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When grandparents, parents and adult children decide to live under one roof, the arrangement is usually discussed around the kitchen table rather than laid out in a spreadsheet. While it can be a practical solution for families looking to manage rising costs, support aging parents or help care for children, what begins as a sensible solution can quickly become complicated when expectations are not discussed.

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Families may have different assumptions about mortgage payments, caregiving responsibilities, household expenses and decision making.

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Without proper planning, assumptions may lead to resentment, financial strain and family tension down the line.

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That is why a good financial plan is about more than just numbers: It’s about clarity.

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Multigenerational living has become a growing part of Canada’s housing conversation, from adult children staying at home longer to families pooling resources to manage rising costs. According to Statistics Canada, the number of multigenerational households rose by 21.2 per cent from 2001 to 2021. Unsurprisingly, that growth has coincided with rising housing costs and a higher cost of living, especially in markets such as Toronto and Vancouver.

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However, affordability is only one piece of the puzzle.

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Families are also adapting to longer life expectancies, delayed life milestones and job and housing markets that make independence harder to achieve. Aging parents may need more support while adult children may need more time to build financial stability. For many families, especially those with a cultural tradition of shared living, multigenerational households offer a way for families to organize care, housing, and financial support across generations. When planned well, the arrangement can lower costs, support child care and elder care, and free up money for goals such as education, a down payment or retirement.

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The challenge is that a multigenerational household often brings together competing financial and personal priorities. One person may be saving for a home and another paying off debt, while others may be preparing for retirement or managing care costs. For the arrangement to work, those priorities need to be guided by clear goals, open dialogue and a comprehensive financial plan agreed to in advance.

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The financial plan should clearly define the purpose of the living arrangement, the home’s ownership structure, how costs and responsibilities will be divided, cash flow needs and tax considerations.

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That doesn’t mean everyone needs to contribute in the same way. A good plan should also define caretaking and home-care needs. For example, adult children may provide more financial support while retired grandparents may help care for younger children. The goal is to bring clarity to potential issues and create a fair plan, so the living arrangement is sustainable and helps the family achieve its broader goals.

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Families who feel overwhelmed by the number of decisions involved, or who find it difficult to raise sensitive topics, may benefit from working with an adviser who can simplify the process, identify common pitfalls and ask difficult questions as a neutral third party. This can make it easier for family members to discuss sensitive issues without putting family cohesion at risk.