Buy house or wait to inherit?

[Epicurean]

If your parents were 75 and 70 (the 70 year old has a lot of health problems and is very unwell, 75 year old seems fit but has a history of heart problems), and they told you they intend to leave their house to you, would you continue to rent until that day comes when you inherit it or go ahead and buy s $250k or $350k house (average for this area)?

 

The parents' house is historic and has a lot of meaning to us. We couldn't bear to sell it, though it would be hard for us to pay taxes on it, etc. while paying for another house at the same time. I guess we could rent it, but that could have problems too. The house would probably sell for $500k, mostly based on location (but we'd never do that).

 

Part of me feels like I don't want to keep renting for an indefinite amount of time when we could afford our own house. Another part of me wonders if it is unwise to take on a mortgage when we'd have to try selling the new house in maybe a few years to move into the inherited one. What would you do?

[Jaz]

There's no guarantee your parents won't need to sell the house to cover their future medical expenses. I'd move on with my life and not make it part of my financial decisions. I do hope someday you are able to enjoy living there.

Edited September 9, 2016 by Jaz

[KungFuPanda]

My grandmother is 92 and still owns her house. Where do you want to raise your kids? You CAN sell and move if you inherit a house. I wouldn't base a life decision on the possibility of an inheritance. You never know what could happen.

[Epicurean]

Thanks for the sage advice. That makes a lot of sense.

[gardenmom5]

I subscribe to the "don't count your chickens before they hatch".

 

I would buy a house that fit the needs of my family.  your parents could die tomorrow, next week, next yaer, next decade . . . . do you really want to live in limbo?

 

if they do leave it to you - you could always rent out the house you buy, and live in your parents historic home.

 

or you could buy it from them, and they could downsize to something that meets their needs.

[Melissa in Australia]

Your parents could live for another 20 years.

 

They could need to go into a nursing home in the future and need to use the collateral of the house to cover the expenses.

 

I would never ever base financial planning on the remote chance that there might be an inheritance sometime in the future.

[Tap]

I would never, ever want to be in a position that I was waiting for someone to die, before I could move on with my life. 

 

Buy what you want to buy and then sell it or rent it out later if the inheritance happens. Many people live way longer that you would expect with a myriad of health problems. Quite often, people also need the money invested in a home to pay for health problems. I have also seen old age and dementia take over and to have beloved family members unexpected cut from a will. There are too many what-ifs in this situation to gamble your families future on it.  If you like renting, then no loss.  But if you are of the mind set to buy....do so. 

 

 To think of sitting around, waiting for someone to pass on....nope.  There is no way I would want to live my life like that. 

 

 

[madteaparty]

I wasn't waiting for anything, but my darling grandma lived to 104...just sayin'

[TranquilMind]

I wasn't waiting for anything, but my darling grandma lived to 104...just sayin'

That reminds me of this famous French woman.

 

http://www.nytimes.com/1995/12/29/world/a-120-year-lease-on-life-outlasts-apartment-heir.html

[Plink]

Medicaid spend down forces many elderly people to reduce their net worth to practically nothing.  I'd talk candidly with my parents and work out an arrangement to buy the house of my dreams (or put it in a trust) sooner rather than later - it may not be there later.

 

If you decide not to buy, at least research how best to help them protect the house.  Homes aren't taken outright, but the liens against property can force its sale.

Edited September 9, 2016 by Plink

[regentrude]

If you want to own a home, buy the house you want now. Your parents could live a long time - 75 is not old. They could easily live another 20 years.

You can always sell the house you buy now.

[ktgrok]

If you are sure they want you to have the house, and you are sure you want the house, I'd sit down with an elder care lawyer and figure out the best way to assure that happens. You'll want to protect it from a medicaid spend down, etc. Do they want to stay in the house until they die? Would they be better off with you buying the house now (below market value, or them doing self finance with low monthly payments) and them moving into a smaller easier to take care of place? 

[gardenmom5]

That reminds me of this famous French woman.

 

http://www.nytimes.com/1995/12/29/world/a-120-year-lease-on-life-outlasts-apartment-heir.html

 

I've always loved that one.   and why paying a 90 year old a monthly stipend until their death to buy their apartment isn't always a good deal.

 

she died at 122 yrs 164 days.  documented.

[3 ladybugs]

Could you do something where you move in with your parents and the house is transferred to your name? That way you get the house now and they can see how much you love it and any changes you wanted to make to it. It helps them because they don't have to pay taxes on the house. 

 

Just a thought. 

[Spryte]

Buy a home. Live your life. Your parents wouldn't want you to put your life on hold, would they? I don't think they would.

 

If renting is better, in your area, then do that, but do it because it's the better choice for your family, not because you're waiting.

 

When you inherit, if it works out the way it should, you can sell your home, you'll probably have a bit of equity to work with, and you'd have to move no matter what.

 

FWIW, I know an elderly couple who were told they would inherit a particular home for all of their lives. They did base decisions on that. In the final months of the person from whom they'd inherit's life, she changed her mind. She explained why, the now elderly couple graciously accepted her decision, and the house went to someone else. Things can change. But they were in their 60s at that point, and I think it was hard to swallow the change in plans, even though they were ok financially, thanks to good decision making over the years. I'm not saying I think your parents will change their minds, just that these things have happened. Probably not to you, but it can.

[Lanny]

Recently, I read about a man who passed away. He was 81 years old. One of his survivors was his Mother.   There are 2 people involved who would need to pass away, before you might inherit that house.  I would suggest that you look for a house that is satisfactory for your family at this time. The lowest cost property in the best possible neighborhood. 

[J-rap]

It would not occur to me to wait for my parents to die in order to have their house (I'm not saying you WANT them to die, of course!).  I live with the dream that my parents will live forever.  :)  Presently they are 88, live in their own home, and still host dinner parties and all holiday events. 

 

Of course I understand what you're asking, but I wouldn't put my life and my own dreams for a home on hold during these years when your children are still young and living at home with you.

 

If it happens that the situation changes, then you will need to make some new decisions, but I'd face those when the time comes.

[bolt.]

I'd attempt to work out a wise-and-legal way to buy it from them or assume legal ownership of it in a pre-inheritance way that suits everyone with minimal compromise and no pressure.

 

If there isn't a way to work that out, I'd buy a home (as it became feasible/appropriate) for myself and my family without regard for the possibilities of future inheritance (probably during my empty nest).

Edited September 9, 2016 by bolt.

[Guest]

I would run the numbers. What is the cost of renting vs buying?

Will the possibly inherited property be maintained over the lifetime of the curremt owners, or will it need substantial investment to overcome neglect?

I would expect at least 25 years more for the healthier gp. The last fella I knew with heart issues made it to 96. If their plan is to age in place, likely you wont inherit soon, unless they neglect their well being.

Edited September 9, 2016 by Heigh Ho

[Happy]

I had a slightly different story that might additional perspective.

 

As a newlywed (39 years ago tomorrow :) ) we moved to the family farm. We were told MIL & FIL would be building their 'dream' house shortly and we would get their stone house. Great. We parked a used mobile home on the farm and got busy living...three year later as we were considering building a house of our own--I was so over the mobile--we were reminded the in laws were about to build a house. The cattle market crashed, the oil market crashed. Back and forth...everytime we talked about buying or building, my beloved FIL would remind us he was about to build a house. We believed him....

 

The short story is....my MIL never got her dream home. We moved away from the farm after 15 years in that mobile home. Bought the prettiest little house in the DFW area and I've never looked back.

 

Get a home for YOUR family and let the future come at it's own pace.

Edited September 9, 2016 by Happy

[Janeway]

I would buy. They are only in their 70's. My parent is 90. The other died around 75th birthday of cancer. If you wait to inherit, you could be waiting another 30 years.

[G5052]

 

Get a home for YOUR family and let the future come at it's own pace.

 

Absolutely.

 

I could tell several stories about estates that didn't pan out as expected, including a "simple" one (only bank accounts) that has been dragging on for five years now. That one was going to finance my kids' college and here we are. The youngest starts college next fall, and I'm not optimistic that anything will happen by then either.

[Ailaena]

 

Are you *sure* they want to stay there? I mean, maybe they are just staying there until they die so they can give you the house, but in the meantime, what they really want to do is live in an easy, one-story condo/home in a retirement community?

 

Maybe you should talk to them because who knows, you guys could move into the house now and they could move somewhere smaller!

[TechWife]

Don't make any decisions based on the fact that your parents say they are leaving the house to you. They may need to sell it to provide for their own needs at some point in the future. We are considering selling my parents home to pay for assisted living care. They are 86. We never anticipated doing that even five years ago, much less 15 years ago. Ive learned quite a bit about elder care and finances in the past couple of months - there's quite a bit to digest.

[TranquilMind]

I've always loved that one.   and why paying a 90 year old a monthly stipend until their death to buy their apartment isn't always a good deal.

 

she died at 122 yrs 164 days.  documented.

Yeah.  Who would have thought she would outlive her far younger buyer? 

 

;)

[TechWife]

 

If you decide not to buy, at least research how best to help them protect the house.  Homes aren't taken outright, but the liens against property can force its sale.

 

Just an FYI, the information in that link isn't the full picture. There are a lot of details that can cause something to go one way or another, including the timing of the transfer of assets. 

[Seasider]

If you are sure they want you to have the house, and you are sure you want the house, I'd sit down with an elder care lawyer and figure out the best way to assure that happens. You'll want to protect it from a medicaid spend down, etc. Do they want to stay in the house until they die? Would they be better off with you buying the house now (below market value, or them doing self finance with low monthly payments) and them moving into a smaller easier to take care of place?

And don't wait to do this. Qualifying for Medicaid for long term care involves a 60 month (5yr) look back period. Not only does it require that assets be spent down, they must be spent down in ways that will survive such an investigation. Any "gifts" or sale of assets at below fair market values will raise red flags.

 

I would not wait to inherit. But if you really want that house after they are gone, the wise and proper thing to do would be to talk with your parents NOW about how to make that happen.

[TechWife]

And don't wait to do this. Qualifying for Medicaid for long term care involves a 60 month (5yr) look back period. Not only does it require that assets be spent down, they must be spent down in ways that will survive such an investigation. Any "gifts" or sale of assets at below fair market values will raise red flags.

 

I would not wait to inherit. But if you really want that house after they are gone, the wise and proper thing to do would be to talk with your parents NOW about how to make that happen.

 

Yes, this. Sometimes the best way is to put the house in an irrevocable trust. Complications abound. It's why knowledgeable elder care lawyers are worth their weight in gold. 

 

ETA: Don't think that your parents don't have enough money to pay for a lawyer. Paying for elder care is more complicated for people who have few assets than it is for people who have a lot of assets. It's worth it to pay the lawyer now to protect the minimal assets from becoming non-existent assets in the future. 

Edited September 9, 2016 by TechWife

[FaithManor]

Bankruptcy and loss of home for the elderly is often caused due to medical bills not covered by Medicare. I would not count on getting that house. My parents are drowning in medical debt and will not be able to afford to keep their home.

 

Reverse mortgage is another scenario. Uncle decided to try to keep his wife out of the nursing home but that meant hiring in home help not covered by insurance so he needed to dramtically increase monthly income. The bank will get his house in the end.

[DawnM]

I would buy with the thought that down the line sometime, IF the house becomes ours, we can sell the house we are in and move into that house.

 

My mother has been in ill health for many, many, many years.  She is now 85 and no one expected her to live even this last 15 years.  There are no guarantees on timelines for death.

[gardenmom5]

Yeah.  Who would have thought she would outlive her far younger buyer? 

 

;)

and the buyer ended up paying far above market rates. (he'd been paying for 30 years.)   apparently -his wife was obligated to continue the payments after  he died at 77.

[Seasider]

Don't make any decisions based on the fact that your parents say they are leaving the house to you. They may need to sell it to provide for their own needs at some point in the future. We are considering selling my parents home to pay for assisted living care. They are 86. We never anticipated doing that even five years ago, much less 15 years ago. Ive learned quite a bit about elder care and finances in the past couple of months - there's quite a bit to digest.

Amen