Many adult children eventually have to address this question for the sake of their parents’ financial and emotional well-being, not to mention providing peace of mind for any safety concerns. Moving elderly parents out of their home can be an overwhelming prospect, especially if their home has been in the family for years. Yet it may be the right decision, depending on whether a parent has fallen recently, is unable to safely navigate their home, is experiencing loneliness, contending with memory loss or other issues that could jeopardize their health and safety. Read on for some thoughts on when your parent should downsize, when seniors should sell their homes, and what to look for when considering senior living communities.
Determining what’s best for your parent
One of the first questions to ask when wading into this process is “Would my parent benefit from moving into a senior living community?” The answer to that likely depends on your parent’s current quality of life.
- Are they still able to take care of themselves, or do they need help with activities of daily living such as grooming, bathing, etc.?
- Are they socializing with other people, or do they mostly keep to themselves?
- Do they make use of all the floors of their house, or has their routine narrowed to one or two rooms?
- Are they still able to go grocery shopping and cook on their own or would they benefit from chef-prepared meals?
- Are they driving, or are they relying on you (the adult child) to take them to doctor’s appointments, pick up prescriptions and grocery shop?
- Does winter still mean a season of get-togethers and festivities in their home, or is it fraught with the stress that comes from the risks of potential hazards of slips and falls?
If the answers to these questions highlight a growing concern that your parent is better situated in a senior living community, then you may consider discussing the topic of choosing a community for a short-term stay (often referred to as “respite care”). Short-term stays can smooth the transition of moving elderly parents out of their home and into a safer and more active environment.
How to pay for senior living
There are many ways to pay for senior living, but the most common method is to use private funds, such as savings, investments and selling high-value items such as antiques, automobiles, furniture or even selling your parent’s home. Other sources of funding include:
- Social security and retirement accounts (IRAs)
- Life insurance policies
- Long-term care benefit plans
- Veterans benefits
For more information, read this “How to pay for senior living” blog.
Deciding to sell the family home
If, after considering all of these options and talking to a financial advisor, you decide that selling the family home is your best option, then the next step is talking with your parent about how they want to sell their home. This is often a very emotional issue, so be patient and mindful of your parent’s feelings as you discuss the details, and read these tips for further insights.
Gathering financial information
As you can imagine, selling a home involves many financial details. Here’s a quick refresher on mortgages and tax laws you’ll want to familiarize yourself with before moving forward.
- Mortgages – If your parents took out a standard mortgage or a reverse mortgage, it helps to understand the difference. A standard mortgage means you pay the lender every month, paying against the principal owed on the home until you own it like any other asset. A reverse mortgage allows you to convert the equity in your house into cash (generally tax-free) without having to sell your house. So, in a standard mortgage, the mortgagor pays the lender. But in a reverse mortgage, the lender pays the mortgagors. If your parents did take out a reverse mortgage, the lender may send them a letter demanding payment within 30 days upon discovering that the house is no longer occupied (although those terms are often extended).
- Taxes – Let’s assume your parent put their house on the market and earns enough money on it to subsidize their care in a senior living community. Depending on the size of their profit, they may have to pay the IRS in capital gains. As with nearly all things tax-related, the specifics involved in the tax implications for your property can get quite complex, so consult a financial advisor or a tax specialist before making any long-term decision.
Assigning a Power of Attorney (POA)
If you and your parent have agreed that a senior living community is the best choice after reviewing all of the options – and your financial advisor agrees that selling the family home is the best way to finance this cost – there are more details to you’ll need to consider.
One of the next decisions that may crop up is who is selling their home. One option would be for your parent to handle the process of selling their property – provided they are not facing the challenges of memory loss or dementia, and are otherwise able to manage the details of the selling process, of course. If they’re already in a senior living community, they can work with a notary to finalize the required documents that the title company requires to complete the sale.
If your parent does not want to dedicate themselves to all the time involved in selling their house, or if they have been deemed incapable of overseeing the sale, you or someone else who your parent trusts may need to consult an attorney and discuss assuming power of attorney (POA) to sell it for them. AN attorney can walk you through the steps required to assign POA and draft the appropriate documents to ensure authorization is correctly and legally delegated.
Selling the house
Even if you and your parent have sold homes before, you may find that the process of selling their house and moving into a senior living community is different than moving into the next subdivision over. You may be familiar with working with running the comps on your neighborhood, listing your house, paying off any outstanding liens, staging the property, transferring the title, and so on. But if you sell your parents’ house, you and your family will probably need to address one final concern: What real estate agents sometimes call “the stuff.” And while it may be tempting to do it all on your own, hiring a real estate professional who has experience in helping older adults with the transition to senior living is a crucial step.
It bears repeating that, from the start of the discussing selling your parent’s home and throughout the process, you involve your parent in all decisions and take time to calmly and thoroughly address their questions and concerns. This can be a substantial amount of work, so be sure to request help from other family where appropriate.
Making sure it’s the right fit
Moving an elderly parent out of their home is a big decision, and you want to make sure that, if they decide to move into a senior living community, then it’s the right senior living community for them. A few matters to consider when conducting your research and taking tours:
- First impressions – Are the lawns mowed and the grounds maintained? Can you picture your parent walking into the apartments and the dining room and feeling at ease? Is the overall vibe caring and positive?
- Value communication – Does the community respond to your questions and requests in a timely manner? Were you sent a satisfaction survey that asked for your feedback? Do the staff members speak to you, each other, or the residents with courtesy?
- Assess the culture – Try to pick up on the clues that give you insights into the community atmosphere. Do the comments you hear about the residents indicate that they’re treated with respect? Can you get a sense of whether the staff collaborates as a team? Be sure to read reviews about the community. Is their reputation stellar, or do they have affiliations and partnerships that seem unsavory?
This is a lot of information to process, but answering all those questions can help you find the right community for you and your parents. Once you decide to make the move, be sure to read our tips on downsizing.
At Atria, we understand the difficulty involved in selling your parents’ house and all the financial and emotional complexities that come with that decision. Learn more about the prices and tax benefits of moving into a senior living community, and plug some numbers into our affordability calculator – which can help you compare the costs of senior living with the costs of staying at home – it may be more affordable than you think.
As a leader in the industry, Atria Senior Living is happy to share our expertise and offer any support we can – even if the support you need is from someone other than us. We can call on our trusted relationships with financial advisors, real estate professionals and resources to put you in touch with the best solution for you and your family, whether you’re moving to Atria or not. Feel free to reach out to your local Atria Community Director today.
Our Guide to Help Decide if You Should Sell Your Parent’s House (PDF)