Moving into assisted living can be a stressful time. Additionally, for many people, one of the heaviest concerns is what to do with the house left behind. Do you sell? Offer it to family members? Rent it out? Read on as we sort through various options.
Source of Income
It’s no secret that assisted living communities can be expensive. In fact, some statistics indicate the average cost for an assisted living community in 2018 was approximately $4,000 per month. With that figure in mind, why not turn to your home as an ongoing source of income? Renting it out could be an ideal solution for many homeowners, as it not only provides a steady flow of rent, but it also preserves the home to pass along to family members later.
To make upkeep and handling tenants easier, consider connecting with a property manager to take that burden off your shoulders. Better property managers not only handle your house and lawn maintenance, but they are also available 24/7 to you and to your tenants and will keep you and designated loved ones in the loop about what’s happening with it. On top of that, professional property managers screen potential tenants carefully, easing your mind as to who is living in the house. Plan on interviewing prospective property managers so you know what you’re getting and feel comfortable with your choice.
Family Ties
Sometimes, seniors wish to transfer ownership of their home to a family member or friend. If you are considering this option, a quitclaim deed is the usual route. With a quitclaim deed, you transfer the ownership lock, stock, and barrel to the recipient. This can be a boon to the person receiving the gift in many ways, but as the Balance warns, you might need to pay gift tax.
Another option some seniors explore is joint ownership. In this case, you would want to think about how much ownership you wish to retain. There are agreements in which you and other parties share ownership equally in all regards, or agreements in which there would be limitations involved. There are some risks involved with this decision, and it would be in your best interests to talk with a real estate attorney before entering into this sort of arrangement.
Put it on the Market
Selling is a logical option for many seniors, although it can often be a painful one. The process of preparing a home in order to show prospective buyers can be a lot of work. Because you already have a great deal going on, one suggestion is to ask a family member to handle the prep work and showings on your behalf.
Note that most seniors will not need to pay capital gains tax on the home sale, although if your home is held in a trust you should discuss terms with an attorney before you sell.
Be Leary of the Look-Back
No matter what you decide, bear Medicaid in mind. As Forbes explains, there is a five-year look-back period for transfers of assets, including homes. That means if you sell your home or part of the ownership, Medicaid can charge penalties when you apply for coverage for gifts and sold assets for up to five years. Anything given away or sold more than 60 months prior is exempt. An elder law attorney could help you sort the details relating to the situation.
Leave Things as They Are
If you leave your home empty, make arrangements for someone to handle the upkeep. Empty homes can become vulnerable and run down — pipes can freeze in winter, lawns need routine care, the risk of theft increases, and so forth. Ideally, you could request a family member, neighbor, or friend who lives close by to tend it for you.
While there are no simple answers in these situations, there are several options to explore. Examine your circumstances carefully, talk things over with your loved ones, and get some professional advice as needed. With careful planning, you’ll make the right choice.
Sharon Wagner |
sh***********@se************.info
| seniorfriendly.info Reporting for Columbia Lutheran Home
