To Sell or Not to Sell: The Family Home Dilemma

The question of whether to sell the family home to fund aged care is a significant and emotionally charged decision that many families face as their loved ones require more comprehensive support. It’s a complex choice that involves both practical and emotional considerations. In this article, we delve into the factors to consider when deciding whether to hold onto the family home or to sell it to finance aged care.

Financial Implications: Selling the home can provide a lump sum to assist with funding any care requirements but it’s important to look at other impacts it may have. Under current rules your home may benefit from asset exemptions for the age pension and a capped value for age care. Understanding the impact selling your home has on your wider financial position is important and ensuring you understand these implications is essential in making an informed decision.
Emotional Attachment: The family home often holds sentimental value, carrying cherished memories and a sense of familiarity. Selling the home can mean leaving behind a significant part of one’s history. Families need to weigh the emotional impact of selling against the practical necessity of funding adequate care.
Alternative Funding Options: These might include government subsidies, pensions, investments, or insurance policies that could help cover the costs without selling the family home. Consulting with our financial advisers or Aged Care specialists can provide insights into alternative funding avenues.
Rental Income or Reverse Mortgages: Retaining ownership of the family home while exploring options like renting it out or considering a reverse mortgage could offer a compromise. These alternatives might allow the family to generate income from the property without completely letting go of it.
Estate Planning and Inheritance: Selling the family home may impact the inheritance that would be passed down to the next generation. Families should consider how their decision will affect their estate planning and the financial future of their heirs.
Market Conditions: The state of the real estate market can influence the decision. Selling at a time of favourable market conditions could maximize the financial gain from the sale.
Practical Considerations: Aged Care needs may change over time. If the decision is made to sell the family home, ensure that the chosen aged care arrangement aligns with the current and future needs of the individual. Moving multiple times due to changing care needs can be emotionally taxing.
Granny Flats: A recent change to legislation as made Granny Flats once again topical. While a granny flat arrangement may be beneficial in the future it is important to understand the hidden risks and consider if the costs to complete the agreement outweigh any future benefit.

Deciding whether to sell the family home to fund aged care involves a delicate balance between financial pragmatism and emotional ties. Families should seek guidance from professionals who specialize in both aged care and financial matters. Consulting a financial adviser from Cosca can provide valuable insights tailored to your specific situation. Open family discussions and expert advice can help guide this crucial decision-making process, ensuring the best possible outcome for both the well-being of the loved one and the family’s financial stability.

If you’d like to speak with one of Financial Advisers, you can request a Free Appointment to discuss your circumstances by filling out the form below. Alternatively, you can join us at one of our Free Seminars or Webinars on Aged Care by clicking here.