Alright, guys. I'm turning to the wisdom of SigForum for some advice. My mother was officially diagnosed with mild dementia about six months ago although we've suspected it for about a year. Her mother and one older sister died of Alzheimer's so we're expecting that.

About ten years ago, my mom worked with a family law attorney to draft a durable POA, healthcare POA, and will listing my brother and I. Since my brother lives 500 miles away, it pretty much all falls on me. I've been added as POA on all her bank/investment accounts and they are transfer-on-death. Her house is fully paid off and so is her car. Since she no longer drives as of a few weeks ago, I'm actively trying to sell her car.

It's her house that I'm most worried about. We're looking to move her into a senior apartment or "light" assisted living in the near future. She doesn't have a ton of savings so we'll probably need the money from the house to cover those expenses as time goes on. What's the best route to either get the house transferred into my name (and my brother's?) or make it easy for me to sell when the time comes? How can I limit my tax penalties?

Any other advice for managing the finances and estate would be greatly appreciated.

Thanks in advance!

If you have a durable power of attorney properly drawn, you should not need to put the property in your name, but can sell it as her attorney in fact.

Who handles real estate transfers? Escrows? Lawyers doing closings?

I would contact a title insurer and see if your durable Power of attorney is adequate to be relied on to execute the deed to a buyer.

I was in a similar situation with my father. He started wandering off and was twice found by the police. Talk about scary mid-night calls! I had power of attorney, so I placed him in an assisted living facility and then a skilled nuursing facility. We held an estate sale to get rid of as much of the household contents as we could. I then sold his house "as-is" to finance his stay in the SNF. When that money ran out, I applied for Medicaid, which covered him for the remainder of his life.

It is definitely a high stress period. Good luck.

quote:

Originally posted by GaryBF: It is definitely a high stress period. Good luck.

I'll echo that. Mrs. 'Hook is just now ending two years of taking care of her parents daily, and now that they've passed she's also the executor of the estate. She did/is doing all of this with an out-of-state sister who has done very little to help but is good at ensuring she will get half of everything. I am dealing with a mother who while mostly independent, is rapidly getting to the point of being unable to maintain her independence. (Thank goodness I have no siblings to deal with!)

So while I don't have any advice about selling the house, I do recommend you read the book "When Roles Reverse" by Jim Comer or at least a publication that covers this life situation in which many adult children will eventually find themselves. You've just stepped aboard an emotional roller coaster, so get mentally prepared to make some really difficult decisions that not everyone in the family will like, including how much time you need to devote to managing this situation.

Best of luck to you and your family, erikras. Always remember that good children take care of their parents.

A few things to consider:

1) Find out if the POA allows the sale of the house. In Louisiana a general POA does not, and the POA has to be specific for the purchase or sale of real estate. I imagine other jurisdictions may have variances as well.

2) The POA, while giving you the ability to act on her behalf, does not terminate her rights to act on her own behalf. Thus you still have to be careful about protecting her assets, as she could still be taken advantage of by unscrupulous people, or outright swindled by any of the many cons being run on the elderly. Either put the funds into an account that she cannot access, or take action to legally declare her incompetent.

3) Taxes should not be a problem. If she sells the house, the gain is largely tax exempt. If you and your brother inherit the house, the value at the time of succession will be your basis, so if you sell it afterwards for that amount, there is still no taxable gain.

Hook-most states allow the executor to claim up to a certain percentage of the estate as a fee for services. In KY that was 6 percent. It may not have been much, but my wife felt better getting a little bit more than the others after dealing with her mother's dementia for 7 years. Check it out.

Find a good in state attorney that handles these issues right away.
Start by paying them for an hour of there time to see what steps need to be taken.

quote:

Originally posted by honestlou:
A few things to consider:

1) Find out if the POA allows the sale of the house. In Louisiana a general POA does not, and the POA has to be specific for the purchase or sale of real estate. I imagine other jurisdictions may have variances as well.

2) The POA, while giving you the ability to act on her behalf, does not terminate her rights to act on her own behalf. Thus you still have to be careful about protecting her assets, as she could still be taken advantage of by unscrupulous people, or outright swindled by any of the many cons being run on the elderly. Either put the funds into an account that she cannot access, or take action to legally declare her incompetent.

3) Taxes should not be a problem. If she sells the house, the gain is largely tax exempt. If you and your brother inherit the house, the value at the time of succession will be your basis, so if you sell it afterwards for that amount, there is still no taxable gain.

Re: Point 3, gain up to 250K (single person) will be exempt from tax provided it is realized while she is alive and she lived in it 2 of the 5 years preceding sale. Time in the nursing home counts toward the 2 of 5 so you can move her to the home, sell the house while she is in the home and still exclude the gain. But if you wait too long (5 years) that exclusion goes out the window as the house would then no longer be a personal residence. Good luck with it. Not an easy road.

Thank you for all the replies as well as the two personal offers I received via email!

Lots to process and absorb here.

I ran into my first snag today with the POA. I had previously used it at two banks and a credit union. Today, I took it to the Auto Title Bureau to get a replacement title for my mom's car. They had no issue with issuing me a replacement title. I walk next door to the BMV to renew her license plates and they wouldn't accept the POA. WTF! So I can get a title for her car, but they won't sell me a damn little sticker to put on her plate?!?!

quote:

Originally posted by Fredward:
Hook-most states allow the executor to claim up to a certain percentage of the estate as a fee for services. In KY that was 6 percent. It may not have been much, but my wife felt better getting a little bit more than the others after dealing with her mother's dementia for 7 years. Check it out.

Thanks Fredward. That's all true, but unfortunately it doesn't apply when all the financial accounts are set up for POD split 50/50 between the daughters. In the will, the house is to be transferred to equal co-ownership by the daughters, so upon selling the proceeds will be split 50/50 as well. According to the family lawyer that leaves damn little to claim executor fees over. So in trying to make the transfer of assets easier, Mrs. 'Hook's parents inadvertently screwed her out of any executor fees.

So the only remaining assets are the contents of the house, which frankly isn't much. For her trouble Mrs. 'Hook is planning to keep all the proceeds from the inevitable garage sale though.

Sorry to hijack the thread, erikras. But hopefully there's something to be learned here by others.

I've always been led to understand that the general rule is this: first kid to show up with a pickup truck inherits.

It was a joke. Tough times when yer folks check out, good luck!

This literally comes down to the rights you have under the POA, in your state. If it is properly drawn to be 100% in your state you have no issue on RE. You can buy and sell as if you were the parent. Move her, sell, fund it etc.
I have battled banks and the DMV before but a properly drafted POA has the power of law and you will win even if you have to fight a little.
Good luck.

At the time of my Father's death i was listed jointly on the title of his condo, bank accounts and car. It made things a lot easier..but there were still some challenges despite his efforts.

If your Mom is still legally competent, and you have a suitable relationship, it might be a good time to consider joint ownerships

sorry..i know it's hard

One more time.
Many of us have had relatives die and war stories about our specific case. They may or may not mean anything in your case. Here is what I have learned.
This type of law is often state specific. What happens in Texas, Nebraska or New York may be completely different to your state. Or not.
I am not a lawyer and skeptical of any I don't know and haven't checked out myself. However, this is a case where you really do need to find and talk to a competent lawyer in your mother's state that deals in this area of law.
All the good intentions here aside, do this as soon as possible. If she is still legally competent then you got a big bonus but you never know how long that will last.

I am a strong advocate of living wills and trusts. I understand the laws are different in every state. When my Dad showed signs of early stage Alzheimers, we put everything they owned into a revocable trust with me as the trustee. My parents also did a living will at the same time. Years later it made the process of buying and selling property and handling their affairs go smoothly, and on their passing there was no probate. When talking to your lawyer I would explore a trust as an option.

Our prayers and sympathies, been there with my Dad, and dealing with the emotional/financial aspects helping taking care of my mother in law, bed bound at home some old age dementia, my wife and her sisters are all on the POA's, etc.

With my Dad and his Alzheimer's, very early on he added us to his back accounts and assured us the accounts were POD. It never occurred to verify this at the time. At his death, my siblings and I went to the bank to review things before we dispersed after the funeral. Lo and behold, we were only signatories on the main account; and in theory we were locked out until the estate was probated. Thankful for small town life, we were known at the bank, so they allowed us to write checks in support of the estate(funeral expenses & household bills) and were able to move quickly on getting his
will probated.

If you helped set up the account ownerships hopefully you're OK. Also when we revised our current wills, our attorney recommended having only one person named as executor with a secondary named as well.

going through this myself. Haven't had to sell my moms house yet but the following are some comments that you may want to consider.
Meeting with a lawyer is money well spent especially if you can find one who specializes in elder care. The assisted living facility should be able to recommend a good one.
In my state, Alabama, Medicaid will pay toward a skilled nursing facility after her money runs out. However, they require 5 years of the parent's financial records to ensure she's not given any money to children or hidden it elsewhere. So save receipts while paying her bills.
In my case, I was worried about my mom possibly wandering off so we considered a memory care center that had secure exits. It costs more of course.
May God bless you and your family.