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His step daighter ownes the property and he has a life estate. She is living in the house now. Will she have to move and the property sold?

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Assisted Living doesn't care what you own or who is living on what property. An assisted living facility will only care whether you can pay. Does Father have income/assets that enable him to pay for assisted living without selling the house? If so, hey, no problem.

Is Father thinking of applying for Medicaid? (I don't think that Medicaid typically pays for ALF, but there may be exceptions.) Medicaid does not require recipients to sell their home.

If Father needs/wants to sell the house, I don't think he can do that without his stepdaughter's agreement. Both parties have an ownership interest in the property and both must agree on the sale. And then who gets what portion of the sale amount needs to be hammered out.

Preparing to move into assisted living, including dealing with the house, should be discussed with an attorney specializing in elder law. It is complicated, and it can have an impact on Medicaid eligibility should he ever need to apply for that in the future. Doing it correctly is worth the consultation fees.
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Newman - if is actually is a "life estate" then it usually means that the property owner - the "grantor" your dad - has done a document that transfers ownership of the property to a "grantee" the stepdaughter, but that ownership does not happen until the grantor dies. Up until that dad owns it (and taxes on it are based on his over 65 exemptions) BUT stepdaughter has an interest in it. You need to get a copy of the LE to see how it is structured and what kind of exemptions or changes can be done to the LE. Most counties have it so that property documents can be easily downloaded for a small fee. This is all public information.

Or you can contact the attorney who did the LE for a copy of it and also set up and appointment to review it to see what can be done if need be. Good luck.
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