Plan Early for Moving an Elderly Parent

Deciding Whether to Sell: This is a terrible time to sell a home, but if it's got to be done, it's got to be done. However, there is an alternative if the senior doesn't need the proceeds right way. The home could be rented out until the market improves, or you may find a renter who's willing to take a lease with an option to buy at a certain point. (Read more in How to Sell a House -- Fast.)

"By renting the house while the person moves to alternative housing, they may feel they have more control," says Brad Long, a Phoenix-area real estate agent. "It's not as final as selling a home, [and] the home is still a part of them, if they have special memories there."

Know the Tax Considerations: Get the facts in your state regarding how property taxes work for seniors. In states such as California, residents age 55 or over can move into a home that has the same or less value as their current house and maintain the same tax basis. Other states have similar statutes, so check with your accountant.

Moving In: Having a parent or a senior relative move in with you is a big step, not only emotionally but in terms of responsibility. "You become the primary caregiver and you have to evaluate if you're ready for it," says Nisen.

If a parent does move in and you pay for at least 50% of their living expenses, you're entitled to claim them as a dependent on your returns, and their health care needs, including any modifications to your home to allow them to live there, can also be deducted.

Get Help: Talk to your local senior services agency about resources that may be available to your family. If you need to buy or sell a home for a parent, look for a Realtor with a Senior Real Estate Specialist certification who has been trained to help those making the move to retirement.