Pearl is 84 years old. She lives by herself, in a home she has lived in and owned for forty years, with a nice garden that she lovingly tends. She is smart, and independent, but has a heart condition, a bad hip, and does not have the stamina she once had. Her home is worth about $300,000 and she has about $50,000 in savings. Pearl loves her home, and neighbourhood. She does not want to move, but knows she needs some assistance. She inquired into getting a professional caregiver to assist her, but is worried that it will deplete all of her savings.
Pearl has three children. Her daughter Pat lives in an apartment near by. Pat is 58 years old, and recently divorced from her husband. She works as a store clerk. Pat has never owned a home. Pearl's other two children, Thomas and Susan, live in Winnipeg and Regina respectively, and both have nice houses and are fairly well to do financially.
Pearl suggests that Pat move in with her, and asks her to help her maintain the house and look after her as she gets older. Pat moves in, and Pearl transfers ownership of the house into Pat's name. Pearl and Pat have a good understanding of one another, and neither considers it necessary to have a formal agreement in writing.
This arrangement may make sense to Pearl and Pat, and appears to meet Pearl's needs, while providing Pat with the security of a home. There are, however, many potential pitfalls that Pearl and Pat have probably not considered. A few questions that Pearl and Pat should ask themselves before entering into this kind of arrangement include:
1. Will Pat be able to give Pearl the care she needs, especially if Pearl's physical condition deteriorates? What if Pearl suffers a stroke, and requires significantly more care? Is Pat obligated to continue providing care in those circumstances, or can she arrange to move Pearl into a care facility and keep the house?
2. Can Pearl change her mind if she finds that living with Pat undermines her sense of independence?
3. What if Pat decides that she would like to move? Can she sell the house and move into another taking Pearl with her? What if Pearl does not want to move?
4. Will this arrangement be workable if Pat remarries?
5. What if Pat dies before Pearl, and the house goes to Pat's children under Pat's will?
6. Will Thomas and Susan resent this arrangement? If Pearl dies within a few months of the transfer of the house into Pat's name, will they feel that Pat has taken advantage of their mom? Will they sue Pat?
Pearl, Pat, Thomas and Susan are fictitious. Unfortunately, informal care giving arrangements like this do break down, creating significant legal and financial problems for the people involved, and destroying family relationships.
Anyone considering this type of arrangement should get legal advice. Consider a formal, detailed legal agreement, dealing with various contingencies that may arise.
You may also wish to read The British Columbia Law Institute's report on Private Care Agreements Between Older Adults and Friends or Family Members, which may be obtained online from their website at http://www.bcli.org/. |
