What Happens to The House When Someone Moves to a Nursing Home?
Millions of adults move into nursing homes as they get older. If you are planning to move into a long-term care facility, assisted living facility, or nursing home or you intend to move an aging relative to a facility, you may have many questions. Most people in your position wonder what will happen to the nursing home resident’s home when he or she moves to a nursing home. Will the home be sold? Will the home pass to the homeowner’s beneficiaries? Can proceeds from the home sale be used to fund nursing home expenses? How do the answers to these questions affect tax obligations? As the Gen X population ages, this is a question on many peoples’ minds.
Making sure that your assets are protected is a key aspect of the estate planning process. There are many different options that each have unique advantages and disadvantages. It is important to evaluate your choices carefully.
Homeownership and Moving to a Long-Term Care Facility
For most people, their home is the single most valuable asset they own. Whether it is a house, condominium, or apartment, our homes have great financial and sentimental value. When an individual moves into a long-term care facility, they are faced with the question of what to do with their home.
Trusts are a popular legal tool for placing a home in the control of a trustee when a person moves into a long-term care facility. Nursing homes and related facilities can be incredibly expensive. If an individual passes away with unpaid nursing home debt, the nursing home may look to the decedent’s assets to collect on the debt. An irrevocable trust may be used to protect a person’s home and other assets from the nursing home as well as other creditors. Trusts may also minimize estate taxes.
Selling the home is another option when moving into a long-term care facility. Proceeds from the sale may be used to pay for nursing home care or other needs. However, individuals who want to sell should be aware of how capital gains tax or the Medicaid look-back period may influence their decision. Transferring a home to a loved one such as an adult child is another option that may have substantial tax consequences.
If a homeowner does nothing and leaves the home vacant after moving out, expenses like property taxes and utilities will still need to be paid. Setting up a Power of Attorney gives a trusted loved one the authority to pay these bills and handle the maintenance of the home.
Call Us for Guidance
If you or an aging relative are planning to move into a nursing home, assisted living facility, or another long-term care facility, it is important to understand your options. Our Naperville estate planning lawyers can help you explore the possibilities and take the course of action that makes the most sense given your unique situation. Call the Gierach Law Firm at 630-756-1160 for a confidential consultation.
Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.