When selling a house to pay for senior care, consider the timing, how it may affect eligibility for government benefits, and the emotions it can evoke. While some families may have the finances to pay for senior care readily available, others may rely on the sale of a house to pay for their loved one’s care. The decision to sell a house to pay for senior care will ultimately depend on a senior’s unique circumstances and care needs.
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The best time to sell a home will depend on each senior’s unique situation. Debbie Beard, a senior real estate specialist in Melbourne, Florida, regularly counsels families on the ideal time to sell a home.
“When I first meet a client, I look at their situation holistically,” says Beard. “How is their health? Why are they moving? It’s important to look at the whole picture.”
The main reason to sell a house before moving to senior living is to use the proceeds as the primary source of funds to pay for care. If a family chooses not to sell the home beforehand (or it doesn’t sell quickly), they must continue to pay home-related costs. This could include the mortgage, taxes, utility bills, insurance premiums, and maintenance costs on top of senior living costs.
There are several reasons why a family may wait to sell a house until after a loved one has moved to senior living. These typically include:
A bridge loan is a short-term financing option intended to help homeowners “bridge the gap” between residences. This loan may enable a senior to take advantage of their home’s equity before it sells, freeing up funds to pay for senior care in the meantime.
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Selling a home could affect a senior’s financial eligibility for certain benefits. Those who currently receive need-based government benefits (or plan to apply in the near future) should carefully review the eligibility requirements and evaluate the potential repercussions of selling their home. For example, the VA pension and long-term care Medicaid programs have the following net worth and asset limits:
Keep in mind that both the VA pension program and long-term care Medicaid program also feature a three-year and five-year lookback period, respectively. Gifting or selling assets (such as a home) for less than fair market value during this timeframe will result in a period of ineligibility for benefits.
An elder law attorney can provide legal guidance around selling a home and how it may affect eligibility for government benefits. Free legal assistance and benefits counseling may be available through local Area Agencies on Aging.
Whether selling a home will result in tax implications depends on several factors — namely the amount of profit made from the sale. Selling a house to pay for senior care doesn’t have to result in a hefty tax bill. In many cases, the proceeds from a home sale are tax-free. An individual can exclude up to $250,000 of the profits from the sale of a primary residence, while a married couple filing jointly can exclude up to $500,000.[02]
The IRS requires that sellers meet the following conditions to qualify for the exclusion:[02]
There are several situations when selling a home may result in the seller having to pay taxes. This includes when the seller doesn’t qualify for the exclusion, if capital gains from the sale exceed exclusion limits, or when the home is not a seller’s primary residence.[02]
Consulting with a financial professional or real estate attorney can help to clarify all of the tax implications related to selling a home.
Selling a house can elicit complex emotions. However, there are steps a family can take to make this a positive experience. Beard offers several tips for managing difficult emotions:
In certain scenarios, a family may need specific legal authorizations to help an aging loved one sell their home. A mentally competent senior can draft a power of attorney (POA), usually with guidance from an attorney, authorizing a trusted individual (or individuals) to act as an agent to help sell a home. An agent may be granted powers to help with logistical tasks such as reviewing and signing paperwork, or speaking with a realtor or attorney.
If a senior is no longer competent to make their own decisions, but they already have a POA in place, their agent can legally get involved with selling the home. If the senior doesn’t have a POA, then a family member or other trusted adult must petition the courts for guardianship to get involved with the sale of the senior’s home. It’s important to note that petitioning for guardianship is a more complex, lengthy, and expensive process than establishing power of attorney in advance.
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Knowing what to expect when deciding whether to sell a parent’s home to pay for care can be helpful. Our checklist can help seniors and their families prepare:
Consider consulting with an elder law attorney. They can answer questions about whether it’s financially beneficial for a senior to sell their home. Use the National Academy of Elder Law Attorneys search tool to find a local attorney.
Working with an accountant or tax attorney can also be a helpful next step. These professionals can offer guidance around the local, state, and federal tax implications for selling a house.
A Place for Mom’s Senior Living Advisors can help to assess your family’s specific situation, provide information about different types of senior living options like independent living, assisted living, or memory care, and discuss costs and payment options. Senior Living Advisors can also provide information about in-home care options for families who aren’t ready to sell a home but are exploring care options for their loved one. Plus, their guidance comes at no cost.
Yes, if they have the mental capacity to do so. If a person with dementia doesn’t have mental capacity, a power of attorney may authorize a trusted adult to act on the person with dementia’s behalf to sell their home. Without a power of attorney, a family must secure guardianship through the courts.
Seniors have several options when it comes to paying for long-term care, including savings, Medicaid, VA benefits, long-term care insurance, life insurance, and a health savings account .
If your mom has a valid financial power of attorney naming you as her agent, you may be able to sell her home. However, a POA must have been created when she was competent. One of the misconceptions about a POA is that it can be created after a senior is incapacitated.
U.S. Department of Veterans Affairs. (2024, May 8). Current pension rates for veterans.
Internal Revenue Service (IRS). (2024, September 27). Topic No. 701 sale of your home.
Caginalp, R. (2024, January 23). How much does a home appraisal cost? Bankrate.com.
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