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What assets should I sell- a home valued at $380,000 or $300,000 in fixed rate annuities- to pay for my elderly mother's end-of-life care?

My 84-year-old mother was just diagnosed with dementia and needs to go to a care facility. I have power of attorney and am also the beneficiary of her assets, including $300,000 in annuities (fixed rate 3% annually) and a house worth $380,000. To pay for her care, is it best to sell the house, or use the annuities? Is there another option?

Annuities, Real Estate, Senior Care
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February 2018

More information is needed to answer this question. A few major questions that need to be answered are:

- Have the annuities been annuitized already?

- Are the annuities out of their surrender period?

- What are the annual fees on the annuities?

- Are the annuities qualified (in a tax-deferred retirement account) or nonqualified (in a taxable account)?

- What penalties and/or taxes would you have to pay if the annuities were liquidated?

- What is term on the annuities if already annuitized? Do payments end upon her death or is their a period certain?

- What is the total death benefit of the annuities? Is it higher than the amount the house is worth?

- Is anyone currently living in the house? Is it rented? Does it generate any cash flow?

Depending on how you answer the above questions, either option could make more sense than the other, but as you can see, a lot more details are needed in order to help you decide which option is best as there's simply too many variables to consider. 

February 2018
February 2018
February 2018
February 2018