Knees that no longer like climbing steps, aging bodies that need constant care -- there are plenty of reasons many aging parents can no longer cope with independent living. If your mother must move to some level of assisted living, continuing to pay the mortgage on her house will be financially challenging.
Dollars and Cents
As of 2012, the average cost of assisted living is $3,300 a month. Unless your mother is very well off, that may suck up a significant amount of the money required for the mortgage payment, property taxes and other housing expenses. Medicaid may help pay for the cost of assisted-living if her retirement home is certified. However, your mother will have to exhaust her monthly income before Medicaid kicks in, so she'll still have nothing left for the mortgage.
If you want to hang on to the house -- so that you can inherit it someday, for example -- you and your siblings can take over the mortgage and other bills. Even if you can afford the payments, it may be a wasted effort. If your mother receives Medicaid, the state government can take the house as soon as she dies in order to recapture what Medicaid spent for her care.
If you're renting your current home, one option is to rent your mother's house. This offers the advantage of not having to pay for her home and yours -- but it's only practical if the house is in the right location and you can afford the payments. Another option is to rent out the house to someone else. Any rent payments above the housing costs will go to the nursing home, but in a way that's a good thing. As you're not worried about turning a profit, you can afford to hire a management company to oversee the house.
If keeping the house isn't financially practical, selling it poses other problems. When Medicaid decides if your mother's income qualifes her for services, it excludes the value of the house. If she sells the house, all the money gets factored in. She may end up disqualified for Medicaid and have to pay the proceeds of the sale to her retirement home. This is better than simply giving you the house, though. Giving an asset as valuable as a house could disqualify her from Medicaid for three years -- and she won't have the sale profits to make up for it.
- Forbes: A Startling Reality: Your Aging Parent Runs Out of Money
- AssistedLivingFacilities.org: Assisted Living Costs by State
- New York Times: Ask an Elder Law Attorney
- AgingCare.com: Who Pays for Mom's House After She's Moved to a Nursing Home?
- Department of Health and Human Services: Medicaid Treatment of the Home
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