ArcaMax

Q: I read your article on multigenerational living and found it incredibly interesting. My family and I are planning a similar multigenerational living arrangement by adding on to my parents’ house. We are located in Colorado and hoping to find both a financial advisor and a real estate attorney to guide us through the process. Can you give us any insights on what we should be thinking?

A: Before you start spending money on an attorney or a financial advisor, you need to think through what you want to do, how you’re going to do it, and who is going to finance it. What you’re talking about entails a significant amount of time and treasure and can make life difficult if there are other family members who might be concerned about a someday inheritance.

Certainly, you have a possible location for your multigenerational home — your parents’ house. However, the first question you should ask is whether the renovated home will meet everyone’s needs now and in the future. You’re already planning an addition for your family, but consider that you may also need to make changes to the home to accommodate your parents as they age.

You need to start this process by conceptualizing how you and your parents would live together. Will local zoning and building regulations allow you to expand the home? If so, by how much? Is that enough to add on a first-floor bedroom and bathroom for your parents? Will you also need a space for an outside caregiver? Or to widen doors and reconfigure areas to allow for wheelchair access, if it’s required someday?

These questions need to be answered early in the planning process. If local zoning codes won’t permit you to expand or change the home as you’d like, you may need to rethink staying in this home and find a different location.

Once you’ve determined that you can proceed with your general concept of expanding, reconfiguring or changing the home can work, you’ll need to get a general idea of what it will cost. You might find that you’re able to add onto the property, but doing so will be prohibitively expensive. Or, the end result will create a white elephant of a property that’s unsalable in the current neighborhood.

Once you determine that your local laws allow you to modify the home as you’d like and those changes are within your budget, you can start planning the work. You’ll need a good contractor and possibly an architect, depending on the level of work. You should also have a good estate planning attorney. You and your parents will need to discuss how you’ll share expenses for the home, and whether your contribution warrants an ownership stake in the property. You should also discuss what happens to the home when your parents die.

You also need to document the arrangement you’ve come to. This might be a partnership or you may be able to get it done with wills, living trusts or other documents. This might sound like overkill, but if you have siblings, it would be prudent to have it all in writing. Things happen, and you don’t want to be in a situation where you’re caught unprepared and your siblings start pointing fingers.

In terms of finding a good team, you’ll want to talk to friends and relatives for good recommendations on attorneys, financial planners and contractors. You could also speak with a local real estate agent, if you or your parents know one, and ask for referrals. Make sure you check references and check out any complaints online. If you’re still stuck for recommendations, talk with your tax preparer as well as neighbors who have had work done recently.

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(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, a financial wellness technology company. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)

©2024 Ilyce R. Glink and Samuel J. Tamkin. Distributed by Tribune Content Agency, LLC.