The Wealth & Wisdom Blog

“How Much Rent Can I Legally Charge my Mother-in-Law?”

Even before the outbreak of COVID-19 last March, I was interacting with an increasing number of clients considering multi-generational living arrangements. According to  an article last week in the Wall Street Journal, the incidence of these multi-generational living arrangements, defined as multiple adult generations living together in one primary residence, has actually increased during the pandemic.  According to the Journal, 15% of residential purchases made between April and June of 2020 were for multi-generational living arrangements. In 2018, a record 64 million people lived in multi-generational households, which account for 20% of the population.  As home values continue to increase, and many older Americans seek at-home end-of-life care, this trend will only continue.

In this month’s update, I suggest a few important questions to ask mom and dad (the “Senior Gen”), as well as the younger generation (“Junior Gen”), who are considering such multi-generational living arrangements.  These questions are as follows:

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“Golf is a game whose aim is to hit a very small ball into an even smaller hole with weapons singularly ill-designed for that purpose.”  Winston Churchill.

As a golfer, I have come to realize, through many poorly-played rounds, that the use of the correct “tool” (that is, club selection) is of critical importance in executing the appropriate strategy.  For those endeavoring to complete a home improvement project, I am told that having the appropriate tool on hand is key to the efficient completion of your project.

Over the past few months, I have had the pleasure of representing several clients who have shared a common planning objective: to provide for the educational costs of their grandchildren.  Ideally, a grandparent will have the personal satisfaction of seeing their granddaughter or grandson move the tassels on their cap and hear Pomp and Circumstance at a post-pandemic graduation ceremony.   Just as certain tools are better than others when it comes to golf or home improvement projects, the most appropriate gifting strategy should be customized for each family.  In this month’s update, I provide a brief overview of four different gifting strategies that grandparents could implement to assist grandchildren with educational costs.

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“The only thing constant in life is change.”  Heraclitus, Greek philosopher.

Ahead of the upcoming November election, this month’s update provides a brief overview of those policy positions of Joe Biden and Donald Trump that impact estate planning decisions.  I am by no means attempting to endorse a candidate, to or to predict the outcome. I am predicting, however, that federal tax law changes will occur in the coming four to five years. As a result, clients will need to carefully consider how these federal tax law changes impact their estate planning.

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I have encouraged many of my clients to create a Legacy Letter, also known as an Ethical Wil. As of Summer, 2020, I thought I would share mine as an example.

I want to be remembered as a follower of Jesus Christ.  I also want to be remembered as a kind and gentle husband and father, a generous giver of time and resources, a patient and wise legal counselor, and an athlete who lacked talent but not desire.

It is my hope that my single greatest legacy is to spur my family, friends and clients towards a life-long journey with Jesus Christ.  I hope that I used my time and finances to show the surpassing worth of Jesus Christ, and to love Heather, Micah, Owen, Brendan and Kinsley with my whole being.  I hope that my love for the Lord came through in my personal relationships, including my relationships with my work colleagues, clients, and fellow grieving parents.

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