Is selling a parent’s house before death a good idea?

Deciding whether to sell your parents’ house before their passing is a complicated and emotionally charged decision. While it may initially seem easier to wait until after their death, this approach often comes with significant financial and logistical challenges that can burden the family during an already difficult time.

For one, the probate process can be a lengthy and frustrating ordeal. Settling an estate and gaining the legal right to sell a house can take several months – or even more than a year — depending on the complexity of the estate and how well prepared the will is. During this period, the family is left in limbo.

Then there are the costs involved. Probate and estate agent fees can take a significant portion of the inheritance before any funds reach the family. To make matters worse, beneficiaries may face large Capital Gains Tax liability if the inherited house has appreciated in value by the time it’s sold.

By contrast, selling the property while your parents are still alive can help avoid many of these issues. For example, parents can sell their primary residence without incurring any Capital Gains Tax, and the proceeds can be distributed as gifts, used to fund care costs, or reinvested to minimise future tax liabilities. 

In the UK, where approximately 31% of house sales fall through due to unforeseen complications, careful planning becomes even more critical.

Why might you consider selling a parent’s house before they die?

Deciding to sell a parent’s house while they are still alive is a complicated and emotionally charged choice. However, in certain circumstances, it can be a practical solution to meet financial, care related, or future planning needs.

Here are some reasons families might consider this option:

Illness & care needs

If a parent is suffering from a serious illness or declining health, selling their home may provide the financial means to cover the cost of specialised care. This could include funding a care home, paying for in-home carers, or covering medical treatments not provided by the NHS.

The sale may also simplify their living situation, allowing them to move into more manageable accommodation, such as assisted living facilities or a relative’s home.

Paying for care home fees

In the UK, care home fees can be significant, and if a parent requires residential care, selling their home might be necessary to fund these expenses. The local council conducts a means test to determine eligibility for care funding, and owning a property can often disqualify individuals from financial support unless it is sold.

Age & downsizing

Older parents may no longer need or be able to maintain a large family home. Selling allows them to move into a smaller, more suitable property that better suits their needs, such as  a bungalow or an apartment.

Downsizing can also free up equity tied up in the property, providing additional funds for leisure, healthcare or day to day expenses in their later years.

Planning for retirement

If your parents are still relatively healthy but nearing retirement, selling their house may help fund either their retirement plans or yours. The proceeds can be used in several ways:

Selling their house could also serve as a way to share the financial benefits with family members while the parent is still alive, making sure that their wishes are honoured and helping multiple generations achieve greater financial stability.

Preventing future complications

And, finally, selling your parents house while they are still alive could help avoid potential inheritance disputes among family members. It provides an opportunity to discuss financial decisions openly and distribute the proceeds according to the parent’s wishes.

It also eliminates the need for the family to go through the probate process after the parent's death, which can be time-consuming and stressful.

Steps to selling your parent’s house before death

Unless your parents are unable to make their own decisions, you must have their explicit consent to sell their house on their behalf. 

If they are unable to make decisions due to reasons such as illness or incapacity (e.g. dementia), you can only sell their house if you have granted legal authority through a Lasting Power of Attorney (LPA) for property and financial affairs.

It is illegal to sell their house without property legal authority or their informed consent. 

Here is a brief guideline on how you can sell your parents house before the inheritance process:

Selling your parent’s house isn’t just a financial transaction – it's an emotional process. Keep open communication with your parents and other family members throughout, ensuring that everyone feels involved and supported.

How does selling a parent’s home affect their estate?

Selling a parent’s home can provide financial flexibility and simplify estate administration, but may increase Inheritance Tax liability if not carefully planned. Consulting with estate planners or tax advisors is essential to understand the implications and explore strategies like gifting or trusts to minimise tax exposure.

Here’s what you need to know:

Should your parents set up a trust?

A trust can be a very helpful tool for managing the proceeds of a home sale and reducing Inheritance Tax liability. Placing funds from the sale into a trust helps preserve the Residence Nil Rate Band (if used to acquire a new residence or qualifying assets). 

All while allowing for better control over how the funds are distributed to beneficiaries, and shielding assets from care home fees or creditors.

How do your parents put you in the will before death?

Creating or updating a will is an important step to make sure your parents’ wishes are respected and their assets are distributed according to their intentions. 

If your parents don’t already have a will, they can create one with the help of a solicitor or a will-writing service. This document specifies how their assets, including property, money and possessions will be distributed.

If a will already exists, but does not include you, your parents can revise it by either creating a new will or adding a codicil – a formal amendment to the existing document. Any changes or updates to the will must be made by your parents while they have the mental capacity to do so and must be free from any form of coercion or undue influence. 

These conditions are essential to ensure the will is legally valid and reflects their genuine intentions.

Should you sell your parent’s property before death?

Selling your parents’ house before death can be a smart financial move if done correctly. By taking advantage of tax reliefs, planning strategically, and involving professional advisors, you can make sure the family home is transferred with minimal tax liability. 

Here are some of positives and negatives of selling your parents’ home before death:

Where’s best to sell?

Unlike selling through estate agents, where 33% of all deals collapse at the last minute, The Property Buying Company can offer you a guaranteed, secure sale. This peace of mind is invaluable, especially during emotionally charged situations.

Whether you need a quick sale to fund care costs or to settle financial matters quickly, we tailor the selling timeline to you. We can complete sales in as little as 7 days, far quicker than the average open market house sale. Avoid the hassle of preparing the house for viewings, The Property Buying Company buys the house as is, saving you time and effort.

As a thank you for using our service, we will cover all selling and legal fees, unlike traditional estate agents or solicitors. This means more of the proceeds go towards your parent’s needs or estate planning. You’ll receive a fair, no-obligation cash offer with no hidden costs, making the process stress-free and straightforward.