In what order should assets be liquidated to pay for Assisted Living expenses. I am thinking, savings account, cash in investment portfolio, car and finally house and contents. Any suggestions?

Investments continue to grow without costing you money like maintenance on a house does. Keep the investments as long as possible -- my mother's investments have almost doubled since she went into the nursing home two years ago, while her house's value has only increased a fraction of that amount while still costing her property taxes, the cost of a gardener, and other expenses.

I say sell the house and invest the proceeds. Remember, too, that if your parent held that house as joint tenants with a deceased spouse, the living spouse has a stepped-up cost basis to the value of the house on the date the spouse died. Example: My folks paid $45,000 for their house in 1969 and held it as joint tenants. My dad passed away in 2018, and the house was worth $1.7 million (It's California -- what can I say?). If my mom sells the house today, it's worth about $1.85 million, so she'd only pay capital gains taxes on the difference between $1.7M and $1.85M instead of the difference between $45K and $1.85M, because Mom's stepped-up cost basis is $1.7M. (This is why parents should never sign their houses over to their children rather than have them inherit them. The children won't get the stepped up basis if it's merely signed over.)

However, a tax advisor would be the smartest first step.
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Reply to MJ1929

Best financial advice out there! You want to search decumulation.
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Reply to BarbBrooklyn

You might want to talk this over with your CPA, or a financial advisor if you have one; depending on what sort of assets there might be tax ramifications.
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Reply to notgoodenough

I agree, sell the house first. I wished I had talked my Mom into leaving her house after Dad died. She kept up with taxes and bills but not the upkeep. Dad died in 2006, she came to live with me 2014. All her monthly income was used on a house she was not living in. Taxes alone were 6k a year, live in NJ. If she was still alive, she wouldn't make it now. Her SS ck would alone pay for xtra months in AL.

I cashed all Moms CDs in, they were getting hardly any interest so the penalty was nothing. I would cash in anything getting good interest as a last measure.

If think u may need Medicaid within 5 yrs, the house and car need to sell for Market Value. There are a few members that know finance. They will give u better info than me.
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Reply to JoAnn29
my2cents Feb 20, 2021
Agree - a house has expenses attached to it - taxes, insurance, maintenance. Savings and other assets along those lines do not. Good info you added about making sure to sell things at market value.
If your LO is not likely to go ‘home’ after time in AL, another approach would be to start first on the house, contents and car first. It will take time, during which you may need to go for the more liquid assets. But unless there are Medicaid benefits (eg a previous carer still living in the house – you do the checks), it may be a bad idea to get through the liquid assets and then wait for months while you get the house ready for sale.
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Reply to MargaretMcKen

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