What to Do with Your Assets Before Moving into Independent Living

What to Do with Your Assets Before Moving into Independent Living

What to Do with Your Assets Before Moving into Independent Living

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AdobeStock_421351129For many aging adults considering independent living, the idea of selling off significant assets, including their current home and other treasured possessions, can seem contradictory to the “independent” part of the equation. 

Yet there are times when liquidating assets represents the best option. There are pros and cons to most strategies for dealing with your assets before moving to a senior living community. Retirement planning options need to be considered carefully with your specific situation in mind. 

Why You Might Need to Sell Your Home

Some people are able to fund their new home in a retirement community through savings and income from IRAs, pension funds, or other assets. For them, a total downsize scenario may not be necessary. Some even opt to retain their former primary homes for a variety of reasons, such as being able to use them as guest houses for traveling friends and family.

Often, however, keeping your former home and paying for a new one in an independent living community just isn’t feasible. In addition, funds from selling that primary home or other assets might be needed to move to the retirement community.

Also, there are certain conditions in which you may be eligible for Medicare or Medicaid to supplement funds for your new independent living community. 

Alternatives to Selling

If selling your primary- or vacation home isn’t right for you, but finances are still a concern, you have other options. Talk to your financial advisor, as well as people in your life who might be willing to manage some of the details. Here are some ways to avoid selling your house if you prefer not to do so:

Rent Your Home

These days, rental options include long-term and short-term (i.e., Airbnb-style) situations (in which homes are rented to people who use them for short-term stays). By generating income that can help pay for your new home in a retirement community, a rental arrangement also can help you hold onto property to which you’re emotionally attached or wish to pass down to your children. 

However, it’s important to understand that rental properties require some type of manager. Factor in the cost of a professional manager if you need one, or talk to trusted relatives who live nearby. 

If you choose the rental option, you can be as loosely or fully involved as you want to be with property management. Outdoor-mounted and “doorbell” cameras can help you keep an eye on your property from the comfort of your independent living community


When Should You Get On a Senior Living Waitlist?

Transfer the Title

In some cases, you may be able to transfer the title of your home to a family member who is currently living there, although it’s essential to check the most current state and federal laws before doing so. 

In general, circumstances such as a sibling or child who has lived in the home with you for a specified period of time and who provided you with a certain level of care may allow you to transfer the title to them. 

In addition, a disabled minor may be given the title to the home, or it can be put into a trust to benefit a disabled person under 65. Again, it’s important to ask a lawyer for the most current guidelines before giving the title to someone else.

Considering Additional Assets   

If you are considering funding part of your retirement community expenses for health and care services, including short-term rehabilitation or long-term care with Medicare or Medicaid, you will likely be required to liquidate savings plans such as 401(k)s, pension funds, bonds, and IRAs. The same is true of anything that is not a primary residence, including cars, boats, valuable art collections, vacation homes, or investment property. 

Not surprisingly, many people have researched whether there are exceptions to these stipulations. Unfortunately, transferring these assets to family members is considered out of bounds by the Centers for Medicare & Medicaid Services (CMS) in most cases. Unless your situation meets precise standards, attempting to be “creative” with these assets could result in a sanction for a time in which you won’t be eligible for Medicare or Medicaid.     

If you’re not sure where you fall in terms of current rules and regulations, you’re not alone! A financial advisor is crucial to help you understand which steps to take to maximize your resources. If family members are helping you make decisions, they may want to consult an eldercare lawyer to find the most sensible way to deal with your assets. 

Use our own cost calculator to compare how living at Deupree House can be affordable while improving your quality of life with maintenance-free living.

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*This blog was originally published in 2021 and updated in 2023.

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Kristin Davenport

Kristin Davenport

Kristin Davenport is the Director of Communications for Episcopal Retirement Services (ERS). Kristin leads ERS’s efforts to share stories that delight and inspire through social media, online content, annual reports, magazines, newsletters, public re... Read More >

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