, but we all agreed the pros far outweighed the cons.

Considering my recent divorce, we agreed that it made sense at the time to get the best mortgage rates by putting the home in my parent’s name. That has turned out to not be the best long-term decision for all of us. You see in the past six years the housing market has boomed and as with most people, my financial status has improved as the years passed and I recovered from my divorce.

Fast forward to current life and I’m paying 50% of a mortgage that I have zero equity in. I’m paying 50% of a mortgage that I’m getting not credit for on my credit report. I have no rental history on paper. The reality is if both of them were to die unexpectedly tomorrow, I wouldn’t have a home or any recourse to protect myself. They have been resistant to draft legal wills to ensure I am protected and as many older people, they do not want to talk or plan for the future.

The fact of the matter is that I am not protected in any way in this arrangement.

If you’re considering a multigenerational living arrangement learn from my mistakes and make sure you have adequate protections in place for your financial future. It may be a little more expensive from the onset, but it will be worth it in the long run.

Multigenerational Living Today

I did a search on multigenerational living and was surprised to see a lot of content specific to real estate but not a lot else. The top article on Google was specific to home buying and the second one was a Washington Post article which gave me hope, only to see that hope dashed when I saw the article (again) was one specific to a real estate community designed for multigenerational living and not really about how to do it with success.

I’ve been part of an experiment in American, multigenerational living for almost 6 years now. I’m a cis, white female with a daughter that now lives on her own and attends college. USA Today reported in July 2020 that one in six Americans were living with parents, grandparents, or other relatives and yet, I feel like it’s difficult to explain the whys and the struggle it is.

Statistics show that multigenerational living is much more prevalent among Asian and Africa Americans and Hispanics comparing to white families which is no doubt, a result of decades of systemic white privilege.

“It was once viewed as a verboten topic that suggested a family wasn’t affluent enough to afford independent or assisted care for their elderly members or a separate apartment for a grown child.” REALTOR® Magazine October 17, 2021

My Multigenerational Living Story

In 2015 I had been divorced for about 2 years. My daughter, who was in high school, and I were living in our second apartment and the rent was already over $1,100 / month in the modest suburban area we lived in to keep her in her school district.

At the same time, my dad and stepmom owned a parcel of land in a rural town west of Fort Worth. My dad was retired but my stepmom still had a couple of years till retirement. She had an extremely long commute that, coupled with the stress at her job, was creating health problems. At the time, she had been diagnosed with Lupus. The wear on her health was too much and she had started living part time with her brother closer to her workplace. That meant, my dad was essentially unsupervised in a rural home where he had no relationships with neighbors and the home saw little traffic.

The last straw was a fall he took behind his house. It was early in the work week and while he had a cell phone at the time, it was in the house when he fell outside. None of us really know how hard he fell or how long he laid outside before being able to come in. He ended up with a fractured wrist and more than a few bumps and bruises. Our concern was that if he had sustained worse injuries, he could have laid in his yard for days before my stepmom returned from work on Friday evening. The time had come to make some decisions.

My parents had divorced before I was 10 years old. I had not lived under the same roof as my dad for more than 30 years. I tried to draw some clear lines about living arrangements so that this could be a livable situation. The first and most important thing was privacy for my daughter and I as well as them. I said it had to be a two-story home so that my daughter and I had our own space. My dad’s initial comment was, “I can’t get up and down the stairs.”

My response was, “That is exactly the point.”

So, we found a house that we believed would meet all of our needs. Because my credit had taken a hit during my divorce, we all agreed that we would get the best rate using my dad and stepmom’s credit and I allowed that. They also had the cash in hand for a down payment, which I did not.

In 2015, we bought the house for $180,000 with them putting down $30,000. The house appraised for over purchase price and now in 2021, the current market value of our home is approximately $280,000. Even if we sold today, they would get their initial investment back without a doubt.

The only common areas we really share are the kitchen and the laundry. The rest of the house is divided between spaces that are mine and spaces that are theirs. Since 2015, we have mostly found ways not to make one another crazy. We’ve also been able to help one another. In the first year or two, my retired dad was able to help me by helping with getting my daughter to and from school. I’m easily available to help my parents out on things like heavy lifting, tech support of all things electronic, and I’m sure dozens of other things I’m not thinking of at the moment. My parents have been able to share priceless time with my daughter and both them and her have memories due to it that are priceless. There are lots of pluses.

But there are also minuses. There are struggles in living with people in general. It’s always a dance of compromises. During a pandemic, it is hard.

I’m starting this series to help others that may be already in multigenerational living situations or that are considering them.

I’m starting this series to find myself a support group. If you find yourself living in a similar reality, please comment, email, join, and collaborate.