Welcome Home - the Extended Family Makes a Comeback
For those who believe in the adage “you can’t go home again”, you might not need to worry – home might come to you. The Wall Street Journal reports that the multi-generational family household is making a comeback.
The WSJ cites a study by the Pew Research Center in Washington, DC that found that a record number of Americans (49 million to be exact) are living in a home with at least two adult generations or a grandparent and another generation. This amounts to about 16.1% of the population and represents an increase of 17% since 2000.
The rise in multi-generational homes represents a distinct trend reversal. After World War II and through to the 1980s, the popularity of the extended family household declined – from about 25% in 1940 to 12% in 1980. However, since 1980 the rates have crept back up.
One reason for the most recent upswing has been the economic downturn. An increase in retirees experiencing shortfalls in their savings has made moving in with relatives a financial necessity. Another reason is demographics – the population is aging and the need for elder care is becoming more common. For dual income families, having grandparents in the house can carry obvious benefits when it comes to child care or paying a mortgage.
However, setting up an extended household has its complications – especially as far as finances are concerned. This is particularly the case when the family members decide to purchase or renovate a property together. Careful consideration should be given to how the purchase/renovations will be funded, how title to the property will be held, and how this might affect the estate plans of those involved.