A move to assisted living usually happens faster than anyone planned. A fall, a hospital stay, or a doctor’s warning, and suddenly a family is touring facilities and trying to figure out how to pay for them. For many Maryland families, the house is the biggest asset, and selling it is part of the plan. If the house is in 21157 or 21158 and you’re dealing with a move to assisted living, see selling a house fast in Westminster. For a move to assisted living in Parkville or Carney, see selling a house in Parkville.
I’m Evan Weissman. I buy houses across Maryland, and a lot of the sellers I meet are adult children helping a parent through this move. This article covers the questions that come up most, in roughly the order families run into them.
Who has the authority to sign
If your parent can still make decisions and sign documents, they can sell the house themselves, with family helping. If they can’t, someone needs legal authority.
- A durable power of attorney that covers real estate lets the agent sign on the owner’s behalf. Title companies review the document closely, so get it to them early. See using a power of attorney to sell a Maryland house.
- A guardianship of the property, granted by a circuit court, is the usual path when there’s no valid power of attorney and the owner can’t sign. The court generally has to approve the sale. My article on guardianship and selling a Maryland house explains the process.
If your parent is co-owner with a spouse, both usually need to sign or be represented.
Talk to an elder law attorney before selling
Medicaid can help pay for long-term care, but its asset rules are complicated. Selling the house turns it into cash, which can affect eligibility. Giving the house away, or selling it to family below value, can trigger a penalty under the federal look-back rules for transfers.
None of that means you shouldn’t sell. It means the timing and structure matter, and an elder law attorney can tell you what makes sense for your family before you sign a contract. If cost is a concern, Maryland Access Point at 1-844-627-5465 can connect families with local options counseling and services, according to the Maryland Department of Aging.
The tax side of the sale
The federal home sale exclusion lets most owners exclude up to $250,000 of gain, or $500,000 for most married couples, if they lived in the home two of the last five years. IRS Publication 523 has a helpful rule for this situation. If an owner becomes physically or mentally unable to care for themselves and moves into a licensed facility, time spent there can count toward the use test, as long as they lived in the house for at least a year during the five years before the sale.
So a parent who moved out three years ago may still qualify. A tax professional should confirm it.
If there’s a reverse mortgage
A reverse mortgage usually comes due when the last borrower no longer lives in the home as their main residence. Under HUD’s rules for the common HECM loan, being away in a health care facility for more than twelve consecutive months generally counts as moving out. If your parent has one, contact the servicer early. My article on reverse mortgage payoffs walks through what the servicer will need.
The empty house in the meantime
Once your parent moves, the house may sit empty. That brings its own risks. Many homeowner policies limit coverage when a house is vacant for a long stretch, so call the insurance agent and tell them. Keep the heat on in winter, and have someone check the house regularly. My article on vacant house costs covers what to watch for.
Sorting a lifetime of belongings
This is often the hardest part emotionally. Let your parent choose what goes to the new place, which is usually far less than they want to take. Then give family a chance to claim items, and decide what to sell, donate, or throw out. You don’t have to empty the house before selling to every buyer. My cleanout options article explains the choices.
Timing the sale with the move
Assisted living communities often want the first month’s payment, or a deposit, before move-in. A listing can bring the highest price but may take months between preparing, showing, and settlement. A direct sale is usually faster and skips repairs and showings, but the price is lower. Some families use savings or a short-term loan to cover the first months of care while the house sells on the market. Weigh what matters most for your family: price, speed, or less work for everyone.
Keeping your parent in the loop
Even when an adult child is handling the details, most parents want to be part of the decision about their home. Explain the plan, the numbers, and the timing in plain terms. If siblings disagree, see when siblings disagree about a house. Many of the same ideas apply before an estate is ever opened.
Can I sell my parent’s house if they’re in assisted living?
Yes, if your parent signs or you have legal authority, such as a valid power of attorney or a court guardianship.
Will selling the house affect Medicaid eligibility?
It can. Sale proceeds become an asset, and transfers below value can trigger penalties, so talk with an elder law attorney first.
Does my parent still get the capital gains exclusion after moving out?
Possibly. IRS rules can count time in a licensed care facility toward the use test if the owner lived in the home at least one of the last five years.
What happens to a reverse mortgage when the owner moves to assisted living?
It generally comes due once the borrower has been out of the home for more than twelve consecutive months in a care facility.
Talk through your situation
If your family is working through a move to assisted living and wants to understand what the house could bring, call or text me at (410) 498-7473. I’ll give you clear numbers and tell you if listing makes more sense.