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As an 85-yr old retiree, I began liquidating my assets when I was in my 70s. Recognizing that all life will eventually cease, I sold all my non-liquid assets and stayed in the stock market where I could liquidate whenever I needed cash. But before I did so, I consulted with my children on whether they needed my house. Since they have their own houses, they advised me to sell my house, since leaving a house to them could entail additional problem for them to sell. Their advice was to sell the house and invest the proceeds in the stock market so that I can continue to avail myself of cash whenever I need it, and that, upon my demise, they could be beneficiaries of my liquid assets. So, this is what I have done. Needless to say, selling your home means that you have to downsize into a smaller unit, like an apartment, and pay rent, or move into the abode of one of your children. Fortunately for me, I will be able to live out my life in the home of one of my children. It would be interesting to hear what some readers think about what I have done with my assets, and moving in with one of my children.
Feisal, thank you for sharing this. Part of my family is Punjabi, where it’s an accepted expectation that an older relative will move in with the family as they age. My cousin sister finds great comfort in knowing that’s her plan, and I suspect you’ll find the same.
Her approach differs from yours in a couple of ways. She hasn’t sold her home, which is in a trust for her grandchildren, and she keeps a large part of her portfolio in cash, which she enjoys spending generously on the family.
What strikes me is that both of your plans seem to rest on the same thing: knowing where you’ll be looked after. I’d echo William’s point about making sure your will and beneficiary designations are in order, and perhaps keeping a cash cushion so you never have to sell stocks in a downturn.
I read an article this week that suggested paying the child with whom you will live upfront— rent, food, care, etc rather than gifting a larger share of the estate. This approach may minimize later fighting over the estate. Made sense to me, and possibly something you might consider.
When my mother in law moved in with us we charged her a mutually agreed upon monthly amount for room and board. Knowing her low income and assets were we knew that if she had to go to a nursing home she would qualify for Medicaid to pay her expenses.
Before instituting the agreement we checked with the state of NH Medicaid program and they said as long as the amount charged was reasonable doing so would not affect her potential future eligibility. In the long run it didn’t matter as she stayed with us until the end. Others who are considering taking in a relative with limited income may want to check with their state’s Medicaid office as well.
You may have made a brilliant decision or you may have put yourself at risk. Not knowing anything about you or your family it’s impossible to say for sure.
Living with family members, especially as we age can be difficult. It can be very stressful for both young and old. It can strain a marriage.
Will you pay your child rent? Will that child receive a larger portion of your estate? How do the other children view your decision?
What other assets did you sell? Have you locked your living arrangements in?