Updated

More and more Americans are keeping it all in the family these days, as multi-generational living -- where three or more generations share the same household -- continues to rise.

In 2014, a record 60.6 million people, or 19% of the U.S. population, lived with multiple generations under one roof, according to a recent analysis of Census data by the Pew Research Center.

Maybe it's because of lingering economic fallout from the recession, increasing lifespans, or different cultural norms in our diverse population. Whatever the reason, sometimes preserving family harmony among cohabiting adults means creating an extra layer of privacy.

Enter the in-law suites, aka granny suites. They're converted garages, basements, sheds, and attics that contain living, bathing, and cooking quarters that allow Grandma or Junior to live in a separate but connected space. There's privacy -- often a separate entrance or at least a locked door -- but there's also enough togetherness so that help, if needed, is only a holler away.

"Many seniors want to retain their independence but live in a more age-friendly environment," says Todd Nelson, business development officer at LightStream, an online consumer lender that finances, among other things, in-law suites that can range from $40,000 to $125,000. "While that may seem like a lot upfront, they can save families thousands of dollars in the long run."

If you're considering adding your own in-law unit, keep these tips in mind.

Assess needs

Before deciding where you're going to create an in-law suite, discuss the remodel with your parents or adult children to find out what they need and want.

Older adults might have trouble climbing stairs, seeing in dim light, or reaching up or down. For them, a suite in a converted attic could be too difficult to access. Adult children, on the other hand, might prefer one large, open, loft-like space.

Whatever you construct for elderly relatives, make sure to incorporate universal design. This includes wide doors and raised cabinets that can accommodate walkers and wheelchairs; lipless shower stalls that eliminate tripping hazards; walls reinforced with plywood that can anchor grab bars; and lever door handles that are easier for old and young hands to grab.

Know your options for in-law suites

In the best-case scenario, your in-law suite should have a bedroom, sitting room, bathroom, and kitchen area, so whoever's living there can maintain their independence.

You can go all out and build a 300- to 600-square-foot standalone granny pod in your backyard, which could cost as much $125,000. Or you can throw up an addition, which will cost an average of $32,700 to $63,000.

But you'll save money if you convert underused space you already have. Here are some options.

Most garages -- attached or detached -- are uninhabitable in their original state. Although they might have drywall and electricity, most don't have adequate (or any) heating or air conditioning, enough insulation, the proper number of wall outlets to meet residential building codes, or any plumbing.