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Outside the Box: I want to buy a ‘forever’ home with my son and his wife. How can I protect myself?

Dear Harry,

I recently sold my condo so that I can buy a “forever” home with my son and his wife (they have also sold their home). We agreed to put my name on the deed, along with their names. My name will not be on the mortgage, which they will pay. Depending on the cost of the home, I will contribute a down payment of $175,000 and they also will put down $175,000. I am concerned that should some unexpected event happen in the future (divorce, death, etc.), I would like to get not only my initial investment, but any capital gains if the house is sold. Is this the best way to ensure I don’t get the short end of the stick if something unexpected happens? By the way, I also intend to add a granny home if one does not exist on the property.

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Dear reader,

Co-living arrangements such as what you’re planning with your son and daughter-in-law can be great if they work out, but disasters if they don’t. It’s good that you’re going into this with your eyes open and asking these questions. It sounds like you and your son and daughter-in-law are originally investing the same amount, but they’ll contribute more in the long run by paying down the mortgage. However, you may be investing more if you pay to build a separate granny house on the property.

If everything works out according to plan, you’ll live there “forever” and I assume there’s no problem if the house eventually passes to your son and daughter-in-law. As you suggest, matters could become difficult if the living arrangement didn’t work out for any reason. It sounds like neither you nor your son and daughter-in-law have sufficient finances to buy out the other. If the property were sold, you may or may not have contributed equivalent amounts depending on the timing.

I’d start by having everyone separately answering a number of questions to make sure you’re on the same page. These could include the following:

1. Your son and daughter-in-law will be paying the mortgage, but who will be paying the other expenses?

2. What happens if any of you decide you don’t like the arrangement or that you would like to move out for any reason?

3. You don’t say whether you have other children but, if so, will things be equalized if your share of the house goes to your son and his wife? Would that change over time, perhaps a bigger share if you were to pass away after a few years and a smaller one if after a few decades?

4. What happens if your son passes away before you?

5. If you were to fall ill and need care, would your son and daughter-in-law provide it? If so, should they be compensated?

6. As you brought up, if the property were sold how should the proceeds be distributed? Perhaps you should receive half if this were to occur soon, but a third if it were to happen several decades from now after your son and daughter-in-law had made substantial mortgage payments. Or you should receive more early on if you invest in the granny house.

After you have each answered these questions separately, you can compare your responses and see to what extent you have a shared vision and to what extent you’ll have to work together to create a new one. Then, put the final agreement in writing. It takes a written agreement to make sure you’re all on the same page. Also, no one’s memory is perfect, so a written agreement preserves what you agreed on.

Finally, the agreement should provide that it can be changed if you all agree. Not only are our memories of the past imperfect, so are our predictions about the future. When reality kicks in, be willing to adjust.

Harry S. Margolis practices elder law, estate and special needs planning in Boston and Wellesley, Massachusetts, and is the majority owner of He is author of The Baby Boomers Guide to Trusts: Your All-Purpose Estate Planning Tool and answers consumer questions about estate planning issues at

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