It is not uncommon for adults to move back in with their parents. In some cases, children move in to become caretakers for aging parents. More Baby Boomers are living longer than previous generations, and their adult children often need to take care of them. In other situations, adult children need to move back in with their parents for financial reasons such as a job loss or divorce. Sometimes, adult children simply never left home.
When parents pass away, an adult child living in the parents' home can cause friction if there are more children in the family. However, parents can prevent problems through some preparation and careful estate planning.
One of the major sources of tension that can occur between siblings when one sibling has been living with their parents is the children who do not live with the parents want the home sold immediately so they can collect their inheritances, while the child living with their parents still considers that house to be home. The child living in the parents' home has no right to stay in the home unless the parents made arrangements prior to their deaths.
One thing parents can do is arrange to give the child a life estate in the house so that the child can stay there for the rest of his or her life. Parents need to make sure that the child is able to pay for the taxes and upkeep of the house, however, prior to arranging this. Parents may also want to put the house into a revocable living trust.
If the children are in agreement that they will sell the house, some siblings argue about whether the child living in the home needs to pay rent while they wait for the house to sell. Parents can help avoid fights among their children after their deaths by having conversations with their children about what will happen to the house. They should also see an experienced estate planning attorney who can help them design an estate plan to carry out their wishes for their home as well as the rest of their assets.
Source: The Washington Informer, "Estate Planning 101: Living With Mama," Marlene S. Cooper, July 14, 2013