Selling Parents House to Pay for Care

The decision to sell a parent’s home, specifically selling parents house to pay for care, is a crucial one and requires careful planning and consideration. In this guide, we’ll delve into the various aspects of selling a parent’s home, from deciding when to sell, preparing the property, navigating legal issues, understanding financial implications, managing emotions, exploring alternative financing options, and working with professionals. Let’s embark on this journey together to ensure the best possible outcome for your parent’s senior care.

• Careful consideration should be taken when deciding to sell a parent’s home for senior care.

• Selling to a local real estate investor offers hassle-free sale with no need for repairs or fees

• Working with professionals can help facilitate the legal and financial aspects of selling a parent’s home.

Determining the right time to sell a parent’s home for senior care is of great significance, as it can facilitate the funding of long-term senior care, lessen total monthly costs, and absolve family members of the responsibility of maintaining the home. To make an informed decision, factors such as the real estate market, personal circumstances, and the emotional impact on the senior should be taken into account, especially if they are transitioning to a senior living community.

When considering the sale of a home, it is important to understand the current real estate market.

Why Selling To A Local Real Estate Investor Like Us Makes Everything Easy

Transacting with a local real estate investor such as ourselves is advantageous, as we provide a rapid and straightforward sale, no impediments due to financing, no requirement for repairs or refurbishments, and adaptable payment choices. Selling a parent’s home to a cash buyer can be beneficial, as it offers a swift sale, ease of use, and no need to pay for repairs or real estate agent fees.

However, it is important to be aware of any tax implications and consult the Internal Revenue Service (IRS) for guidance on reporting the sale.

Selling Before Moving to Senior Living

If the parent is facing financial hardship, has adequate time to plan, or resides in a market favorable to buyers, it may be a good time to consider selling their home prior to transitioning to senior living. Selling before relocating to a senior living facility may assist in decreasing expenses, settling outstanding debts, and providing additional time to locate an appropriate care facility.

Any capital improvements made to the home should be documented and factored into the sale price.

Selling After Moving to Senior Living

Selling a parent’s home after relocating to an assisted living community or other senior living options offers several advantages. It facilitates home staging and repairs, allowing for a faster and more lucrative sale.

Moreover, selling after moving provides a smoother transition for the senior, both emotionally and logistically.



To prepare a parent’s home for sale, it’s important to declutter, downsize, depersonalize, clean, and make necessary repairs. Engaging a reliable real estate agent can also be helpful in navigating the selling process. When it comes to repairs, it is essential to ensure that the home is in satisfactory condition and abides by safety regulations.

Gathering important documents, such as those confirming the home’s value and sales history, is crucial for a successful sale. Prior to putting the house on the market, seniors or their families should be privy to key documents such as the deed, title, mortgage documents, and homeowners insurance documents. To find a reliable real estate agent, solicit referrals from acquaintances, investigate online, and interview prospective agents.



When it comes to the legal aspects of selling a parent’s home, obtaining a power of attorney or guardianship is essential to manage their financial affairs. Necessary documents and supplementary documents may be required to sell a parent’s home. To gain further information regarding selling their home and government benefits, seniors should consult an elder law attorney in their state or their local Area Agency on Aging.

Let’s explore the two legal designations that can enable adult children to make decisions for their ailing parents when selling their home: power of attorney and guardianship.

Power of Attorney

Power of attorney is a legal document that grants authority to a trusted adult child or other family member to act on behalf of a senior in order to fulfill their wishes, such as selling a house to pay for care. There are different types of POAs. General POA is one of them and durable POA is specifically designed for end-of-life decisions.

To establish a power of attorney, the senior must sign a document authorizing an individual to make decisions on their behalf. It is advisable to seek legal counsel from an elder law attorney who can assist in the preparation of the document and provide answers to any pertinent queries.

It is recommended to establish a power of attorney for a senior in the early or middle stages of dementia.

Guardianship

Guardianship is a legal process wherein a judge assigns a guardian to oversee the legal matters of an elderly individual incapable of making their own decisions. This designation is necessary when a parent has progressed to a stage of advanced dementia.



When a parent has dementia, there are certain legal considerations that must be taken into account when selling their home. The appropriate course of action is contingent upon the severity of their symptoms. If they are still capable of signing legal documents, it may be possible to acquire financial power of attorney to make decisions regarding finances. If their dementia is advanced, they will not be able to consent to granting you a power of attorney. In such cases, a petition for guardianship to the court needs to be filed.

Selling a parent’s home can have unforeseen financial repercussions, including influencing their tax situation or capacity to meet the criteria for government benefits. The amount of tax owed may influence the amount that is available for long-term care.

If a parent has held ownership of their home for a period exceeding one year and incurs a capital gain upon the completion of the sale, they may be liable for long-term capital gains tax.

Selling a parent’s home could render them ineligible for VA pension benefits and reduce their net worth, potentially hindering their capacity to receive long-term care assistance.

Tax Consequences

Tax consequences may involve capital gains taxes, which can be minimized with expert advice. A capital gain is the difference between the sale price of an asset and the adjusted basis of the asset. An individual can take advantage of an exclusion on up to $250,000 of profit earned from the sale of their primary residence. For married couples filing jointly, this exclusion triples to $500,000.

State capital gains tax rates vary dramatically. The lowest rate is 2.9%, while the highest can be as high as 13.3%. It is advisable to investigate your state’s capital gains tax rate and ascertain if your parent might be eligible for any exemptions.

Medicaid Eligibility and Asset Limits

The proceeds from a home sale may influence whether an individual fulfills Medicaid financial eligibility criteria. No look-back penalty is incurred upon selling one’s parent’s home for its fair market value (FMV). However, if a parent sells their residence for an amount below its fair market value during the Medicaid look-back period, Medicaid will impose a penalty.

The amount of the penalty is contingent upon the location of the parent and the disparity between the sale price of the residence and its fair market value.

Veterans Benefits Impact

Selling a parent’s home could potentially put them over the financial resource limit and, as a result, impact their eligibility for VA pension benefits. A veteran’s primary residence, vehicle, and basic appliances are exempt from their net worth limit.

A veteran’s net worth is determined based on their yearly income and possessions, comprising the fair market value of all real estate and personal property owned.



Selling a parent’s home can be an emotionally charged experience for adult children who may have spent their formative years in the house and have many fond memories associated with it. It is essential to be forthright, tolerant, and courteous, while including the elderly individual in the decision-making process.

Be candid and tolerant with respect to financial matters, and ensure that the elderly are included in any significant decisions.



If selling a parent’s home is not an option or if additional financing is needed, alternative financing options for senior care include bridge loans, immediate annuities, reverse mortgages, and government assistance programs. Bridge loans are short-term loans intended to provide capital while awaiting the conclusion of other financial transactions. An immediate annuity is a long-term arrangement between investors and insurance companies wherein the investor provides a lump sum to the insurance company, and in exchange, the insurance company agrees to provide regular monthly payments to the investor.

Reverse mortgages allow homeowners to access their home equity, with the loan, along with interest, being settled upon their passing, the sale of the property, or relocation. To be eligible for a HUD reverse mortgage, individuals must be 62 years of age or older, have the ability to cover Homeowners Association fees, property taxes, and other expenses, possess a substantial amount of equity, reside in the home as their primary residence, complete a counseling session, and have no delinquent federal debts.



Working with professionals such as real estate agents and elder law attorneys can help guide you through the process of selling your parent’s home and navigating the legal and financial aspects. An elder law attorney can assist with the establishment of trusts, powers of attorney, and guardianships, as well as provide counsel on Medicaid and other benefits. Many states provide free legal advice to seniors, so it is suggested to contact the Area Agency on Aging to find out about local resources.

The National Association of REALTORS member directory is an excellent source when looking for a knowledgeable real estate agent. It can provide accurate information and help make the process easier. For locating an elder law specialist, the National Academy of Elder Law Attorneys maintains a registry of elder law specialists.



Selling a parent’s home to pay for senior care is a complex and emotional decision that requires careful planning and consideration. By understanding the various aspects involved, from deciding when to sell, preparing the property, navigating legal issues, understanding financial implications, managing emotions, exploring alternative financing options, and working with professionals, you can ensure the best possible outcome for your parent’s senior care. Remember, you are not alone in this journey, and seeking assistance from professionals can make the process smoother and more manageable.



Can I sell my mom's house if she has dementia?

Since your mother has dementia, it is best to set up a power of attorney in the early or middle stages. If deemed incompetent, guardianship may be required to sell the house.

Can my parents sell me their house for less than it's worth?

Yes, it is possible for your parents to sell your house for less than its market value. However, certain considerations need to be made when doing so in order to avoid paying taxes on the difference in price.

For example, if the house is sold for less than its fair market value, the Internal Revenue Service (IRS) may consider the difference to be a gift. This means that the government has to change the system.

Can I sell our house if my wife has dementia?

If competency is established, a person with dementia can sell their home.

If there are issues, legal help should be sought.

When should I sell my parents house?

It is recommended to sell a parent’s house prior to death for the best outcome. Before selling, it is important to ensure you are prepared so that you can get the most out of the sale.

This means taking the time to research the market, understand the current trends, and make sure the house is in the best condition possible. It is also important to consider the impact of climate change.

What factors should be considered when deciding when to sell a parent's home for senior care?

When deciding when to sell a parent’s home for senior care, it is important to take into account the current real estate market, personal circumstances, and the emotional impact that the sale may have on the senior.

It is important to consider the current market conditions and the potential for a sale to be profitable. Additionally, it is important to consider the personal circumstances of the senior, such as their financial situation and any potential emotional impact that the sale may have.

Ultimately, the decision to sell a product has to be made.