Selling Real Estate on Behalf of Your Aging Parents in Illinois

 Posted on October 29, 2024 in Real Estate

As our parents age, unique circumstances may require that the family make the difficult decision to sell their home. If your parents are over 60 and they have decided to sell their home, they might turn to you for help. Likewise, in the event your parents are incapacitated, it may fall to a member of the family or to you to sell the home.

There are unique personal, legal, and tax considerations that come into play when selling a home on behalf of a senior parent. An attorney experienced in real estate matters can advise you on some of the nuances of the law. 

Personal Considerations

Assuming your parents are able to make decisions on their behalf, before embarking on selling real estate on behalf of an aging parent, it is advisable to have a conversation as a family to weigh the pros and cons of selling the home. This discussion should include the state of the real estate market, the effect of any health issues your parents may have on where they will live next, what your parents have for retirement savings, and other factors. This will ensure that everyone is on the same page about the decision to sell the home and prevent disputes between family members.

Legal Authority to Sell a Home on Behalf of an Aging Parent

One of the most important aspects of selling your aging parent’s home is determining whether you have the legal authority to do so, including whether and how you may obtain the right to sell their home. As a general rule, absent special circumstances, your parents will have the legal right to sell their home, but there are situations where you may legally sell your parents’ home on their behalf.

Power of Attorney

A power of attorney is a legal document that allows you to make decisions for another party. There are a number of considerations when seeking a power of attorney:

• An incapacitated person may not grant a power of attorney. This is something that you and your parents should discuss early on to ensure that you have the ability to look after their rights and sell their home on their behalf. 

• There are different types of powers of attorney, and you should ensure you execute a power of attorney that empowers you to sell your parents’ home. 

• In the case of aging parents, it may be best to execute a Durable Power of Attorney, which only comes into play if a person becomes mentally incapacitated. 

Guardianship

If your parents are not able to make legal decisions for themselves but you have not obtained a power of attorney on their behalf, you will have to file a petition for legal guardianship. As your parents’ legal guardian, you will be able to make financial decisions on their behalf. There are a number of procedures you will have to follow which include obtaining information about your parents ‘ health and filling out and filing guardianship forms with the court. Please note that a guardian has certain legal rights and responsibilities which go beyond the ability to make a decision about selling real estate. 

Tax and Government Benefit Considerations

There are tax issues to consider when selling a home on behalf of a senior. Depending on whether your parents will use the proceeds from the sale of a home to pay for assisted living, they may be able to obtain tax breaks and exclusions from the sale of the property.  For seniors who receive financial assistance from the government such as Medicaid or VA Benefits, you should evaluate any effect that selling a home may have on those benefits. 

Contact a Naperville, IL Real Estate Lawyer

The decision to sell your aging parent’s home is not easy. The legal requirements will vary depending on whether your parents are able to make the decision to sell on their own, as well as whether there are already documents in place giving you the authority to sell their home. At Gateville Law Firm, we understand when children want to protect their aging parents. For this reason, our Yorkville, IL real estate attorney can advise you on navigating the complexities of your parents’ particular case. Call 630-780-1034 to schedule a free consultation today.