Why older homeowners should consider all their options before selling.
There’s a lot to consider before older homeowners sell their houses. What do I mean by this?
Let’s say there are a few older homeowners who we’ll call Mom and Dad. Mom has dementia and needs to live in a care facility. Dad is running out of money trying to pay for this, and the idea of selling the house comes up.
Sometimes people in this situation will have to do that, but there are other options. If Mom and Dad bought the house for $30,000 but they sell it for $1.5 million, they’ll have to pay hundreds of thousands in capital gains tax.
They could use a reverse mortgage, but that comes with some fees. Another thing to consider is that if Mom passed away, Dad could sell the house and incur much less tax.
If you’re considering selling the house, you should evaluate all your options. Once you sell, the house is gone. Many times, using a reverse mortgage until one of the spouses passes away can help.
If you have questions about this, feel free to call or email my team and me. We can connect you with a CPA and an estate planning attorney to ensure you’re making the smartest decisions possible.