What Happens to the House When Mom or Dad Moves to Assisted Living?
Most families aren’t prepared for this moment. The house isn’t just a property—it’s the heart of your family history. Deciding whether to sell, rent, or transfer ownership often stirs up guilt, grief, and uncertainty.
But beyond the emotions, there are serious financial implications. Selling the home too soon, gifting it away, or renting it without understanding the rules can trigger unexpected taxes or even disqualify your parents from Medicaid or other benefits they may rely on for long-term care.
The Biggest Mistakes Families Make
When families rush these decisions, it can lead to major financial consequences. Here are some of the most common (and costly) mistakes we see:
Selling too early.
Selling before knowing what benefits your parents qualify for can make them ineligible for Medicaid and increase out-of-pocket costs.Gifting the home to a child.
This can trigger Medicaid’s five-year look-back rule, which penalizes transfers and may disqualify your parents from coverage for months or years.Assuming the home doesn’t count against benefits.
In many cases, it does—especially if no one lives there or the title is in flux.Renting without a plan.
Rental income can affect Medicaid and SSI calculations if it’s not structured correctly, leading to unexpected tax or eligibility issues.
Each of these mistakes can cost families tens of thousands of dollars or even six figures in lost benefits and equity.
Understanding Your Options
Before making a decision, you need to evaluate every angle — legally, financially, and emotionally. Here’s how to start:
1. Determine the Home’s Market Value
Work with a real estate professional who specializes in senior transitions to get a current market analysis and net proceeds estimate. Understanding your equity helps you make informed choices about funding care.
2. Review Ownership and Legal Structure
Who’s on the title? Is the home in a trust or owned individually? Sometimes restructuring ownership through a trust, LLC, or transfer-on-death deed can help protect the asset before a sale or rental.
3. Assess Care Costs and Funding Options
From assisted living to nursing care, the costs can vary widely. Explore whether a partial sale, home equity line of credit, or reverse mortgage might fund care without immediately selling the home.
4. Coordinate with Professionals
This is where teamwork matters. A real estate advisor, elder law attorney, and financial planner can help align strategies so your family doesn’t make a decision that backfires later.
Selling vs. Renting vs. Holding: Which Is Right for You?
Each option has pros and cons:
Selling: Provides liquidity for care but may trigger taxes or affect benefit eligibility.
Renting: Can generate income to cover care costs but requires proper management and tax planning.
Holding: Preserves legacy but comes with maintenance, taxes, and potential Medicaid complications.
A strategic advisor can help you compare these outcomes using real numbers—not emotions.
Why Working With a Senior Real Estate Specialist Matters
Navigating a care transition isn’t just about listing a home. It’s about protecting your parents’ financial future.
At The Novak Team, we help families in Snohomish County evaluate every option with clarity. We coordinate with elder law attorneys, Medicaid specialists, and CPAs to ensure your decisions align with both short-term care needs and long-term legacy goals.
We don’t just sell homes—we help families protect what their parents worked a lifetime to build.
Key Takeaway
The home your parents built their life in deserves careful, informed planning. Don’t rush into selling or gifting it before you understand all your options.
When you take the time to evaluate value, ownership, and eligibility, you’ll gain something priceless: peace of mind—knowing your parents are cared for, and their legacy is protected.
Free Resource for Snohomish County Families
If you’re facing this transition, we offer a free 30-minute Care Transition Consultation to help you:
Understand the home’s role in funding care
Avoid Medicaid penalties or disqualification
Explore your full menu of legal and financial options
👉 Schedule your free consultation today