If your parents are making the move to assisted living from their own home, you could be left with their estate in your lap. With their house unoccupied, how should you manage their property? Is it better to keep it or to sell it? Many adult children struggle with these questions during their parents’ transition to assisted living.
Here, we’ll explore options for your parents’ estate when they move into residential care.
Initial Tips For Managing Your Parents’ Estate
Discuss Estate Planning With Your Parents.
If they haven’t already, talk to your parents about professional estate planning. In estate planning, your parents will create guidelines for how they want their estate to be passed on to their beneficiaries. It’s a good idea for all elderly adults to enlist estate planning services to ensure that their assets will be distributed properly.
Gather All of The Information Before Taking Action.
As you’re making the shift to managing your parents’ estate, it’s crucial that you have all of the related information at your disposal. This includes monthly expenses, financial records, mortgage information, annual income, and insurance. After reviewing all of this information, you’ll have a clear understanding of your parents’ financial situation and will be able to make informed decisions.
Selling The Property
When your parents make the move to residential care, you can sell the property that they’ll no longer be residing in. There are a few main benefits to this strategy:
- By selling it, you’ll save money and effort that would otherwise be spent on maintenance, insurance, and taxes.
- Estate sales can be used to cover the cost of assisted living, or other expenses related to elderly care.
- If family members don’t live nearby the home, it will likely remain vacant. In this case, selling is often the most practical choice.
What To Consider When Selling Your Parents’ House
- Timing is important. Especially if your parents lived in the home for many years, selling it will be an emotional process. By delaying the process of selling your parents’ home, you can lessen the emotional intensity associated with the decision.
- Selling a home can be a work-intensive process. The house will likely need to be fixed up or renovated, and there will be a high volume of paperwork to complete.
- The real estate market in your area fluctuates, so now may not be the right time to sell. By waiting for the market to surge, you could have a far more successful sale. Talk to an expert real estate agent in your area to learn more about market conditions.
Keeping The Property
On the other hand, keeping your parents’ estate could be the right choice for your family. Keeping the property has its own set of benefits:
- It may be kept in the family for future use
- Your parents can keep the house and still qualify for Medicaid (a home one of the few valuable assets that you can own while you have Medicaid coverage).
- It can be a smart long-term investment. Especially if the real estate market in your area is likely to rise in the coming years, you could score big in the future by hanging onto your parents’ home.
Preparing For The Cost of Keeping The House
One of the main considerations in keeping your parents’ house after they move to assisted living is the cost. Taxes, maintenance, and home insurance can stack up, so it’s important to ensure that you’re financially prepared.
All homeowners must pay property tax on their real estate. Property taxes are determined based on the property’s value and local tax rates. Keep in mind that you may also owe estate taxes after your parents pass away.
Whether or not someone will live in your parents’ home after they move out, it will need to be maintained. Home maintenance can vary from plumbing to roofing to electrical wiring and more, so it’s important to budget a wide range for repair costs.
Homeowners insurance is necessary for anyone who owns a home. It provides protection for the property and the belongings within it in case of damage or theft. Home insurance policies can vary, but you’ll typically need to make a monthly payment for home coverage.
If the responsibility to manage your parents’ estate has fallen onto your shoulders, know that there are several courses of action available to you. Don’t be afraid to ask for help when you need it and utilize the many resources available to you.