Liz Weston

Dear Liz: Our mom is a recent widow, living in Seattle in a house that’s over 100 years old and worth about $1.2 million. She’s anxious about things going wrong, such as a recent sewer system repair to the tune of $10,000. She wants to have less uncertainty about her finances in general, live in a space that could support her aging in place and stay near her support system in that neighborhood.

All her children are 100% fine with her selling the house. We love the house, but we love our mother 1,000 times more. She and my siblings have talked about renting out the house and building a mother-in-law apartment on land near a home my sister owns, or remodeling a home my brother owns. I have suggested just selling and then buying a ready-to-move-in condo that would suit my Mom and her mobility.

I know she will be penalized when or if she sells the house, though. If she sold the house and wound up worse off, I’d never forgive myself. How can we find out more about her options?

Answer: Good news — your mom isn’t likely to owe any taxes on the sale of her home.

She lives in a community property state, so her entire house got a new value for tax purposes when your father died. If the home was worth $1.2 million when he died, that would be the value subtracted from the sale price to determine if there was any taxable profit. (In non-community property states, only his half would have gotten this “step up” in basis.)

Any increase in the home’s value since he died would probably be offset by the $250,000 home profit exemption available to homeowners who have lived in their primary residences for at least two of the past five years.

In addition to the options your family has already discussed, your mother also may want to explore “continuing care” communities that would allow her to live independently while providing assisted living or nursing home care as she ages.

These communities aren’t cheap. They tend to have hefty, up-front fees of $100,000 to $1 million in addition to monthly fees of $3,000 to $5,000 that may increase as her needs change, according to AARP. For those who can afford them, though, continuing care communities offer a potentially attractive way to provide future care without requiring a late-in-life move.

She’ll have the most options if she moves to a community while she’s still relatively healthy. AARP has more information about how to evaluate and choose a continuing care retirement community.