The following article was supplied by Tom who writes about mother-in-law suites and is the editor of In-LawSuite.com. A website dedicated to caring for aging parents and elder care solutions.
As baby boomers face the management of their aging parents’ well-being, the primary issue is the happiness and safety of mom or dad. Happy and safe tend to be trade offs, as most parents would be happiest with their current living situation but safest living under the oversight of another. This may mean some level of caregiving in their own home, but let’s focus on the choice between moving into an adult child’s home versus a nursing home.
Managing money wisely
First and foremost, the priority should be managing your parent’s money well. One never knows the expenses that will be incurred as their health declines, and you want to be able to afford the best care possible for them without jeopardizing your own family’s financial security.
The cost of nursing homes varies widely, depending geographical location and level of care. Some states have an overabundance of nursing care facilities and the fees will be relatively low, while a major metropolitan area with high demand for such facilities will command a higher price. So the annual expense may be $25,000 or it may be $125,000. The national average is estimated around $70,000.
Is a Mother-In-Law Suite a better option?
So is this money better invested in remodeling your home to accommodate your elderly parent? A mother-in-law suite is ideal, as it affords privacy for everyone and gives your parent some independence as well. In general, a mother-in-law suite is considered to consist of a bedroom, bathroom and small kitchen area, with a separate entrance. The suite should be located on the first floor of your home; if stairs are not an issue now they could become one in the future, however there are many new basement remodeling solutions available to help you get the most out of the valuable basement or lower level space in your home.
Construction costs also vary widely based on region, and the final cost will depend on many factors. Local contractors will be able to give you a cost per square foot estimate, useful for initial planning. Be prepared to give them an idea of your finishing plans; you will want the addition to match the quality of the rest of your home. It is safe to say that a reasonably-sized living space can easily cost $50,000, and twice that or more in high-end neighborhoods.
One thing to remember is that when you go to sell your home, an in-law suite could narrow your potential market to buyers in need of this arrangement. It may be another couple with an elderly parent, parents with a boomerang kid, or some other uncommon living arrangement. Buyers in need of such an arrangement will be willing to pay for it, but it may mean your home will stay on the market longer. Having said that, the addition of a Mother-In-law suite could be the very thing that makes your home sell fast because it is in a niche market that will continue to grow and may grow faster than anticipated due to the new uncertain Health Care situation currently in the US. If you feel that it could hinder the sale of your home, one option is to convert the space into a more conventional configuration, such as a family room or rec room to appeal to a wider market, although this may be difficult if your home already has a family room. Another option is to limit the in-law suite to a bedroom and a bathroom; an addition may not even be needed in this case. Regardless, it is reasonable to assume the value of this extra living space upon sale of your home will be approximately 60% to 70% of your initial investment.
With a mother-in-law suite, you have the potential to preserve your parent’s assets, either for their future care or for your inheritance, and recoup some of your investment upon sale of the home. But there is the financial burden of medical and caregiving costs to consider as well. A family member may be able to provide all the care mom or dad will need. If not, be aware that in-home care is not covered by insurance or Medicare, and the cost of full-time care is comparable to that of nursing homes. Furthermore, many nursing care facilities do not accept Medicaid, and those that do often limit availability to existing residents..
It is important to think through all the implications of nursing care for an elderly parent. An attorney specializing in elder law can be helpful, as can a Certified Geriatric Care Manager. Both of these professionals can assist you providing the best possible care for your parent while preserving family assets.
Have you built a Mother-In-Law suite instead of choosing a nursing home for your loved one?
{ 4 comments… read them below or add one }
We built a small guest house on our property for my dad when he needed daily supervision. He lived with us for 4 years before he died and it was a blessing to all of us. He required minimal attention in the beginning and maximum attention for the last year. We kept him home with us even when he required significant nursing care. You did not mention the Medicare Hospice benefit which we used to provide his in-home nursing and caregiver services for the last few months, including some respite care. Our whole family would agree that it was the best arrangement, not easy by any means, but definitely the best.
Great article but I want to make a few observations:
1. A in-law suite is very different from a nursing home. A parent could live in for many reasons, child care, finances, general help needed etc. However, each state has specific criteria for nursing home admittance. Usually this entails help with ADL’s (activities of daily living), need for oxygen, need for specialized care, dementia etc. A parent that just needs general help probably would not qualify for a nursing home. At that point it becomes either stay home with help from others, live with others or reside in an assisted living facility (not a nursing home). Assisted living facilities do not take medicaid or medicare. A nursing home takes medicare if applicable when first admitted and does take medicaid if beds are available. Many people enter nursing homes on private pay or medicare then transition to medicaid after a spend down of assets.
2. A family must go into caring for a parent with their eyes open. A parent with dementia can require 24 hour constant care an can deplete family resources quickly even if cared for at home or child’s home. If a parent becomes combative it can be more difficult to find a facility to care for them.
3. It must be a family decision to consider which way to go with a parents care. Most of the care should not fall on one family member. Often the best decision is a nursing home or assisted living facility because it allows family to lead their lives, know that the parent has all necessary medical care and allows the family to visit and enjoy time with their parent without the exhaustion of daily care.
There is not one right answer. I agree that it is wise to consult a professional to see all your options. In the money realm it is important to know that you cannot hide assets. Medicaid goes back 5 years in records to see if any money or assets have been transferred to others.
The most important thing is to have this conversation with your parents before the need arises. A will, medical power of attorney and others plus the services of an elder care attorney can do much to lay the groundwork for a smoother transition if need be.
I am sorry this is so long but I just wanted to add to your excellent article.
Mom lived with us for five years. We had been balking at the decision to put my mom into an assisted living situation for two years after her doctor strongly suggested it. We hadn’t asked for his counsel, but he was concerned for our well being. My mom had Alzheimers and had started to become agressive. She had already reversed her sleeping schedule and had done a couple of dangerous things. If your three year old says “no” you have options, when it’s your 80 year old mother, you don’t. We don’t own our home, so any big,useful modifications or big equipment (wheelchair ramp, handicap access tub, etc.) were not available to us. So after alot of prayer we told her we couldn’t care for her at home anymore. She argued a bit saying she wasn’t really any trouble. But in God’s great kindness Mom adjusted really well to her new place. Now that she needs even more care (Hoyer lift, special foods, medicine monitoring, diapering) the Lord opened up a really great nursing facility where the staff loves her to pieces.
An option we considered was E.C.H.O. housing. That might work for a family with their own home and property big enough to handle another structure. It’s basically a specially designed small handicap access home on a temporary foundation. You’d have to check with local zoning laws, but since these homes are removed after the need no longer exists, there is a some flexibility with how they are viewed. There may be a resale market for them. We never got that far in the research, but the idea seemed good for a still fairly self suffieint elderly relative. You could care for them without them feeling like you’re “hovering”. And resale value for your main house would not be affected.
I have been searching for a cottage or mobile home or Katrina House we could move in for my Mother-in-law… I would LOVE to know where to get more information on a ECHO home!! Please, share any info you can!!