Mary mcgowan’s 92-year-old parents live on their own in Simcoe, Ont., a two-hour drive away from McGowan.

“They’re adamant about living on their own,” says McGowan, 59, executive director of Senior Link, a community support service agency in Toronto. “But they’re at a stage in life when they need a family member close by.”

Mc-Gowan is embarking on an approach many Canadian families have taken — and which some of your elderly or baby boomer clients may be considering: shared accommodations. McGowan and her brother are buying a home in Toronto that can be divided into three separate suites — one for the parents, one for her brother and another for herself.

“We’ll have our own spaces, but I’ll know immediately what my parents’ needs are,” Mc-Gowan says. “As they become more frail, we can increase the level of care.”

While McGowan’s parents are looking forward to the new arrangements, it is a solution that should be given careful consideration. For it to work, the expectations of all parties need to be discussed beforehand, and the specific living arrangements, finances and care duties should be detailed in a legal agreement.

Here are points for review:

> Consider Family Relationships. Encourage your client to look at all of the ramifications before making a move. Two or three generations living in close proximity can be a toxic mix in some families. “If your client had a stormy relationship with a parent, it probably wouldn’t work,” says Peter Silin, a social worker who operates Diamond Geriatrics Inc. , a geriatric-care management firm in Vancouver.

“And even if the relationship was a good one, living together could change the existing dynamic,” he notes. “Your [younger] clients should be aware that the arrangement may have profound effects on their marriages and on their family lives. It can also change their relationships with siblings who are not directly involved in the care relationship.”

> Living Arrangements. If both parties still want to go ahead, they’ll have to decide on the physical living arrangement. Mom might take the extra bedroom, for example, the basement could be turned into a suite, or an addition might be built.

Judith Wahl, a Toronto lawyer and executive director of the Advocacy Centre for the Elderly, says her mother came up with a workable arrangement. Wahl’s mother, who is now 84, had a separate apartment built on the back of her Toronto home; she moved into the new apartment, and Wahl’s sister and her family rent the rest of the house.

“I never have to worry about my mother,” says Wahl. “Ironically, my sister got sick and was debilitated for a year, and my mother became her caregiver.

“What I especially like,” she adds, “is that my mother owns the house.”

If a family decides to create a second suite, the plan must comply with municipal zoning and provincial building codes, and a building permit will be required.

Canada Mortgage and Housing Corp. (www.cmha.ca), through its residential rehabilitation assistance program, offers loans of up to $24,000 to create self-contained suites for low-income seniors.

Making space for another generation usually means a financial outlay. Building an above-ground addition will cost $130-$180 a square foot, depending on the quality of construction and the city in which your client lives. A basement suite can probably be created for a minimum of about $20,000. But the money spent can be a good investment. The extra space or renovated basement may increase the value of the home. And if the senior pays rent as his or her contribution, that money could go toward paying off renovation bills and running the household.

> Who Pays For What? The question of who will pay for what needs to be hammered out before calling a builder. “If this is the younger person’s house, who is paying for the addition?” Wahl asks. “Do the children foot the bill, then charge the parents rent? If the senior is paying for the work, he or she will have to be compensated for the investment, as well as the potential increase in the value of the home, should the situation not work out.”

Wahl recommends drawing up an agreement with a family lawyer that details who pays and does what. This document is a variant of a cohabitation contract, she says: “Your client needs to clarify who owns the house. If I were acting for the older person, I would counsel him or her to think very seriously before giving up ownership of a home.”

@page_break@The financial expectations of the caregiver should also be set down in the agreement. “Does the caregiver who moves into a parent’s house expect to own the house after the parent’s death?” Wahl asks. “Or do the other siblings expect to share the value of the house? Does the caregiver expect to be paid for the services he or she renders as the senior becomes more frail?”

Expenses of running the house need to be clarified. “Figure out beforehand who pays the taxes, the bills and the expenses of running the household — or households — and put this in the agreement,” Wahl says.

> Expectations. The expectations of all parties also should be examined. What does the older person want from the arrangement? Would it be simply a place to live, or would an elderly father expect to assume the role of family patriarch? Do the seniors expect to have meals with family members or keep to their own suite unless invited into the main part of the house?

And, if the house is being shared, which rooms will be private and which will be common to everyone? Can siblings drop in to visit their parent or parents whenever they like?

As well, your boomer client needs to keep in mind that this living arrangement can go on for a long time. “What if your client is transferred, becomes ill or his or her marriage breaks down and he or she can no longer afford to keep up the arrangement?” Silin asks. “And what happens if the senior requires in-home care or has to enter a long term-care facility? Is money available for this?”

This can also be detailed in a formal care agreement. Some seniors, however, are reluctant to get legal advice or sign a formal agreement before moving in with a son or daughter. A 2002 report by the British Columbia Law Institute’s committee on legal issues affecting seniors notes that some elderly people feel formalizing a care agreement indicates suspicion or lack of confidence in the younger person.

“A senior may hesitate to obtain advice out of concern not to hurt a caregiver’s feelings,” the report says.

This may be where you, as a trusted financial advisor, can step in and encourage an older client to seek legal counsel. You can also encourage your client and his or her family to enlist the help of a care manager such as Silin, who will sit down with all concerned parties and ask the hard questions about what they expect from the arrangement. IE