Q: I am purchasing a piece of property from an individual, he is the youngest of three children. His mother has dementia and is in an assisted living home, he has power of attorney. He has a warranty deed that states that he received the property from his mother for a sum of money. My closing agent has a copy of this deed and is asking for a bill of sale or bank account to show the transfer of money, in case one of the other children try to take the property. Is this necessary or does the warranty deed take care of this? (Pittsburgh, PA)
A: No, it is not required, however, I think your closing agent is exercising due diligence as I would in this situation. Two potential concerns. One, is that it was a transfer without consideration (no actual money paid). If that happened, and his mother needs to apply for Medicaid in the future, or is receiving Medicaid benefits right now, Medicaid would ask for the record of the transfer. If no consideration was paid, there could be a problem and the home could potentially be subject to a Medicaid lien The second concern is that the other children didn’t agree to or don’t even know about the transfer. I think it is best to be cautious.