While I will take a moment away from railing against the insanity of ~half of homeowners not having a will, I would like to focus on an interesting article that was published in the WSJ titled These Parents Are Buying Homes for Their Kids—With Strings Attached by Rachel Wolfe. It’s a great piece that highlights the always-been-true-for-some-but-likely-more-prominent-today trend of families helping the next generation purchase a home.
To quote the key theme, “Buying a home has always been a milestone of financial independence. For some young Americans caught in the least affordable housing market in decades, it has become a family affair—strings attached.”
One father had a rule that he would help the Next Generation but only if they lived within X miles of him. Another set of parents helped with the down payment and cosigned on the mortgage. Families have been helping themselves forever, but is it more true now? Maybe.
“Though real-estate professionals say they are seeing more cases of home buying as a family affair, the data is murkier. There are a number of ways that parents and sometimes grandparents can help younger family members buy a home: a cash down payment as a gift, a family loan, cosigning on a mortgage, buying the house outright or inheritance. Nobody measures all of them.”
At the end of the day, analyzing if families helping the Next Generation is occurring more or less than in years past isn’t the most interesting question (to me, at least). This has, to some extent, always happened. I would prefer to accept this premise as given and ask, “How can we best help the family help the Next Generation?”
How can we optimize? How can we create a family bank? How can we ensure everyone involved in the estate has transparency and the help is accounted for properly? How can we ensure that Mom and Dad are helping ensure the Next Generation is given a better life than was given to them? How are we helping ourselves and moving our families, forward?