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Can you leave your home in a senior community to a loved one?

On Behalf of | Oct 4, 2021 | Estate Planning, Wills and Trusts

Are you one of the many Arizona residents who live in a retirement community that is limited to residents who are seniors? Typically, the age restriction in these communities is 55 years of age and over. Your home is likely one of the largest single assets you have, so as you do your estate planning, what to do with your home may be a source of confusion. 

You may want to leave it to an adult child. They may have even mentioned numerous times how much they enjoy the community and the amenities like the golf course, movie theater and hiking trails – not to mention the lack of noise from children and teens.

Can you leave a home in a senior community to someone who hasn’t yet reached the minimum age? To determine this, you’ll likely need to first pull out your homeowners’ association (HOA) documents and read the fine print. Many of them have an 80/20 rule when it comes to non-senior residents.

What’s the 80/20 rule?

Many retirement community HOAs require that 80% of the residences be occupied by people who are at least 55 (or whatever the minimum age is). That means that if those under 55 years of age comprise under 20% of the residents when you pass away, your family members may be able to take ownership and move in – unless they have children. We’ll discuss that below. 

Some HOAs require that 100% of residents meet the minimum age restriction. It’s crucial to know what the regulations are before you bequeath your home to a child or other loved one under the minimum age.

Are there restrictions regarding minors?

Even if a certain percentage of residents can be under 55 years of age, they may not be allowed to move in if they have children or teens. This is often a quality of life and an insurance issue. That’s why some communities may allow minors to live there, but not let them use the fitness center, pool or other recreational areas.

Before you bequeath your home to a loved one, check the HOA regulations and ask questions if you’re uncertain. It may be necessary (or at least preferable) to designate that the home be sold and the proceeds given to whatever family member(s) you choose or be returned to the estate to be divided among your beneficiaries. As with all estate planning questions and issues, it’s wise to have experienced legal guidance.