Was appointed full guardian of both my parents over a year ago. Dad passed away, mom is still in assisted living center. I'm running out of their cash assets to pay for her care. They have a paid off home worth 160K that I have rented out for $1050 a month.
As full guardian can I get a home equity loan for part of the homes value? I was looking to get 50K on a ten year loan. That would be approx $530 a month payments which the rent money would more then cover.
Don't really want to have to sell the house because would be losing the rent coming in to help pay her bills and the court rules for selling a house as a guardian almost makes it impossible to do so as you have to keep going back to court on every step of the sale for approval and I've been told that the whole process from when you get a buyer that wants to buy it takes up to 6 months. Not many buyers are going to wait 6 months to close the sale!!
I'm the only heir of my parents and they have no debt. I tried web searching for info on this subject but can't find any.
The whole house issue is sticky. I went through this for my mom's house which is worth somewhat less than your mom's, no mortgage & I am DPAO w/no siblings. Still have the house and she is in a NH on Medicaid. RM wouldn't work as you've found out, because unless they are living there, they are totally out of compliance for RM. Personally, I think RM are bad idea except for the young (62 - 69) old who can stay in the home for the next 10 - 20 years when the market should come back to make the RM profitable at the end. But I digress.....Some stuff to consider is what happens if moms needs change and she needs to go from AL to NH. How will NH be paid?? - would there be enough $ from her SS, retirement and other income and the rent to be able to fully private pay for the nursing home with money left over to cover all the nut (operating costs) on the house and any HELOC costs? What is the nut?, and can you personally pay it if need be without being an issue on your financial situation? Would this be an issue for your guardianship? If the $ just isn't anticipated to be there to private pay for NH, should she need that level of care, then mom will have to apply for Medicaid. Under Medicaid rules, the house is an exempt asset in most states as long as they have a reasonable right of return (so you need to check how this runs in your state). But under Medicaid rules, once they are in the NH all their "income" must be paid to the NH except for whatever her state has as her personal needs allowance ($ 35 - 90 a month). So in reality there will be no money of mom's to be used towards the costs of the nut if she should need to go on Medicaid.
Now this sounds tough, but when I was evaluating the house situation, I spoke with Realtors (those that actually close deals in her neighborhood). The consensus was that the house would be a most difficult sale (historical zone, odd lot with watershed issues) and the costs to make it with enough buyer appeal would run about 30 - 50K. Everybody expects granite countertops and rainfall shower heads. And most of the foreclosure homes are new & granite sexy. Plus the costs to have it on the market looking tippy-top & utilities 24/7 for possibly months and months. So for her, the $ was better spent on doing expensive needed dental work and other personal stuff and paying for her to be in IL. Now my mom is mid 90's and realistically, the house will not be an issue for years and years, which could be the case if she was in her 70's or 80's. The costs of the empty house are pretty much manageable & she has great neighbors (so i am most fortunate on both those). And since the house is empty, the costs to maintain it will be filed as an recoverable expense under her state MERP (Medicaid estate recovery) rules. If the property was rented or occupied by family living there full time, then that would not be the case for MERP. Although there may be other MERP exemptions.
Alot of house stuff has so much emotion attached for mom and perhaps for you also. I'd suggest you speak with Realtors to see what is a current scenario on selling the house. Have a heart to heart with yourself if you can deal with the house for possibly a decade or more and what mom's health situation might realistically be.
About the guardianship regs, yes they are nice & cumbersome. But keep in mind, that there are alot of homes right now under short sale situations, which easily can take 4 - 8 months. So a 6 mo sale for guardianship, is not all that strange. This too would be a good ? to pose to the Realtors. A good Realtor can work wonders and not all buyers need to move in yesterday.
One thing is that if you sell the house, you then have the proceeds to have mom in whatever AL or NH of your choice and have $ to do extra things for her. The court should like that. So if she wants to do the hairdresser twice a week, fine. Or get a tricked out HUGO walker with the insulated cooler seat, it's hers. One of the ladies at my mom's old IL had a face lift done with $$ from her house sale. The court would not find that amusing but you get my drift? As long as the $ is spend on them or their needs that's reasonable, it's all ok. Good luck.
I thank you for your answer.