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She has cognitive issues, my husband is POA and the house is in a trust. The money will go into a trust for her to use as needed but she needs to sign a document for the sale of the house. We are concerned this will upset her and not want to sell but she already lives with us and the house is just sitting there. We don’t have the energy to rent it or keep up with it. Selling is the best option.

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Just to make sure I understand the situation....

1.   The Trust is a Living Trust; the house was retitled and transferred by Warranty Deed into the Trust? 

Who is the Trustee, and who's the Successor Trustee?  

2.  If your mother "has to sign a document for the sale", I'm assuming she's the Trustee?   Otherwise, what would be the basis for requiring her signature, assuming the Trust provides the Trustee with authority to sell the house?

Closings typically require execution of a lot more than "a document."   Would this upset your mother as well?  

3.   If the house has been funded into the Trust and title changed accordingly, the transfer deed recorded, the authority to sell is vested in the Trust, and the proxy under the POA would not have the authority to sell, so that's really not relevant, if I understand the situation.

4.   Your opening statement indicates though, that you have already sold the house.   Has a closing been scheduled?  Has the title company raised specific issues about your mother's interest as well as the Trust involvement?

5.   Your mother "has cognitive issues"; is she able to understand, if she's the Trustee, that the house has been sold?  


Beyond those issues, which are critical, I think I would approach the sale as enabling her to have funds for her needs now and going forward.   You could also point out that the house isn't generating income, but is still expending it, in upkeep and taxes.   So selling would stop that wasted money, and general real income, at a time when the housing market is still hot.


I see that Newbie Wife posted while I was typing, and raised similar issues about vested title, and Trustee authority vs. proxy authority.   I don't feel like editing my post, so I'll just leave it - these issues in fact are critical.
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OP, your posting is a bit unclear. The header says the house is sold, but in the text body it mentions she needs to sign a document for the sale of the house. You also say the house is in a trust, and also that the money from the sale will go into a trust. If she's not competent, she can't legally sign any documents. If your husband has POA, is the POA document worded to allow the person holding the POA to sell real estate? If so, your MIL would not have to sign any document to sell the house. In addition, if the house is in a trust and your husnand is trustee, one would assume he can sell it for benefit of his mother. In our state, a copy of the original POA document has to be provided as part of the real estate closing; that original copy is taken temporarily so it can be on file before the deed transfer can take place. If the sale is taking place though a real estate agent, check with them. Or, it may be necessary to consult with a real estate lawyer. As far as telling your MIL, only you know how she might respond. Even if you tell her, she may not remember.

For legal advice, please consult an attorney and don't rely on advice from we well-meaning laypersons in the forum.
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reallyfedup May 2022
If the house indeed is titled in the name of the trustee of the trust, the trustee is the only one who can sell it. Of course, one should always look to the terms of the trust.
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I saw this in your profile: "My husband and I moved into another house so we could have my mother in law live with us. We both work from home. I am burnt out. He sees it too. We both need a break. Between working and caring for his mom I’m always feeling tired and stressed. Since Covid we haven’t been on vacation in over 2 years and now he won’t even leave the house for more than 4 hours at a time because he worries his mom will need us. I’m stressing for myself and also for him. We both need a break."

How long has MIL been living with you? I know your question doesn't have anything to do with this, but your username and profile suggest there is a lot more going on than what to do about selling her house.
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If your husband is POA he cannot sell any home held by a Trust. He would have to be made Trustee of Trust. I was both for my brother. His home was held in a Trust. Only the Trustee of that Trust can sell it, and you are right, the funds from the sale MUST go into the Trust. The trust can be used for her care when alive, then distributed to heirs on her death. This would mean the home is deeded/titled to the trust.
See a Trust and Estate attorney for this question. Take all deeds and POA, Trustee documents with you. Too important to leave to the Forums of the world. You have a serious duty in acting as POA and Trustee that is a legal duty with meticulous record keeping needed, and things must be done right.
Your POA will pay for the hour of time you need with a Trust and Estate attorney. Your MIL would not, if she is suffering from dementia, be required to sell anything. If she is NOT suffering from dementia she cannot be forced to do anything.
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She has to sign papers.
Will she comprehend what the papers are for? If so she will know the house is being sold. At least for the moment she will know.
You can tell her that there is a nice family that wants to buy the house and be as happy in it as she was with her family. That might make her feel a bit better knowing that it will go to "nice" people.
No matter what you tell her she will probably be upset with the fact that she is not going to be able to go back there.

NOW....
Use the money that you get for the sale of the house to:
Pay for caregivers so that you and he are not doing all the work. (I sure hope he is pulling his fair share since it is his mom)
Seriously consider using the money from the sale to pay for Memory Care.
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This is very unclear. Did you sell the house or are you planning on selling?

Your DH needs to read his DPOA. Does it allow him to sell his mothers house? Also, is there a clause saying to make the DPOA effective, Mom needs a formal diagnosis from one or two doctors. Your husband can do nothing if he does not have the right to sell and no formal diagnosis of Dementia.

If he can sell and has a formal diagnosis, Moms signature is not needed. She, if found incompetent, cannot sign any legal binding contracts. Your husband will sign his name followed by POA as her representative. I would make sure I understood the wording of the trust before I went ahead with anything.

Since you both seem burned out. I may take any proceeds you get from the sale of the house and place Mom in an AL or MC facility.
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As others have said, consult an attorney. Your husband is likely overreaching his powers with POA. He has to be the Trustee in order to sell a house in a trust.
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1. Who is the trustee of the trust?
2. Is the trust a revocable living trust?
3. What are the terms of the trust? Does the trust allow the house to be sold?
4. Check with your or your mother's CPA. What sort of tax impact would sale of the house have?
5. If the house is truly in a trust, it would have to be titled in the name of the trustee of the trust.
6. Only the trustee can sell the house, in accordance with the terms of the trust.
6. Your husband as POA agent has no power over the trust.
(State laws vary.)
7. If your MIL is trustee of the trust, she can sell the house if she is competent to conduct her financial affairs.
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