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
High Risk
Much Control
Little Control
Much Control
Little Control
Flexible
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:
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
- The parent(s) maintains control of the home as long as they are living.
- Can change service providers without changing residence.
- This option offers little long-term control (after the death of the parent) however, the goals of the parent(s) may be achieved more effectively through some of the other ownership structures outlined in the Housing Guide, such as establishing an LLC, placing the home in a trust.
- Even if the parent(s) has already purchased a second property, it is still possible to make use of some of the other options, such as placing the home in an LLC or in a trust.
Effects on Public Benefits
- Funds from a STABLE Account can be used to pay rent and this will not impact benefits. Parents and others can contribute to the STABLE Account.
- The parent(s) must charge fair market rent, or difference in fair market rent and rent paid is considered to be in-kind support, which will negatively impact the SSI benefit amount. Note, this restriction does not apply to SSDI.
- Generally, a family member with a disability will not be able to use a voucher to make rent payments to a parent(s) unless granted a 'reasonable accommodation' by the local housing authority.
Longevity
- The parent(s) can arrange for the property to be placed in a trust on the death of the parent(s) to ensure that it remains available to the family member with a disability.
- After the parents/owners pass away, the house can be lost with a liability from a personal injury (i.e. car accident) or the divorce of an heir, jeopardizing the long-term housing of the family member with a disability.
- The heir(s) that inherits the property has no legal obligation to ensure the home is maintained for the benefit of the family member with a disability.
Property Management Responsibility
- The parent(s) can maintain the property as long as they are able; and/or can contract for property management support if they can afford to do so.
- Parent(s) may not be able to manage the property themselves as they age.
- The parent(s) may incur costs related to hiring/contracting with an entity to manage the property. The parent(s) will need to address the question of who will assume property management responsibilities after their death.
Other
- Easy to set up without legal assistance.
- The house may be deeded to future generations, providing an asset to an heir(s) once it is no longer needed by a family member with a disability.
- Requires access to funds to make capital improvements over time.
- Rental property purchases generally require a 20% down payment.
- The parent/owner is subject to potential liability claims for personal injury that occurs on the property.
- Parent/owner may be personally liable for the activities at the property. For instance, parent homeowner would be personally responsible for ensuring that the water bill for the site is paid in full. Parent/owners are responsible for insuring the property.
Long Term Flexibility
- Since the parent(s) is the owner, it may be easier to make accessibility and other changes to the property as the needs of the family member with a disability change over time. While they are still living, if circumstances change, the parent(s) can sell the home and make other housing arrangements.
- Changes in the neighborhood or in the needs of the family member with disability may make the home an undesirable place to live.
Tax Issue
- The parent(s) may be able to deduct interest and property tax on the second property.
- The parent(s) can no longer declare family member with a disability as a dependent. Please consult a tax professional.
- The parent(s)must declare rent as income.
Explore other housing options
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.
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