My mother has dementia and has been maintaining living at home until now. We believe she needs to have 24 hour care and she does not qualify for medical. We will have to sell her house and liquidate her small 401K to pay for it. I have a POA for her affairs, but I am not sure if I have the authority to sell her house on her behalf.
She can no longer be aware of any documents to sign.
How do I obtain the property documents needed to sell her home to pay for her expenses?
You can ask your mom if she has everything in a safe place out of concern and then learn where these papers may be.
With proper planning, there may even be PACE or other needs-based programs in your state that your mother could qualify for in the assisted living setting.
Talk with an elder law attorney in your state who knows the Medicaid regulations, and you can coordinate the house sale and the 401k liquidation with planning for eligibility for Medicaid if your mother needs a nursing home admission in the future.
When your mother meets the medical requirements for Medicaid paid nursing home care, there will be regulations in your state that allow your mother to use her life savings for non-countable assets, and/or to set the funds aside in a pooled trust for her supplemental needs.
The elder law attorney in your state will be able to:
review the Power of Attorney document,
confirm whether you have authority to sell the real estate (or need authority from a Court),
explain all of your Medicaid planning options, and
take care of all the details involved with real estate transaction for you.
Finding the right attorney who can handle all of these Medicaid planning and real estate tasks will save you time, allow you to focus on the priorities of life, and protect your mother now and in the future.
person would do for themselves. If you have a durable power of attorney it should mention your power to conduct real estate transactions. Have you read the actual power of attorney document? Please do, read it more than once. (Yes, it is boring.) Consult a real estate agent with the POA in hand. If you have ever sold a house yourself, it will be the exact same procedure with the same documents.
They have tons of requirements and clauses that can allow them to "call the note" they are a for profit industry. If this wasn't lucrative, they wouldn't exist.
During this time, the man in charge leasing the memory care apartments and I became friends. He was impressed that I was doing this for people who weren't even my relatives. Once Jim and Beth got there, he quit because his own father needed more care and he needed a flexible schedule to help with this father. His wife told him he should get his real estate license, so he did. Then he became my realtor, giving me advice on what to do or not do and a suggested "as is" price to ask. It took another 6 months to finally be ready to show and there was a shortage of low cost housing, so I told him to add another $20,000 to the asking price. The second couple who saw it bought it for that price. Those explicit POA documents with all the choices of authority spelled out opened all the doors I needed. Their bank was relieved there was someone to help them since Jim and Beth could not keep track of their finances any more and they were the ones who had notarized the forms, so there was never any questions about who I was and what I could do. I never told Jim all that I was doing and that I had sold their townhouse. I took the check directly to their bank and deposited it. It has paid for about a year of his care. I don't know what your POA forms look like, but mine is several pages long going into detail about what I can do. Good luck--there is much work ahead!
Read the document and verify that it has no stipulations. Then you handle it as if it’s your property. Of course, always inform the RE agent and all involved that you’re doing this on her behalf. You can google proper signing as POA and it’ll show that. We’re going through that now, as well. It’s hard because our mom cannot be told about it. It’s too upsetting and she gets very confused. I wish you good luck.
Your Mom was on Medicaid with her home as an exempt asset; then sold house so House sale $$ has increased her assets over 2k & made her ineligible for Medicaid, right?
You / mom reported the asset increase, right?
So what has Medicaid done regarding her assets?
Like did Medicaid send her a letter for a recoup or repayment of a specific amount of Medicaid costs incurred to date?
OR
Was she able to keep the $ but is now on a “spend down” using the house $ to pay for care and ineligible for Medicaid till she gets down to 2k in nonexempt assets?
The buyers, did they get a mortgage?
If so they probably were required to get title insurance. Do you have any idea IF Medicaid had a lien on the house that showed up in title search OR if there was a Medicaid Recovery release within the Act of Sale documents?
Best wishes to you!
If your not used to buying/selling property or gone thru lending, filing at courthouse, etc. it can seem overwhelming at times. I’m guessing this is new to you, so here’s my thoughts based on that viewpoint
Not to to throw shade on Realtors, but I’ve found the comps booklet Realtors give you (to get you to list with them) are skewed to homes with lots of upkeep & recent renovations. So comps are better price point for a listing, which may not be what your mom’s is. You want to find a Realtor that is the right fit for your situation. I’d contact several. Drive around your mom’s hood and note who’s doing listings and who with. Personally I think it’s better to go with an agent with a national group (like Keller Williams). Call a few Realtors and they can all provide you a look through at her home and a comps booklet.
If your mom’s home is more one with decades of delayed maintenance; no renovation with granite countertops and rainfall shower heads in multiple bathrooms; is filled with old lady and old family stuff, rather than “staged”, it is not going to get a top price. You need to price it realistically and that may be NOT at all what Realtor wants to put it at as they are looking for the highest commission = highest price.
If that’s likely, Here’s my suggestions:
- find last tax assessor bill. It should be in fairly recent mail, as most places send a notice/bill out in Oct or Nov as the taxes due January EOM 2019. See what assessor has for land value and house (“improvements”) value. Could it realistically sell for assessor value?
- also pls ck to see she’s current on property taxes. Jan bill is expected to be paid in full unless she has prior set up quarterly or semiannual payment without penalty as an over 65 homeowner. You might be able to get this still done but have to look into this ASAP.
- are there issues - like foundation- that make property unavailable for FHA or VA mortgage? If this seems to be the case, speak clearly with the Realtors as to how easy to sell it via a conventional mortgage. Some Realtors only do FHA/VA lending sales, (90% of sales) so unfamiliar with the extra layers & $$$ conventional needs.
- likely multi page checklist if this is a MLS listing. List goes over all the majors on the property, like roof, electrical, etc. The checklist usually a block Yes, No, Unknown. Check off unknown on all. It’s a CYA for you if buyer comes up with issues right before closing and wants serious price reduction. If Realtor pushes you to not do this, I’d get another Realtor.
- if property has serious deficiencies, you might want mom to have it inspected & appraised before doing a listing. Mom needs to pay for these. It gives you a defined figure to work from. Plus appraisal will have their license & seal on it so good legally to verify why it sold for below assessor value IF Mom should outlive her $ and actually need to apply for Medicaid later on.
- If anything needs to be done, like yard maintenance, mom needs to pay for all from her $. Should you pay for things & reimburse yourself from the sale, Medicaid will likely consider it gifting and place a penalty on her application. She could outlive her $ and apply for Medicaid as NH can easily run 8k - 15k a mo, so you want to be proactively planning for Medicaid on your radar.
- an “As Is” listing with a Realtor, you have to be really beyond firm on this. Often a potential buyer will want things done, like sewer line inspection or mold testing, and will want cost shifted totally onto seller. Your Realtor needs to be in your corner.
- If house has decades of delayed maintenance “as is” can mean selling at just land value. So look at tax assessor bill as to what that is.
- house flippers maybe will pay 30% of assessor value. There’s a lot of bad characters who do this, so beware of what you sign.
Some POAs are viewed as “springing” and if your is, it will be difficult to get stuff done. Springing DPOAs can be a beast to get things done with.
How old is this POA and was it drawn up by an Atty? If so I’d suggest you call their office to ask if the POA is good for all financials.
If it’s older and was more of a DIY, I’d highly suggest you get it reviewed by an elder law atty and perhaps get all mom’s legal updated. If she’s still living in her home and starting the beginning of dementia, she’s might just might still look & be competent & cognitive to sign off on paperwork if it’s the right time of the day & you’ve done a few drills on what the scene will be.
A better Realtor will have dealt with selling elders homes and they or their back office can review the POA to see if it will be ok for you to sign off on for a listing and the sale.
Her 401k.....if she’s over 70.5 yrs, she should have been taking $ out since she turned 70.5. It’s required.
She’s been doing this already, right??
If not, prepare yourself as there’s going to be a quite nasty fine attached to her 401k. I’d suggest you try to get into her 401k via on online portal if at all possible to see what’s what.
You go to the realtor and they will have the paperwork.