Her house is in another state and being managed by a rental agency. She is a healthy 88 and I expect she will have several more years of good health.

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I’d highly suggest you as moms DPOA take a very detailed look at property costs and that mom is totally good on all insurances and whatever required with city/county on rentals and has a serious set aside of $$$ for repairs and is filing IRS and state taxes to reflect that rental income.

If she’s still with her old homeowners, that really must be a new policy to reflect that’s its a rental and insured to reflect 2019 rebuild costs. Homeowners require the actual homeowner to reside at the property. Rental property insurance will be a totally different creature and my experience is that the State Farm’s, USAA, etc will not do these, it’s going to be done by an independent insurance agent. If she’s owned it Mortgage free for a while, property is off radar for needing any other peril insurance (flood, windstorm, earthquake). But now that it’s rental, it really should have these added in in case something happens. NFIP / the federal flood insurance program is designed for homeowners with a 250/100k max and they will want to see a homestead exemption as well as a host of other items to be eligible for the very much lower cost NFIP flood policy. Going private flood is available but will be pricey. Ditto on windstorm/ wind peril policies.

That property management group isn’t responsible for your mom’s tax filing and insurance coverage. Please carefully reread the contract. I’d bet it’s all about collecting rent, getting their management fee and providing the bridging to deal with tenant issues and get any repairs done and there’s going to be clause that if something goes amiss its all on the owner which is your mom. And she’s totally exposed personally. I’d have it owned by a LLC if she flat won’t sell it and be done all as LLC as owner.

Her living you in another state should something go amiss - whether it’s hailstorm with roof replacement needed or house gets flagged by cops/code enforcement as moms old neighbors hate having renters in the ‘hood - will mean travel time to go back to the old homestead to deal with stuff. There is just no way around not having to be boots on ground for things. At 88, mom has beat the actuarial tables so living another decade could totally happen. You good for dealing with whatever another decade? You have the wallet and sense of humor to go a decade with this place? Should mom outlive her money, that property will totally keep her from ever being eligible for LTC Medicaid in your state where she lives with you now. Homes are exempt assets IF it’s the applicant homestead. It’s not her homestead anymore, no Medicaid as it’s an non exempt asset for a future Medicaid application.
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Wishiwashiking Feb 2019
So appreciate these thoughtful answers!
If she has to go on Medicaid in her current state of residency, that state does not transfer to yours. I have been through this with property owned in 3 different states. My advice is to sell it. You don't know what the future holds.

We closed on one house in Texas. 3 months later hurricane Harvey made landfall there. Rockport Texas. Thank God I pushed my sister like I did. Thank God my mother listened to me, and even if she had not, we had the documents to do any way.

Out of state is nightmare. We have disposed of two now.
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It depends in part on the capital gains. If you inherit the house, the cost basis will adjust to what the house is worth the day you inherit. If you sell it soon after, you'll likely have no capital gains taxes to pay.

If Mom bought that house a long time ago and it's worth much more, she could be paying some significant capital gains taxes on the proceeds. If she bought it with your dad and he passed away, her cost basis would have adjusted to what the house was worth when he died, so that may help a bit.

For example, my folks bought their house in 1969 for $45,000. It's currently worth $2 million (yeah, California). If they'd sold it before last November when my dad died, they'd have had to pay capital gains taxes on $1,955,000 capital gains. The day Dad died, Mom's cost basis went from $45,000 to $2,000,000. We can sell the house now without any horrible tax implications, which is good because she has now moved to a nursing facility. If she doesn't sell and lives another five years and the house is worth, say, $2,250,000, my brother and I will inherit it with a cost basis of $2,250,000. The only tax we'd pay is on what we made over that amount.

It's really something you should have a CPA advise you on, however, in order to get the 100% correct information.
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I would see an elder law attorney. Each state has it's own laws and what might be good in my state might be a financial fiasco in your state.

It is well worth the time to get a professional opinion based on the state laws for both states. Mom can pay for this without worry 8f she ever needs assistance.

If the house is paid for and you have a management company what would be the downside to keeping it for a rental property?
Just curious.
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Wishiwashiking Feb 2019
My brother is doing Mom’s finances and the current renter has been especially needy, everytime the agency passes a message on to him he wonders why he needs one more thing to worry about.
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