Selling the family home
When is the right time?
In large urban settings, this is a key question for many families, but it can be an especially poignant decision for elders, that is, those over 65 years of age, regardless of where they reside. When is the best time to sell this significant asset? Downsize to a bungalow? Move to a new condo? What about a retirement complex that provides extra services?
For the elderly, this question carries a great weight. Perhaps they have raised their family in this home and enjoy entertaining the grandchildren in the large backyard. The loss of independence is devastating to many seniors.
But at some point, despite market trends and housing prices, a decision must be made to sell the family home and move to accommodations more appropriate to aging lifestyles. Ultimately, this is a lifestyle and financial choice.
Creating a financial plan
From a financial planning standpoint, the sale of the house does not typically attract any tax concerns. When a real estate asset is sold a capital gain will be realized, however Canadian residents may be able to shelter the capital gain from taxation when the principal residence is sold by claiming the Principal Residence Exemption. Further, by selling the house prior to death, the asset will not pass through the estate, thus avoiding probate fees on death.
All elders can benefit from a detailed financial plan to anticipate future care and lifestyle costs and the possible benefits of selling the home and investing the proceeds for future care needs.
To help prevent the exposure to elder financial abuse:
Selling the family home can have a significant impact on the financial realities of living a long lifetime, but more emphasis should be placed on the individual’s goals for independent living and community connections.
Interested in reading the full article?
Contact us for our Tax and Estate Planning education article: Selling the Family Home. We also have a case study entitled The case of the fourth ring.
Case of the fourth ring
The title sounds like an old school detective story. But creating an estate plan can require some investigation and maybe even a little detective work.
Take the case of Alice, who in her 80s, while enjoying a healthy and independent lifestyle, took some initiative on her estate and will planning but made one critical misstep. She failed to communicate and consult with her heirs during the process, which is where much of the real detective work in successful estate planning takes place.
Request a copy of our case study “The case of the fourth ring” to learn how you and your family can avoid some common estate planning mistakes.
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