ADVERTISING: ADVERTORIAL - Estate planning when an adult child lives with you

It's more common than ever. Adult children returning home after college, staying through early career years, helping care for aging parents, or living with family because of a disability. Multigenerational households are on the rise across Idaho, and for good reason — they work for a lot of families.

But if an adult child lives in your home, your estate plan needs to account for that. What looks like a simple living arrangement today can quickly become a complicated legal and financial problem if it isn't addressed in your documents.

Here are the key considerations to think through.

What Happens to the House?

This is the central question. If your adult child is living with you when you pass away, what are your intentions?

Several options exist:

• Leaving the home to the adult child outright — the simplest approach, but may create fairness issues with other children

• Granting a life estate or right to occupy — the adult child can live there for a defined period or for life, but the home ultimately passes to other heirs

• Placing the home in trust — a trustee manages the property for the adult child's benefit under terms you set

Each option has significant tax, control, and family-dynamics implications. A life estate may feel like a middle-ground compromise, but it can create tension between the child living in the home and siblings waiting for their share.

Balancing Fairness Among All Heirs

If you leave a home — often the largest asset in an estate — to one child, think carefully about how to treat your other children.

Options include adjusting their shares of other assets (retirement accounts, life insurance, investments) so the overall distribution feels fair, or requiring the child who receives the home to buy out siblings' interests over time (though many complications can arise from that approach).

Equal isn't always fair, and fair isn't always equal. What matters is that your reasoning is clear so surviving family members understand your intent and no one believes someone else is taking advantage.

Special Considerations for Adult Children with Disabilities

If your adult child lives with you because of a disability, the planning stakes are significantly higher.

A direct inheritance — including a home — can disqualify your child from means-tested benefits like Medicaid and SSI. A special needs trust/supplemental needs trust allows you to set aside resources for your child's care, including housing, without jeopardizing those benefits.

You should also coordinate your estate plan with any guardianship or conservatorship arrangements already in place, and think carefully about who will serve as trustee, successor caregiver, and ultimately the person your child will rely on after you're gone.

If Your Adult Child Is Your Caregiver

Sometimes the roles are reversed — your adult child lives with you because they're helping care for you. That likely needs recognition in your plan.

You may want to compensate them through your estate, especially if they've stepped away from a career or delayed their own financial goals to help you. Idaho allows caregiver compensation arrangements, but they should be documented properly — ideally with a written caregiver agreement during your lifetime rather than handled informally at death. Again, keeping everyone at least generally in the loop about such arrangements is usually best to avoid suspicion and resentment after your death.

Communicate Your Intent

Whatever you decide, don't let your family guess. Ambiguity is where disputes are born. While I have worked with some families where there were good reasons to keep people in the dark – that is rarely the case, and usually leads to disputes.

Sometimes writing a letter of intent explaining your reasoning is a good approach – but talk to your lawyer about it first. It isn't legally binding, but it gives your family context — why one child is receiving the home, how you expect housing transitions to work, and what you hope for everyone's long-term wellbeing.

The Bottom Line

A multigenerational household is a gift to everyone involved, but it introduces estate planning wrinkles that standard documents don't address. If an adult child lives in your home, your plan should reflect that reality. Talk to an Idaho estate planning attorney to make sure your documents protect your child, your other heirs, and the home you've built together.

My law firm is currently offering free telephonic, electronic, or in-person consultations concerning probating estates or creating estate planning documents.

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Robert J. Green is an Elder Law, Trust, Estate, & Guardianship Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, powers of attorney, guardianships, Medicaid planning, or VA Benefit planning, contact Kootenai Law at 208-765-6555, [email protected], or visit www.KootenaiLaw.com.

This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.