Selling a parent’s house
to pay for their care.

Who can sign the sale

If your parent still understands the decision, they can sign themselves, even from a care facility. If not, it depends on what they set up earlier. An agent under a durable power of attorney that covers real estate can sign, since a durable power keeps working after the person loses capacity; the title company will review it well before closing. If the house is in a living trust, the trustee signs: your parent while able, then the successor trustee named in the trust.

Without either, the family usually needs a court to appoint a conservator of the estate, and a conservator generally needs court approval to sell. The court looks closely at selling a conservatee’s home, including why the sale is needed and whether your parent agrees, and the process takes time. It’s worth looking for a power of attorney or trust first.

How Medi-Cal treats the house

Medi-Cal covers nursing home care for people who qualify, but not room and board in assisted living. In Alameda County, its Assisted Living Waiver can pay for care services in participating facilities for people who need a nursing-home level of care, while residents still pay their own room and board.

For seniors and people with disabilities, Medi-Cal has an asset limit again. California dropped it in 2024 and brought it back on January 1, 2026, at $130,000 for one person plus $65,000 for each additional household member, or $195,000 for a couple. The limit has changed several times in recent years, so confirm the current figure before you sell.

The home usually doesn’t count. It stays exempt while your parent intends to return to it, or while a spouse or dependent relative lives there. Once it’s sold, the money generally counts toward the limit like savings and can end eligibility until it’s spent down. Giving that money away, or transferring it for less than it’s worth, can delay coverage of nursing home care, and different rules protect a spouse who stays at home. The rules are technical and changing, so please plan the sale with an elder law attorney.

Medi-Cal estate recovery

After a Medi-Cal member dies, the state can seek repayment of certain costs paid from age 55 on. Since 2017 that’s been limited to nursing home and home- and community-based care, plus related hospital and drug costs, and only from assets that go through probate. Property that passes by joint tenancy, a living trust or a transfer-on-death deed isn’t subject to it. The state doesn’t file a claim if the member leaves a surviving spouse or registered domestic partner, a child under 21 or a child who is blind or disabled, and hardship waivers exist.

Whether selling changes what the state could recover depends on how the house and the money are held, which is one more question for the attorney.

Taxes when a parent has moved into care

The home-sale exclusion normally requires living in the house two of the five years before the sale. If your parent can no longer care for themselves and lived there at least one of those years, time in a licensed care facility counts as time at home. So the move doesn’t by itself cost the exclusion of up to $250,000 of gain, or $500,000 for a married couple filing jointly.

One trade-off to ask a CPA about: a house sold during a parent’s lifetime keeps their original tax basis, while a house inherited at death generally gets a new basis equal to its value then.