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Can your adult child inherit your home in a retirement community?

On Behalf of | Feb 8, 2022 | Estate Planning

If you live in one of the many luxury retirement communities here in Arizona, your adult son or daughter may have remarked more than once that they wish they could live in such a lovely area. So as you’re preparing to create your estate plan, you may wonder if you can leave your home to them. 

It depends. You’ll need to do a little investigating to find out. 

Typically, these communities have a minimum age requirement of 55 or even older. If your child hasn’t reached the minimum required age when you pass away, they may not be able to live in the home even if it’s left to them in your will.

Check the community regulations

Communities have their own rules regarding whether someone who’s younger than the required age can own property and/or live there. Sometimes those rules are more flexible when a person has inherited the property. However, you need to look at your community’s or homeowner’s association’s regulations. If you have a covenants, conditions and restrictions (CC&R) document, the information should be there.

Typically, if a community does allow some people under the age requirement to live there, they follow an “80/20” rule where only 20% of homes can have occupants under the age limit. Of course, you have no way of knowing whether the community will be at its 20% limit when it comes time for your child to take ownership. 

Another factor to consider is whether your child has children who would be moving in with them. Most retirement communities don’t allow minors

If your child is interested in owning the property and renting it to people of the appropriate age, that could be a possibility. Again, you need to find out what the community’s rules are about that. The most important thing is to find out whether your child would even be interested in living in your home before you check on the feasibility of it. They might prefer to sell it. As the senior population grows, so does the market for homes in 55+ communities. 

If you keep the home in good shape, with the right realtor, it could be a nice inheritance for your children. When leaving any large assets to loved ones, it’s wise to have experienced legal guidance.