When your loved one moves into senior care, you may help them decide whether to keep, rent, or sell their home. Start by confirming who has legal authority to decide and whether your parent can pay for care without selling. If a sale isn’t necessary, your family may consider keeping the home, renting it, or leaving it as part of your parent’s estate. Understanding the financial, legal, and emotional consequences of each option can help your family make the right decision.
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Before making decisions about your parent’s house, confirm who has the legal authority to act. If your parent has the legal capacity to make the decision, they retain the authority to sell, rent, or keep the home. If you’re named as their financial power of attorney, you may act only when the document is effective and grants you authority over real estate. You must follow the document, applicable state law, and your fiduciary duties.
Your authority under a power of attorney ends when your parent dies. Responsibility for the home may then pass to an executor or other personal representative, a trustee, or another person authorized under the estate plan and state law. Consult a real estate or elder law attorney before signing a listing agreement, deed, lease, or loan document on your parent’s behalf.
To understand your parent’s wishes and intentions for their home, the budget for their care needs, and to get an idea of a decision timeline, ask the following questions:
| What to compare | If your parent sells | If your parent keeps the home |
|---|---|---|
| Money available for care | Estimate how much will remain after paying the mortgage, other liens, closing costs, and any taxes. Compare the net proceeds with your parent’s current and expected care costs. | Determine whether your parent’s income and other assets can cover care and home expenses. If the home will be rented, estimate the income remaining after vacancies, repairs, management fees, and other costs. |
| Mortgage, taxes, and other home costs | Continue paying the mortgage, property taxes, insurance, utilities, and other expenses until the sale closes. | Budget for mortgage or home equity loan payments, property taxes, insurance, utilities, maintenance, security, HOA fees, and property management. |
| Loan and occupancy requirements | Ask the lender how the sale proceeds will be used to pay off the mortgage, home equity loan, or other liens on the property. | Confirm that the mortgage and other loan terms allow the family’s planned use of the home. If your parent has a reverse mortgage, ask the loan servicer how moving out or renting the home could affect repayment.[02] |
| Insurance and local requirements | Tell the insurer if the home will be vacant before the sale and confirm what coverage must remain in place until closing. | Tell the insurer whether the home will be vacant, rented, or occupied by a family member. Check the insurance policy, HOA rules, lender requirements, and local rental or occupancy rules. |
| Condition of the home | Ask a real estate professional whether repairs would improve the sale or whether selling the home as-is may be more practical. | Identify immediate and future maintenance needs, estimate their costs, and decide who will arrange repairs and monitor the property. |
| Future use and management | After the sale closes, the family will no longer need to maintain or manage the property. | Decide whether the home will remain vacant, be rented, or house a family member. Identify who will manage it, how expenses will be paid, and how long the family plans to keep it. |
| Decision timeline | Consider when money from the sale may be needed for senior care and how much time the family will need to prepare the home and complete the sale. | Set a date to reconsider the decision as your parent’s care needs, finances, home costs, or family circumstances change. |
Use these steps to prepare for a decision about selling, renting, or otherwise keeping your parent’s home:
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Before deciding whether your parent needs to sell the house, estimate their monthly living costs and compare them with their income, savings, benefits, and other available funds. A Place for Mom’s senior care calculator can help estimate care costs in your parent’s area.
If all the following statements are true for your parent, keeping their house after moving into a senior living community may be an appropriate choice:
Selling the home can affect a senior’s Medicaid eligibility. For a parent who is now receiving or will soon receive long-term care through Medicaid, their home is generally considered an exempt asset. However, selling the home converts that exempt asset into countable cash, which will typically put the Medicaid applicant over the asset limit ($2,000 in most states) and end Medicaid eligibility until the proceeds are spent down.
Usually not after a permanent move. A reverse mortgage generally becomes due when the home is no longer your parent’s principal residence. If a move is temporary, repayment may be required after more than 12 consecutive months in a health care facility. A co-borrower may be able to remain, and an eligible non-borrowing spouse may qualify to stay. Ask the loan servicer or a HUD-approved housing counselor how the move would affect the loan and anyone still living in the home.[01]
If your parent keeps the home after moving to senior living, you or your siblings may eventually inherit it. Before treating a future inheritance as a reason to keep the house, consider whether your family could afford the property, agree on its use, and manage the legal and financial responsibilities.
Inheriting a house means you assume the costs, which include a mortgage and possibly home equity loan payments, property taxes, utilities and home insurance payments, security obligations, and property management. Review these expenses with your siblings and discuss:
A tax professional can help your family determine whether estate, inheritance, or other taxes may apply.
A homeowners insurance policy may limit or end certain coverage after a home has been vacant for the period specified in the policy.[02] Contact the insurer before the home becomes vacant or is rented to find out what coverage will be required.
Before renting an inherited home, confirm who has the legal authority to act and whether all owners must agree. Then check the mortgage terms, insurance requirements, HOA rules, and local rental requirements. Estimate the income that would remain after vacancies, repairs, taxes, insurance, and management expenses, and decide who would oversee the property.
If your parent received Medicaid, estate recovery could affect whether the family can keep the home after their death. The state may seek repayment for certain benefits from your parent’s estate, but it can’t recover while your parent has a surviving spouse, a child under age 21, or a blind or disabled child of any age. States must also provide a process for requesting an undue-hardship waiver.[03] Contact the state Medicaid agency or an elder law attorney to learn how these rules could affect your family.
If you’re helping your parent decide when to sell the home, ask a tax professional whether they could qualify for the home-sale tax exclusion. Your parent may be able to exclude up to $250,000 of gain, or up to $500,000 if married and filing jointly. Generally, they must have owned and used the home as their main residence for at least two of the five years before the sale. Special residence rules may apply if your parent moves into a licensed care community.[04]
If you inherit your parent’s home and later sell it, the home’s basis is generally its fair market value on the date of your parent’s death, although an alternate valuation may apply in some estates. Any taxable gain generally depends on the amount received from the sale, selling expenses, and adjustments to the home’s basis.[05] Consult a tax professional before estimating what your family may owe.
Don’t ignore the emotions that could arise in your family when deciding whether to keep a parent’s home. For many adult children, selling a family home — often the home they grew up in — can feel like a major loss, and siblings may not agree on the right course of action.
Here are a few ways to discuss the emotions connected to keeping or selling the home in a family conversation:
If you don’t come to a consensus as to what to do, make a date for another discussion to review the options.
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The parent remaining in the house must be able to continue paying the mortgage and other house expenses. If the parent in senior care is receiving Medicaid, check the state Medicaid office or consult an elder law attorney to learn about potential liens on the home and rules about spouse occupancy.
Your parent may be able to give you the house, but the transfer could affect their Medicaid eligibility and have tax consequences for both of you. Before changing ownership, help your parent consult an elder law attorney and tax professional.
A sibling who co-owns an inherited home may be able to ask a court for a partition. Depending on state law and the property, the court could divide the property or order its sale and divide the proceeds. Consult a local real estate or estate attorney.
Consumer Financial Protection Bureau. (2024 September 11) When do I have to pay back a reverse mortgage loan?
Insurance Information Institute. (2025, June 3). When no one’s home: Understanding the role of vacancy Insurance.
KFF. (2024, September 13) What is Medicaid estate recovery?
Internal Revenue Service. (2025) Publication 523 Selling Your Home.
Montana State University. (2024, September 13). Income tax impact while selling, gifting, or leaving property as an inheritance.
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