What You Need to Do Before Your Parents Move In With You

The Squeeze

• You can typically claim a live-in parent as a dependent on your income taxes.
• Caregivers' out-of-pocket expenses can be around $7,000 a year.
• 70% of caregivers miss time from work due to caregiving responsibilities.

Mom and Dad took care of you — and now as they need more assistance, necessity is calling for a role swap and you’ve agreed that it’s time they moved in with you. If you thought the birth of a child changed your life, wait until you bring one or both parents into the nest. Preparation is key. Now is not the time to wing it.

Here’s what to do before they move in.

1. Develop a written plan

Think ahead and account for your parent's needs — and yours. Imagine as many scenarios as you can. Who will your parents to doctor's appointments? What will happen to your parents' house? If you sell, how will the funds be used? Who is the backup caregiver? And who is the backup for the backup? 

“The longer the list, the better,” says Eric Reich, a certified financial planner and president of Reich Asset Management. “While you might not need a few of the items on the list, it's far better to address them in advance."

2. Make no assumptions

Before you parents move in is the time to have a frank financial discussion. You also need to be direct and ask what they might they need or expect from you financially. In most cases, parents don't want to be a burden on their kids, but that can be exactly what happens, especially if you haven't had a conversation about their assets and debts and what resources they are bringing to the household. 

“Talking will eliminate confusion about who is responsible for what after your parents move in," says Deacon Hayes, founder of WellKeptWallet.com. The more you agree on in advance about who pays for what, the smoother the transition will be. Consider arriving at a monthly figure that your parent or parents will contribute to the family budget that aligns with what they have at their disposal. Making them feel that they are part of the family unit in this way can also keep them from feeling like they are losing autonomy.

Sometimes due to aging, illness or loss of mental capacity, it becomes necessary to step in right away to manage an elderly parent's finances. If this is the case, make sure to have their credit report pulled so that you can see exactly what they owe. You can do this for free once per year from each credit bureau. You don't want any financial liabilities to slip through the cracks unpaid. 

3. Reassess your home

What will be required to make your parents comfortable and keep them safe in your home? Depending on their physical capabilities, you may need to make adjustments, like adding a stairlift, safety rail in the bathtub, or a ramp for a wheelchair, for example. Even if your parents don't need these amendments immediately upon moving in, now is a good time to consider planning for these key home improvements (which will also come in handy for you in your later years).

4. Create a new budget

Now that you are adding to your household, you need to refigure your budget to account for more groceries, more utility costs and possibly more health care costs. Once you have real figures, you are better equipped to talk to your parents about what their monthly contribution is. 

If you have siblings, you can show them the costs of having mom and/or dad at home, and ask them to pitch in financially to support you as you support your parents. Caregiving has real costs to it. Research from AARP's Family Caregivers Cost Survey from 2021 found that 78 percent of caregivers incur out-of-pocket expenses of around $7,200 a year. 

This cost is recognized by the IRS, and so it is often possible for you to claim a live-in parent as a dependent on your income taxes, which can offset some of the financial expenses involved in co-housing with your parents. 

5. Get familiar with their health insurance

Since health care costs tend to increase as we age — after age 65, Americans spend more than $11,000 a year on medical expenses — it's critical that you become familiar with your parents' health care insurance and what it covers. You may also want to look into long-term care insurance, which covers everything that basic health insurance does not in the case of extended disability, from in-home nursing care to paying for assisted living or nursing facilities, which can run upwards of $90,000 a year in some states. This is why having clarity on all your parents assets is important — long-term insurance is more important to have if there are not assets to liquidate (their house or retirement accounts, for example). 

Try to stay a step ahead of the curve, take some time to do initial research on nursing homes and assisted living facilities in your area, in case you need them one day. If a medical crisis happens, you will be in a better position to respond, already having laid some groundwork for yourself.

6. Expect the unexpected

For sure, this transition will be an unpredictable time of life for everyone — now and going forward. "Being a caregiver is typically far more difficult of a job than most children assume," says Reich. It's important to keep in mind that the parent who moves in with you today will continue to change, physically and mentally — a good reason to be sure to take time to celebrate as many family moments as you can. After all, they will never be younger than they are right now, and their decline may happen in an unpredictable timeframe.

Take photos, have your children capture stories about your parents' lives, go through family memories together and listen to them share. You will treasure these moments later on.

7. Loop in the rest of the family

Communicate clearly and often with siblings and others who live out of the area — and not just about how they can support you as you care for your parents. You'll want to share what you have learned about your parents' assets (or lack thereof) to keep everyone prepared. 

"Don't be fooled,” says Reich. “If [your siblings] are a beneficiary, they are asking themselves a lot of questions even if they aren't verbalizing them to you." Matters such as wills and who has been named executor of the eventual family estate should be discussed by all. "Clear communication is one way to help avoid potentially serious disagreements once things take a turn for the worse for the aging parent.”

8. Buckle up for the emotional rollercoaster

Much as you love your parents, bringing them into your household is life-changing. There will be benefits, like the time you spend together and the joy of helping someone so dear to you, but this will be work, too. 

For sure, new dynamics between you and them will be something to navigate. Remember that your parents are dealing with losing their independence, and some may pridefully resist the role reversal. And no doubt your increased obligations can place a strain on your marriage. 

Then there is the juggling act with work. A Genworth survey found that 70 percent of caregivers missed some time at work because of caregiving responsibilities. And if your children are still at home and require your time too, this can be quite the recipe for mega-stress. 

"Plan for downtime for yourself,” says Reich. “The best quote I ever heard was, 'Caring for sick people makes healthy people sick.’ You simply can't be a 24/7 caregiver to your aging parent without its taking a major toll on you mentally, physically, and emotionally.”

To that end, consider joining a support group that understands what this chapter of life can feel like. Connecting with people who are going through what you are can provide much-needed encouragement, as well as practical solutions shared from your collective experiences.