Parent Owns Ryan Braun March 19, 2022
HOUSING OPTIONSPARENT OWNS
Parent owns a second property for use by a family member with a disability

Parents can purchase a second home in their name for use as the residence of their family member with a disability. The property remains in the name of the parent(s) during their lifetime, and transfers to their heirs upon the death of the parent(s).

Low Risk

Liability Risk

High Risk

Much Control

Day-to-Day Control of Property

Little Control

Much Control

Long-Term Control of Asset

Little Control

Flexible

Flexibility to Move

Limited Flexibility

What is this?

Parents can purchase a second home in their name for use as the residence of their family member with a disability. The property remains in the name of the parent(s) during their lifetime, and transfers to their heirs upon the death of the parent(s). The parent(s) may have an informal understanding with the heirs to continue rent to the family member with a disability, but the heirs are under no legal obligation to continue to do so. The informal agreement could include an understanding of the circumstances under which the family member with a disability would move from the home, such as if the neighborhood became unsafe or if the home no longer met accessibility needs. 

The parent(s) should be aware that they must charge fair market rent to their adult family member with a disability or risk reduction or loss of public benefits (e.g. Medicaid waiver and SSI). The family member with a disability can use funds in a STABLE Account to make rent payments. (See Information and Resources: Stable Account).

View stories of families who own a second property for use by a family member with a disability:

The Brown Family

The Dunford Family

The Wenning Family

What Circumstances Make this a Possible Fit?

    • The parent(s) has the financial means to purchase a home in their name.
    • The parent(s) seeks the benefit of providing a home where the family member can live long term.
    • The parent(s) wants the value of the home to go to other heirs when the family member with a disability dies or is no longer able to live in the home.
    • The parent(s) is willing to assume the risks associated with having an informal agreement with heirs about the use of the property for the benefit of the family member with a disability. Without a trust, any agreement about how the property will be used can be ignored, or subject to creditor risks.
      • Please note: This option is easier to set up but has higher risk long term as outlined below.
      • Other options in this Guide that maintain familial rights to the property and reduce the risks outlined below include setting up a Limited Liability Company (LLC) or putting the home in a Trust. It’s important to know that an LLC or Trust can be formed even after the parent(s) has purchased a second property.
      • If there is not a desire to leave the property (home) to other heirs, the family could also consider creating a nonprofit or leaving the home to a housing corporation or service provider.

What Does This Mean to My Family Member with a Disability?

This option makes it possible for the parent(s) to help the family member with a disability get established in a (hopefully) long term home. While this option is easier to set up, it has the potential to leave the family member with a disability vulnerable to changes over time, which could be counter to the original intent of the parent(s). Changes in the needs of the family member with a disability or changes in the neighborhood may result in the interests of that family member being better met in a different housing situation. Issues related to the inheritance of the property, as outlined below, may also impact the family member with a disability.

What Does this Mean to My Estate?

The property remains in the name of the parent(s) during their lifetime. The home will transfer to heirs through probate or Transfer on Death Affidavit in Ohio. If there is no Will, it will be divided equally among the property owner’s heirs, otherwise it will transfer according to the Will or Transfer on Death Affidavit. 

Where Do I Get More Information?

    • Hamilton County DD Services can provide assistance with questions related to rent and benefits.

Pros

Cons

Pros and Cons

Extent of Control

Effects on Public Benefits

Longevity

Property Management Responsibility

Other

Long Term Flexibility

Tax Issue

Created by a Home Think Tank workgroup. 

Information on this sheet is provided for informational purposes only. Nothing in this document should be considered legal or accounting advice. Contact a professional for information pertinent to your specific situation.

© 2022 Hamilton County Developmental Disabilities Services

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