Many seniors who want to continue living in their own home but don’t want all the headaches (and back aches) of mowing the lawn, cleaning the gutters and shoveling snow are moving to senior communities. These are often known as 55+ communities because that’s typically the minimum age (although this varies) of a community’s residents.
If you own a home in one of these communities, even if you’ve downsized considerably from your previous residence, it may still be your most valuable asset – or at least one of them. How will this home factor into your estate plan? Of course, you can designate that the home be sold and the proceeds returned to your estate to disburse to your beneficiaries or to one particular beneficiary. But what if you have an adult child who would like your home? Maybe they’re not far off from their senior years. The same things that appealed to you about the community may appeal to them.
It depends on the community rules
If your child (or their spouse) hasn’t reached the minimum age for the community when you pass away, can they still inherit and live in your home? You’ll have to do a bit of research to find out. Many communities follow an 80/20 rule. That typically means that 80% of homes must have at least one occupant at or above the minimum age. Usually, communities don’t reach that 20% maximum of homes with younger occupants. Therefore, if your community follows that rule, your child will probably be able to move in – unless they have kids under 18 and there are restrictions against minors.
The best way to find out what your community’s rules are is to consult the covenants, conditions, and restrictions (CC&Rs). That’s the massive document you received when you bought the home. If that’s not clear or you can’t find the needed information, talk with someone on the homeowners’ association (HOA) board and have them point you to the pertinent language or amendment.
As with all valuable assets you’re considering leaving to your loved ones, it’s important to ensure they want it – even if they have to sell it – before you name them as a beneficiary. By discussing inheritances with potential beneficiaries before you codify them in your estate plan, you can avoid leaving loved ones things they don’t want and don’t have time to deal with.