Moving to an elder care facility comes with many challenges. For one, the transition from living in your own home to a new environment can be difficult. However, it also raises the question: Should you sell your house?
Below are some important factors you need to consider first.
You can transfer ownership to the family or rent it out
If no one else will remain in the house after you move, consider transferring ownership to your next of kin, such as a child or other family member. This is a common choice for people who want to keep the house within the family.
Another option is to rent it out with the help of a property management company or perhaps a family member. Doing so could help generate extra income for future expenses.
However, keep in mind that both options have financial implications. If you keep the home in the family, you will still need to pay for the mortgage, property taxes and maintenance unless a family member assumes that responsibility. If you rent it out, the rental income could affect your Medicaid eligibility.
Selling the home can lead to other expenses
Selling your house will generate proceeds that could help pay for your elder care home, medical expenses and other needs. Furthermore, you will no longer need to pay for the mortgage and maintenance.
Nevertheless, other financial issues may arise. For example, if the home is not your primary place of residence, you may have to pay capital gains tax. And if your property in Delaware is an investment property or a second home, you would likely be subject to capital gains tax on any profit from the sale.
The proceeds may affect your government benefits
Medicaid looks at your income and assets to determine eligibility. Since the sale of a home would generate a significant amount of money, it could affect your eligibility.
On the other hand, Medicare eligibility and premiums are primarily based on age or disability status. The sale will likely not affect your eligibility. However, if you have Medicare Part B or Part D, you might see an increase in premiums, known as the Income-Related Monthly Adjustment Amount.
There are many challenges that go along with this process, but you can make the transition easier with due diligence and proper planning. Consulting an elder law attorney can also be beneficial in securing your future.