Buying Property with In Laws

[Andrew Wilfong]

Hello,

My wife and I have always wanted a property with land (approximately 10 acres) in South Central Pennsylvania.  

My wife’s parents live a few houses down, and because of the grandkids, are at our house nearly every day.

Because of their financial situation, and our desire for land and to provide housing security to them as they age, we have agreed that our at our next property, we will have an in law facility where they can live and retire, mortgage free through the rest of their life, in agreement that the equity in their current home would be given to us in exchange to go towards the purchase of the property.

The thought was for them to sell their home to have the liquid assets on hand, and then them live with a relative, who has also agreed to for a mutually beneficial reason, so that when a desirable property arises, we could buy the land, and my wife and I sell our house to roll in our assets to the purchase of the property.

Prior to any sales, purchases, etc., I would like to understand the best way to navigate this scenario from a legal and tax perspective to minimize the tax burden and ensure both parties are protected.

Has anyone navigated this scenario and can anyone provide any tips?

[Joseph Palmiero]

Depending on your wife's parents current heath and net worth it also might be wise to review this plan with an elder law attorney so that there are no suprises if they need nursing home care down the road.