What Happens to My Property If I Move to Assisted Living?

Transitioning into assisted living is a big step, and one of the biggest questions seniors face is what to do with their property. Whether it's your longtime family home or a condo you've owned for years, this decision carries huge emotional and financial weight. There’s no one-size-fits-all answer, but understanding your options can make the process clearer and less overwhelming.

In this article, we’ll walk through the most common paths such as selling, renting, keeping, and estate planning, and explain how each one can impact your future security and peace of mind.

Selling or Keeping the Home

Many seniors look to sell their home to help cover the cost of assisted living, as monthly expenses in California usually range from $5,000 to $6,500. Selling can free up equity and simplify life, especially if there are no heirs who wish to keep the property. On the other hand, some choose to hold onto the home due to sentimental reasons or with the goal of passing it on to family.

Keeping the home means keeping responsibility for property taxes, insurance, and maintenance, which can be difficult to manage while living in a care facility. A reverse mortgage may be an option, but it usually becomes due if the homeowner lives in assisted living for more than 12 consecutive months. This rule applies unless a co-borrower or an eligible non-borrowing spouse remains in the home. It's important to explore this option with a financial advisor or a HUD-approved counselor. Your decision should reflect your long-term plans, care needs, and overall financial picture.

Renting Out the Property

For those who want to retain ownership but need extra income, renting can be a practical solution. Monthly rent payments can help cover assisted living costs without permanently giving up the property. This approach works well if the home is in good condition and located in a desirable area.

However, managing tenants, repairs, and legal responsibilities may become a burden. Hiring a property manager is a good option, but comes with added fees. It’s also important to update homeowners insurance and consult a tax advisor about rental income implications. While renting out your home has major benefits, it does take planning and oversight.

Impact on Medicaid and VA Benefits

If you're counting on Medicaid or VA assistance, it's critical to understand how your home factors into eligibility. For Medicaid, your primary home is often exempt while you're living in it, but if you sell the home or move out permanently, the proceeds could be considered countable assets.

VA benefits also have strict asset limits and look-back periods, which could delay or deny support if the home is sold below market value or gifted to family. These rules are complex and vary by state, making early planning essential. Working with an elder-law attorney can help ensure your actions don’t interfere with benefits. Transparency and timing are key when it comes to preserving your eligibility.

Estate Planning and Family Discussions

If passing the home to family is your goal, communication and planning can avoid conflict later. It’s best to involve all children or beneficiaries early to decide how to handle the home, furniture and belongings.

Some families choose to sell and split the proceeds, while others decide to transfer the property to one member. These decisions may trigger taxes or require appraisals, so legal and financial guidance is important. Be clear about your intentions in your estate documents. Planning now protects your wishes and reduces stress for your loved ones later.

Conclusion

Making decisions about your home when moving to assisted living involves financial, emotional, and legal factors. Selling, renting, or keeping the home all come with pros and cons that depend on your personal situation. If you’re relying on Medicaid or VA benefits, make sure your plans won’t unintentionally jeopardize eligibility.

Family conversations and professional guidance are essential parts of this process. If you’re considering a move and want to explore your real estate options, call Melina Rissone and let’s talk about what’s right for your future.

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Melina Rissone

Having sold properties for more than 20 years and earning various prestigious awards throughout the course of her career, Melina Rissone has more than earned her reputation as one of San Diego's most skilled and trustworthy real estate brokers selling homes and luxury condominiums. Her loyal clientele would share that Melina brings structure and planning to chaos. She specializes in supporting her clients and their referrals; families and individuals going through divorce and seniors and active adults planning their moves and financial decisions during their retirement years.

Coldwell Banker Global Luxury and Institute of Luxury Home Marketing certified.

Certified Senior Advisor by the Society of Certified Senior Advisors
Cartus Network Inventory Specialist and Cartus Network Marketing Specialist since 2015.
RCS-D Designation, a Real Estate Collaboration Specialist for Divorce.
SRES Certification through NAR is a Seniors Real Estate Specialist certification.
Melina is bilingual in English and German.
Recognized as the Top 4% of all real estate brokers in San Diego County in 2021 and the Top 3% of Coldwell Banker International.
Coldwell Banker Presidents Elite Award.
Recognize as the Top 2% of Coldwell Banker West in 2024.
Coldwell Banker Global Luxury and Institute of Luxury Home Marketing Certified.

Melina is on point, extremely resourceful and well connected. She has a very versatile knowledgebase so was able to help guide us in many areas I was not even expecting from an agent. I've referred her to several friends who all reported great experiences. She takes her role in representing her client very seriously so its not like some kind of half time gig thing. She gets it done.

-Dan C.