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Only you can make this decision, but in your stead I could not do this. I would know my own limitations could not stretch to attempt this.
Whatever your decision it is not one that you cannot change in the future. If she leaves her assisted living make it clear to them that you are going to "try this" due to covid and other reasons but that you are very uncertain as to whether it will work or not. Make the same clear to your Mom as it may fail for any one of many reasons. Remember, your Mom will not become mentally or physically stronger. Carpets can cause falls and hard basement floors can make breaks in 94 year old bones almost a certainty.
I wish you the best whatever decision you make. You clearly are trying to get all aspects of this together.
How long was she resident in the ALF before she fell?
Use the money to make her a cozy little apartment in the basement. Have her up for lunch & dinner a few times a week. Interview for a caregiver to take her for walks and shopping. Ask your sibs to call regularly and get relatives to send cards.
Hopefully mom will be able to enjoy some of her final years.
How would she get out in a fire if you and sitters were not home.
She is far, far safer in the AL.
Is her depression being treated by a geriatric psychiatrist or other well-qualified mental health professional?
Is there something in particular or is she fearful due to Covid? Has her facility been effected by Covid? Is it possible to place her in another facility that she is comfortable at? Or is she difficult to please?
Since you already know that you don’t really want to have your mom living with you I would be concerned that as time goes by you will grow to truly resent the situation and that wouldn’t be good for either of you.
I had my mom living with me for 15 years so trust me I completely understand the emotions that you are struggling with.
How dependent was she on the additional services provided by her assisted living facility? Unless you will have a ‘live in’ sitter, you will be helping her with what is needed. It is exhausting caring for an elderly parent.
Please don’t make this decision out of guilt. I sincerely wanted to have mom live in our home and it still did not work out. Oh, it wasn’t bad in the beginning and I felt good about it but as the years went by it became emotionally and physically difficult.
I am glad that you are reaching out at this stage. I didn’t know about this forum until I hit a burn out stage.
I thought the only way to show mom that I loved her was to have her living with me. That wasn’t true. I just didn’t know it.
Did you always get what you wanted in your life? This is no different. Keep her through the end of Covid but then she must go back.
Check with the building department on requirements for kitchens in the basement. And no, you would not be able to use mom's money to make improvements to your home.
What will happen when she can not do the stairs any longer?
Is there a bathroom that is large enough that you can get equipment into it and have room to move around? By equipment that includes wheelchair, Sit-to-stand, Hoyer lift.
Can you handle her living with you for another 1, 2, 4, 5 years? No one knows how long
If you do this you can charge her rent and a portion of the utility costs as well as any other household expense. You can charge her for your caregiving as well as anyone that is hired comes from her assets. I would also, to make things easier hire caregivers from an agency rather than on your own. If you do hire on your own make sure it is "legal" and that taxes are taken out and income is reported. Also make sure your homeowners insurance covers employees.