In our last post, we discussed the factors that go into deciding whether or not you want to build an in-law addition. Now that you’ve decided to add on, this article will tackle some of the trickier situations. 

Disclaimer: We’re not lawyers, but we have 70+ years of experience designing in-law apartments. We’re here to point out items you may not have thought about, but please consult a lawyer who specializes in elder law for specifics on your situation.

Legalities

While the hard stuff boils down to “consult a lawyer,” there’s a little more to it than that. It mostly centers around inheritance, tax deductible gifts and Medicaid. Some of these things are universal truths across America, some differ from state to state. 

There are definitely some tax advantages for the homeowner who takes in their parents, but also some cases where the in-law can be penalized if the apartment finances are handled poorly. Before doing anything, I cannot stress enough that a lawyer should be contacted. Whatever the expense of that is, it pales in comparison to some of the penalties of getting this stuff wrong. 

Medicaid

If your in-law is on Medicaid or plans to benefit from it, there’s a hard limit on the amount of assets they can have to their name. Sometimes, before qualifying for Medicaid, an elder will purchase a house so that money isn’t sitting around in a bank account to disqualify them. But purchasing the house allows the State to come back around after they’ve passed away and claim it to recoup expenses. Obviously, you don’t want that. 

Instead, the in-law can help finance the apartment but only up to a certain amount. Too much and it still disqualifies them for Medicaid, too little and you can claim part of it as a gift to them on your taxes. If they do pay their share and it’s right at that perfect amount, it becomes what’s called a “life estate.” They can’t be evicted and ownership reverts back to you when they pass away. So you get some help building their apartment, they get to qualify for Medicaid and you get the apartment back without tax hassles.

Win/win/win. 

But seriously, hire a lawyer that specializes in elder law. They’ll know all these little specifics that I can only generalize. 

Zoning 

Second up for “hard stuff” might actually make all this moot. Depending on your location and the zoning of your residence, you might be limited on the type or size of apartment you can have.

Some zoning laws won’t allow for “accessory dwelling units.” You can get around all of this by connecting the apartment to your own electric meter, not having a full kitchen and having it and the connected house all look like a single unit. But if you have thoughts of turning it into a rental later, that won’t work. 

Of course, if you’re adding to your existing home and you’re following our advice, you’re going to hire a general contractor who’ll deal with all of this for you. But if you’re doing this all yourself, better contact the appropriate zoning board to see what very specific hoops you’ll have to jump through. 

The Not So Hard Stuff:

Once you’ve sorted out how everyone feels, who’s paying what and whether your city will even let you build this thing, you can ponder over the design aspect of the apartment.

Is it going to be attached to your house or will it be a freestanding structure? Is it over the garage? Each option has its pros, although the over-the-garage thing might be difficult for elderly occupants, unless you’re springing for that super awesome garage elevator. Maybe just a platform with some sort of pulley system that they have to use to hoist themselves up to the second floor. I’m not gonna micromanage. 

But privacy is a high priority. Both for whoever’s living in this apartment and for the rest of your family. Make sure the apartment has its own entrance and if it does connect to your main house, consider putting in a buffer hallway with lockable doors at both ends. This is especially important if you expect to use the apartment afterward for a rental. 

If the zoning allows for it, throw in a full kitchen. And because elderly people tend to like things a bit warmer, consider putting the apartment on its own heating zone. As a bonus, install a separate electric meter for future use as a rental unit. Even if you plan on paying for your in-law’s electric, it makes it easier to turn over to someone else afterward. 

In Closing:

Being able to take care of your parents or in-laws as they advance in years is a great thing. A blessing for them, and often for you as well. If everyone’s able to set up manageable expectations and create reasonable boundaries, the likelihood of the relationship souring can be close to zero. 

But other than in-laws, consider a recent study that says almost half of all children return home to live with their parents for some amount of time. There’s also the rising tide of freelance or home businesses. If the apartment ends up vacant, it could be used as a full office with its own entrance for clients, or as an AirBnB rental. 

The possibilities are endless.

Here at Home Designing Service Ltd, we’ve designed more than our share of new homes and additions in all shapes and sizes. Both standard and unconventional. We’ve even designed a few garages with elevators.

What? Did you think you were the only one?

Call Home Designing Service Ltd, ask for a garage elevator. We’ll know exactly how to help you.

In today’s uncertain times, just knowing we have the support and protection of our family as we grow older can make all the difference. For those who can, building an in-law apartment can bring some much needed peace of mind to the entire family. But, like most things in life, the process and options aren’t as simple as they appear. 

Let’s walk through it. 

The Simple Stuff:

There are a lot of very easy questions to ask yourself as you begin to explore whether an in-law apartment is going to work for you. The first, and most obvious, being: 

Does everyone want to live together?

If your spouse and kids are all for it but your aging parent isn’t, well, that’s a hurdle you need to deal with before progressing. And vice versa. If bringing your parent into the home is going to cause you or your spouse considerable distress, it’s best to sort that out before forcing the situation, causing resentment and spoiling the relationship. 

Clarifying Expectations

Once everyone’s on board, here are some other points to consider:

• What daily activities will you do together?
• What considerations will you have for privacy?
• What financial responsibility will the in-law have for household expenses, if any?
• What will be required of you to help in their physical care, if any? 
• If they need semi-round-the-clock supervision or care, is someone going to be home for that or will you need to hire medical assistance?

These all might seem obvious, so obvious that you might think you don’t need to answer them, but do. The answers to these questions are no less important than how you’ll finance the addition or the design. Tempering expectations and setting boundaries early will ensure you all enjoy the years you’ll spend together. Deciding on these things up front will go a long way in sparing hurt feelings and avoiding resentment. 

Who’s the boss?

This isn’t a psychology blog and I’m not going to try to pretend to know what I’m talking about in that regard, but keep in mind that you and your in-laws are both accustomed to being the head of the household. You’re both used to making a decision and having that decision stand, for the most part, unopposed. 

This is why wolf packs don’t have two alpha males. But maybe if wolves could politely ask one another to commit to having dinner together three times a week, that parenting decisions will be decided by just the immediate parent, or that you don’t, in fact, need constant reminders that “that’s not how it worked when I was raising kids,” maybe they wouldn’t be at each other’s throats so much. 

But, again, I’m not a psychologist. 

Alternatives?

The alternative to having your in-laws stay with you, of course, is some form of assisted living. Surely the costs must be comparable, right? Additions aren’t cheap, after all, and assisted living is just renting with overly glorified neighborhood watch and a higher than average bingo and checkers community, right? 

Right?

The answer is the direct opposite of yes. The national average monthly expense of assisted living is just short of $3000. The average of assisted living in Connecticut, where we’re based, is almost double that. Double! Apparently in the state of Connecticut, we don’t believe you’re really being taken care of unless you’re zipping from water aerobics to that butterscotch pudding dessert on a Rascal designed by BMW across sidewalks made from ancient Italian marble. 

And while that all sounds nice, at their age, if your in-laws slip on that marble sidewalk, well… I mean, my hip almost broke just writing that sentence. 

So let’s compare that to the cost of this addition. The national average of an in-law addition is $50,000-$150,000. If you hit the average of that average, let’s assume you’re paying $100,000 for this addition. That means, even at the national average, instead of Connecticut’s FanciCare, that addition is cheaper than just three years of assisted living. In Connecticut, it’s just a year and a half. 

So… yeah… 

Part II Up Next

We’ve covered the family dynamics of deciding on an addition, and we’ve proven that your bank account prefers that you build an addition. In part two, we’ll go over the more technical issues, including taxes, financing and zoning issues, along with design choices.