How would I determine the fair rent for my mom who lives in my home and has 2 rooms one a bedroom and the other a sitting room (bedrm size)?

A NJian! Hi! I live in the SW of the State.

Keeping accts separate is good too if you ever need Medicaid. I suggest you write up an agreement and have u and Mom sign it in front of a notary for Medicaid lookback.

Rent would depend on what Mom brings in. HUD usually charges 30% of a persons income for rent. Utilities are something to consider. So if Mom brings in 1000 a month, then $300 to $350 would be her rent and you could add her portion of utilities to that. Mom should have enough left to buy her personal items and special foods u don't eat. Pay her copays , her credit cards, etc. You should not have to pay for anything.

Talk to an elderly law center to make sure you do everything properly. When my friend had to go into a nursing home Medicaid went back and demanded proof of every single payment to family, including reimbursements for items and services the family initially paid. As her power of attorney it was an absolute nightmare, and many of the expenses were disallowed by Medicaid because we did not have adequate proof. I did the best I could, but so much was denied.

The elderly law center can help you create an agreement that is acceptable to Medicaid. There are so many "ifs" "ands" and "buts" that it is really a necessity.

If you cannot locate an elderly law center either on its own or through an elderly assistance program in your area, you might want to hire an attorney.

Also, having an agreement on paper that has been checked for fairness by a 'legal eagle' may help in the long run with family members who may think since you were receiving money all along, you were not being fair. It might not sound important now, but please do what you can to protect yourself!!

Fair rent for IRS purposes would be whatever she would have to pay on her own in a similar town with similar square footage and services. It has nothing to do with your mortgage payments.

Here is an AgingCare link to the agreement JoAnn29 is talking about. A sample form link can be found at the end of the article. https://www.agingcare.com/articles/personal-care-agreements-compensate-family-caregivers-181562.htm

The paragraph regarding rent is at the top of page 3. This form is good reference for taxes and possible future Medicaid look-back purposes.

My mom is in Assisted Living and pays $2,000 for room & board and $590 for personal care (help with dressing, bathing, medications, etc). 30% of income to a senior needing care is not relevant. My mom pays almost 100% of her income on her facility. Check into assisted living or Independant living rates in your area and what your mom can afford and adjust accordingly. I would document your thought process for any government aid she may get now or in the future. I assume you are also providing board and care, not just the two rooms plus bath.

My elder attorney advised that I have a realtor come in and assess the space she uses. He did and then he provided a letter to me what he felt was the fair market value for her rent plus including her utilities and use of the rest of the house. She has a BR, sitting room, bath and use of the rest of the house and the porch. This would be documentation in the event she would have to apply for medicaid.

How many live in the home?
How many bedrooms are there?

The Take your monthly rental or mortgage payment and divide by total number of actual rooms( kitch + bath do not count) So if it is a 3 bd with a living room then 4 rooms. She would pay for 2 rooms.

You could utilize the formula your county uses to calculate SSDI contribution to SNF monthly rent. In our state it's all of the SSDi excluding $50 for incidentals. Which places the average at $900/ month.

As others suggested, while contemplating/calculating what might be a fair amount, it would be good to run this by EC atty. What you end up deeming fair may exceed what Medicaid would deem fair - best to avoid issues, in case she ever needs that service. Contracts done up legally, signed and witnessed will be useful if she ever needs Medicaid. Keep receipts!

Others mentioned utils and others still care-giving. These all fall under different categories, so again, once you think you have it worked out, review with EC atty.

Utils should be easy to work out, if you have lived there a while, have the old bills and no changes to the number of people before mom moves in. Monthly these will vary a bit, so it's best to compare a year's worth (colder/darker in winter, so more heat and electric, more laundry/dryer, more cleaning, bathing, etc.) It will take a while to know the real impact, but comparing cost each month before and after mom moves in, you can get a rough idea how much she impacts the bills - it isn't likely going to be doubled, unless she jacks up the heat, runs elec things all day, and takes 2 hour showers!)

For something like cable, you likely already have it. If there is an extra charge to set up her own tv or special programs in the sitting room, then she should cover that. Otherwise, if there's no change in the cost, I wouldn't charge anything for that.

I also don't think splitting the mtg by # of people is very fair. She can use other parts of the house, say the kitchen, but she is never going to own any of it and likely doesn't use the rest. Keep the "rent" reasonable, more like enough to cover clean up and damages after she's gone. Also, MTG or rent isn't going to increase if she moves in, so she isn't increasing your outlay...

Food/household supplies might be similar to utils. If you on average spent $100/week on food, etc and now it's $200, maybe it's all hers? If you are combining meals, try to make it fair for her - she likely won't eat as much as your son! If she has special foods/needs, use her money (best to use her CC or check, or debit, so you can have proof) to buy these separately from the regular household food/supplies and keep receipts.

Care-giving is a whole topic in itself. The IRS has rules about this and if you make over a given $ amount for the year (the limit is ridiculously low!), you have to claim it as income, pay all the taxes, SS, Medicare AND have an agreement.

Unless I was desperate for money, or having my mother increased my mtg or rent (generally unless you buy/rent more space, having her live there doesn't change the amount being paid, it just eliminates some space you were previously using, and you will get it back!), I likely wouldn't charge her rent, but that's just me. Maybe a refundable deposit, like apts have, just in case she has accidents, etc., to cover repairs after the fact. Whatever increase in utils occurred, it would be nice to have her cover that amt - it's easy enough to figure out how much more these cost by comparing the last year's bills to current after mom moves in, but it will be a ball park and maybe need to be averaged so the payments are consistent or just have the old bills on hand each month and charge the diff in the new bill (save your old bills with the new ones, for proof!) As noted, cable wouldn't likely increase, but if it did, that would be her share. Food - same idea as utils, if you combine all food/supplies, she covers the increase over previous monthly costs. If she has special items needed, use her own CC, debit, checks to buy these separately and keep the receipts! The only other issue is care-giving. She may only need a little assistance now, so is it worth all the hassle to charge for it? But, over time that can increase, so it would be good to have a plan, a sliding care-cost, with more payment for more services. I wouldn't have a clue how to draft that doc, I would rely on someone who can draw up a plan and charges for each task.