A few years of that and there's not much left from the house sale. Maybe $50 to $100k as a wild guess.
That's a worst case scenario from both angles. They don't have enough assets to pay for their own long term care, and they probably have too much assets to qualify for medicaid long term care (even assuming they live in a state where that's possible).
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My dad needed care for about a year. His wife (not my mom) was a damned angel and shouldered most of the work. Their retirement income was enough to pay for their usual expenses, but long term care is thousands per month and they couldn't pay for it themselves. About all I could do was reduce contributions to my 401k and hand over the money so she could hire some help. The stock market was on a roll at the time so it didn't feel like a setback, even though it probably was.
The intrusive thought was that we knew he wouldn't last forever, so whatever burdens and costs we had to deal with were temporary. "Long term" in medical speak is 90 days or more, not necessarily 10+ years, which is what I tend to think long term means in every day speech. Not to be a jerk, but how fast are they declining? (Don't answer that, but it's something your family should ponder)
Final surprise was that when my dad finally died, his side of SSI and retirement income disappeared so his wife was kind of shocked when she realized she had to pay rent and food and bills all by herself, whereas formerly his share of retirement income was probably close to 65% of the total. I worked with her and we eliminated a bunch of silly "he signed up for what?!" bills and once the medical bills trailed off she was in an okay position.
One more intrusive thought is that if someone dies in your home in some states you have to disclose that and it really puts off buyers, reducing the market value of your home. I pondered moving my dad and his wife to our house (we have a spare bedroom) but it would have been 2nd floor (which made it a no-go) so I didn't have to give myself a guilt trip over being selfish about preserving my own home's value.
It helped that I loved and admired my father so I didn't really fret over anything, it was just another thing to deal with as a family. Having to deal with two people in decline at once would really suck though.
Advice-ish?
* if you and your wife and other family members can reduce retirement contributions, the cash flow might not be too big of an issue and you can hire help to take the place of their daughter not being available
* you or your wife should take over their finances, obtain durable power of attorney and medical power of attorney, and eliminate whatever unnecessary expenses you can
* even if they don't have much assets, create or update their wills/living will, funeral plans, etc
* possibly get a non-medical/non-nursing type person who can affordably just hang out with them overnight at baby-sitter rates and keep them company, get them drinks and snacks, etc without costing as much as physical care assistants. (I considered that but my dad's wife was willing and capable so I didn't pursue it much further.)
The overall goal being to allow them to stay where they are now, and just up the level of in-home care so they can be comfortable there without becoming a day-to-day care burden upon people who will not enjoy it (and who will build up anguish over the situation). Very likely they will continue to decline and need more care, but you can kick the can further down the road at least until inevitably $DEITY will take over long term care of them regardless of anything else.
And of course, I'm agreeing with everyone else, the situation sucks.
