Helping Mom Sell the Family Home: Legal Tips for Adult Children

Helping a parent sell their home can bring up a mix of emotions. There’s often family history tied to the house, and the process can feel overwhelming. Many adult children aren’t sure where to start or what legal steps to take to keep everything on track.

If you’re helping your mom, dad, or another aging family member sell their home, there are important legal details to manage. Getting them right can help avoid costly delays and protect everyone involved.

Here’s what to look out for.

Confirming Authority: Do You Have the Right to Act?

The first question is whether you have the legal authority to manage the sale.

Power of Attorney

If your parent is handling the sale themselves, no additional authority is needed. But if you’re stepping in to manage the process, you must have a valid Continuing Power of Attorney for Property.

Without this, you won’t be able to:

• Sign listing agreements
• Finalize a sale
• Handle closing documents

If your parent is no longer mentally capable and no Power of Attorney is in place, you may need to apply to the Ontario court for guardianship. This can cause serious delays.

Having the right Power of Attorney in place early makes the process much smoother.

Confirming Legal Capacity: Can Your Parent Make the Decision?

If your parent is signing documents themselves, it’s important to confirm they still have the legal capacity to do so.

In Ontario, a person must:

• Understand the nature of the sale
• Appreciate what it means to transfer ownership and receive funds

If your parent’s capacity is in question, it’s best to involve a lawyer early. Capacity issues can lead to disputes later, especially if other family members disagree about the sale.

Checking the Title: Are There Liens or Ownership Issues?

Before listing the home, a lawyer should complete a title search to:

• Confirm your parent is the sole legal owner
• Identify any old liens or mortgages still registered
• Check for shared ownership with a spouse or other family members

Unresolved title issues can delay closing or even cancel a sale. A clear title gives buyers confidence and protects your family from last-minute problems.

Handling the Sale Proceeds: What Happens to the Money?

When a parent sells their home, the money from the sale belongs to them. If they are moving to long-term care or downsizing, the funds are usually used for their future housing and care.

Adult children should:

• Avoid mixing the proceeds with their own finances
• Keep clear records of where the money is held and how it is spent
• Understand that other beneficiaries may have a future interest in the estate

If your parent is receiving income-tested benefits, like the Guaranteed Income Supplement, the sale proceeds could affect their eligibility. A lawyer can help you review this.

Planning for Taxes: Are There Capital Gains?

In most cases, the sale of a parent’s principal residence is tax-free in Ontario.

However:

• If the home has been rented out in the past
• If it is a second property, such as a cottage

Capital gains tax may apply. Proper tax reporting is important to avoid unexpected bills.

Coordinating Family Expectations: Keeping Things Clear

Selling the family home can sometimes lead to tension between siblings or extended family.

It helps to:

• Communicate openly about the reasons for the sale
• Be clear about who is managing the process
• Keep detailed records to show that all financial steps are being handled properly

Having a neutral lawyer involved can help answer questions and prevent misunderstandings.

Next Steps

If you’re preparing to help your parent sell their home, it’s a good idea to review your legal documents and plan ahead.

Contact Jeffrey Murray Law for a consultation. We can help you confirm your authority, check title details, and guide your family through the process with care and clarity.