When a parent moves into assisted living, families are often left with a difficult decision: what happens to the house? For many adult children, the family home is the biggest asset and a potential way to pay for ongoing care. But can you legally sell a parent’s house while they’re still alive and in assisted living?
The short answer: yes, it’s possible — but it depends on ownership, legal authority, and financial planning. In this blog, we’ll walk through the scenarios where selling is allowed, what obstacles you might face, and how selling the property could impact your parent’s long-term care funding.
For more details on this subject, see our full guide: Selling a Parent’s House to Pay for Care in California.
Understanding Who Owns the House
The first step is determining who actually owns the home. If your parent is the sole owner, only they (or someone with legal authority on their behalf) can decide to sell. If the property is jointly owned — for example, with a spouse — both parties must agree to the sale.
Ownership also matters for Medi-Cal eligibility, since a primary residence is usually treated as an exempt asset while your parent is alive. That means keeping or selling the home could affect long-term care benefits.
According to the California Department of Health Care Services, a home is considered an exempt asset during a Medi-Cal recipient’s lifetime, but it may still be subject to estate recovery after death.
Legal Authority to Sell
If your parent still has the mental capacity to make decisions, they can legally sign the paperwork and sell the house themselves. This option is the most straightforward since no additional court involvement is required. However, if they’re in assisted living due to dementia, Alzheimer’s, or other health conditions that affect decision-making, you’ll need formal legal authority to move forward.
Power of Attorney (POA)
If your parent signed a durable power of attorney before losing capacity, the named agent can step in to manage real estate transactions. This document essentially allows someone else to act in your parent’s place, but it must specifically grant the authority to sell property. Since not all POAs include real estate powers, it’s important to carefully review the terms to avoid legal complications.
Conservatorship
If no POA exists, you may need to petition the court for conservatorship to gain authority. This process can take months and involves ongoing court oversight, but it’s sometimes the only way to move forward.
The California Courts provide guidance on how conservatorships work and when they’re required.
Financial Implications of Selling
Paying for Assisted Living
Selling the house can free up funds to cover assisted living expenses, which in California often cost $4,500–$8,000 per month depending on the facility. Families often use sale proceeds to ensure consistent care without going into debt.
Impact on Medi-Cal
If your parent is on Medi-Cal, selling the house could change eligibility. The cash proceeds from a sale are counted as assets, which might push your parent above the financial threshold. Planning ahead with an elder law attorney can help protect eligibility while accessing funds.
The National Council on Aging explains how Medicaid (Medi-Cal in California) may recover costs from estates and why selling a home requires careful planning.
Taxes and Capital Gains
There may also be tax consequences. If your parent has lived in the home for at least two of the past five years, they may qualify for the federal capital gains exclusion of up to $250,000 ($500,000 for couples). However, if they’ve already moved into assisted living and haven’t lived in the home recently, this exemption might not apply.
Emotional Considerations
For many families, the decision isn’t just financial — it’s deeply emotional. The family home often carries decades of memories, and selling it can feel like closing a chapter. Open communication among siblings is key to avoiding conflict.
Example: A family in Glendale struggled when their mother entered assisted living. Two siblings wanted to sell the house to pay for her care, while another wanted to keep it. After months of tension, they agreed to sell to a cash buyer, splitting the proceeds and ensuring their mother’s care was fully funded.
How to Sell a Parent’s House While They’re in Assisted Living
- Confirm Legal Authority: Make sure your parent or a POA/conservator can sign documents.
- Review Financial Impact: Consider how the sale affects Medi-Cal, taxes, and future inheritance.
- Decide on Selling Method: MLS, auction, or cash buyer (as-is).
- Gather Documentation: Title, mortgage info, insurance, and any liens.
- Communicate with Family: Align expectations before moving forward.
Example: A Pasadena family sold their father’s home to cover assisted living costs. They skipped months of repairs by selling as-is to a local investor, allowing them to focus on his care instead of the property.
Alternatives to Selling Immediately
Renting the Home
Renting out the property can provide a steady stream of income to help cover assisted living costs. This option allows the family to keep ownership of the home while generating monthly cash flow. However, it also comes with landlord responsibilities like maintenance, tenant issues, and possible vacancies, which can be stressful during an already difficult time.
Reverse Mortgage
A reverse mortgage allows your parent to tap into their home’s equity without selling it outright. The loan provides cash either in a lump sum or monthly payments, which can be used to pay for care. While this option helps keep the home, the loan balance grows over time and must eventually be repaid, usually after the homeowner passes away or permanently moves out.
Living Trust Planning
Transferring the home into a living trust can simplify inheritance and help avoid probate after your parent’s passing. This strategy doesn’t immediately free up funds for care, but it offers long-term protection for the property. Families often use living trusts alongside other tools to reduce legal hurdles and preserve assets for the next generation.
The California Department of Aging provides resources on planning for long-term care and alternatives to selling outright.
Final Thoughts
So, can you sell a parent’s house if they’re in assisted living? Yes — but you’ll need to consider ownership, legal authority, Medi-Cal rules, taxes, and family dynamics.
For some families, selling the home is the best way to cover care costs and relieve financial stress. For others, exploring alternatives like renting or trust planning may make more sense.
For more guidance, see our in-depth guide on selling a parent’s house to pay for care in California.
At Mrs. Property Solutions, we’ve helped many California families sell parent-owned homes quickly and compassionately. If you’re navigating this decision, reach out to us — we’d love to help you find the best solution for your family.