Should an elderly woman under hospice care pay past due property taxes?

Hannah, your Dad promised you the house? "my dad would have to repay me for no house" You will not get the house, there is a reverse mortgage and Medicaid lien and now the property taxes. Sorry, but it's a false promise.

So there's a 10K prop tax debt due by 10/1 otherwise property goes onto tax assessor tax sale/tax reception list; prop owner is pretty well out of it and moving her could be very detrimental for all involved. And between you & the DPOA there is the funds.

That's it, correct? I'd go ahead and pay the taxes. It's a band-aid on the problem. But keep the RM from being called in and gives you time to try to figure out just how to make things work better in 2017. Since you have the $, i'd do it as it will just be too too much stress to deal with if all goes to hell with the RM, tax assessor the lady's health etc.

BUT I'd suggest you look into some sort of paperwork before taxes paid as to the $ used to pay the taxes. Dad as the DPOA can't likely do this, but you perhaps could do some sort of promissory note as to the 4K to pay the taxes. I'd get an elder law atty to review all this as you work for the lady, its your dad, etc it all gets quite murky as to commingling of responsibility, fiduciary duty, etc. Actually if the tax situation goes on for next year, year after... you want something to show an agreement to repay from the assets of her estate which will be her home. If its a promissory note, that's a secured creditor and it goes to be paid in probate after the RM but BEFORE any Medicaid MERP claim as merp usually is an unsecured creditor.

Depending on the value of the house and what is needed to make the RM repaid & released, there could actually be funds left after RM is paid. Those funds become assets of the estate assets then get paid to whatever claims are made on the estate. A secured creditor will be ahead of one that isn't. Just how probate is done will depend on your states laws. But secured ahead of unsecured is pretty standard. If she lives 5 more years, that's 50K. Thats not an insignificant amount of $. Give some thought if the situation is realistically supportable for years & years.

There are a few issues that could affect your decision:

1. You write that a lien will be filed after Oct. 1. I'm not familiar with NY delinquent tax laws but that seems to be quite rapid for defaulted taxes. I did do a quick check though and it seems as though NYC has a rapid tax default program, which is really quite draconian, although I did find there are some exemptions.

There are some NY posters here who probably have more knowledge on this issue than I do. As I wrote, I just did some quick searches but didn't have time to check out the statutes, which should be done.

2. Even if there were a tax sale, there would be a redemption period. Another quick check provided some more helpful information:

nolo website

3. If the taxes aren't paid and the RM mortgagee is notified, and if it institutes foreclosure, how much time this woman would have to find a different place to live would depend on (a) whether NY has foreclosure by advertisement or (b) in equity (by litigation). The former is shorter; the latter is longer.

4. Even if that happens, there still might be a redemption period, depending on NY law. Of course, by that time there are fees, and more fees added to the amount to be redeemed.

5. My personal opinion is that if you didn't pay, the situation would become very unsettling for all of you, especially the elderly woman, if she understands what's happening although it does seem as if she wouldn't be able to in her condition.

6. If the taxes aren't paid, and if the house is foreclosed for delinquent taxes, you face another major issue and that's where you and your employer would live - w/o funds from any sale, that could be a very daunting prospect to face.

So, if it were me, and since you're not concerned about repayment, I would pay the taxes. But I would also consider consultation with an elder or a tax law attorney to determine if there are other options that can be considered and if there are any other ways to make arrangements to pay the taxes in arrears.

Get a reputable tax attorney, who also knows a little about Medicaid. I wonder if they took all the medical expense deductions they could have. It sounds like you did not have good help with taxes if you had no warning about the result of selling all the stocks at once, and I have no idea if the lien on the house would mean what you think it does if it is already reverse mortgaged and a bank basically owns it and gets it when she passes. I don't know they could tap to repay any taxes if she has nothing left at the end, if all the monies went for her care. Sorry to hear you are in this fix because of such an innocent mistake on your dad's part!!

The mortgage company should be notified from the locality that the taxes are delinquent. Once notified they should intervene especially if the delinquent taxes are much less than the value of the mortgage. The mortgage company is not about to lose there entire investment due to tax delinquency..

Well, this probably should not remain a DIY problem/solution. Senior Advisor may be right, but whether what they decide to do about it is in your favor or not, it may be hard to say.

You might want to contact the mortgage people and let them know exactly what is going on. The town just wants their money and the bank might pay it because they don't want a 328K house taken from them. They may start default proceedings but this is a very long process now. Depending on the bank and other factors it could take up to three years. During this time the bank would rather have someone in the home that they feel will take care of the property for them. They will not throw someone out until they can complete everything legally.
This is the average for a typical loan default. Considering all that the bank can be very flexible some times in order to keep their loan current.

Just a clarification...liens must be paid before a purchaser takes title at a closing. Any title work for a potential purchase will reflect existing liens as well as requirements for addressing those liens.

In my commercial and personal real estate experience, purchasers were not responsible for liens.

Purchase agreements also typically have standard provisions requiring that the seller provide title free of liens, but subject to accepted "building and use restrictions and easements of record", as the standard language states. These are beneficial easements and transfer with the land. Tax liens do not.

What benefit would selling the house have since she's still alive? She will get nothing from the sale since the house has lost value. She is broke and the look back period would have a penalty period preventing a quick move to NH. Furthermore, RM companies have a deal with the government so they are going to get the money back even if the property is worth $10. Like I explained, she got a large bill for one year due to a mistake, she's been "near death" for a year so when the bill came and it was unable to be fixed, my dad just felt like she doesn't have the money and her time is short but a year later she's still here and there is a lien coming. I stated in my post above yours why calling a predatory RM company isn't a good idea at this point. Therefore, the bill will be paid. Advising the sale of the house and the moving of a 93 yo severely damaged and incapacitated woman during winter in New York might be the worst advice ever.

What you have to understand is that she had a massive stroke 10 years ago and upon release from the rehab hospital, the dr said she would die within a year. The "within the next year" diagnosis has been happening since then. My dad has done more than anyone could expect especially when he's not even a relative (she has no family). She outlived close to a million dollars for the home and property care. My dad is doing all this from the heart. He's not going to get anything and he has given up holidays, vacations, quality of life to keep his word. So just because I'm the one on here asking questions doesn't mean anything, he's not into computers or stuff like this. He is doing his best and let the bill go because he felt her immediate needs and limited time were more important but obviously, the Drs were wrong again and the situation has changed. Anyway, the issue is over and the bill is being paid tomorrow. Thanks for those who gave helpful advice. I really appreciate it ! :)