Tag Archives: Estate Planning

If I am in Bankruptcy, can my aunt put my name on the deed to her house?

Q: In Chapter 13 can I be put on another house’s deed? I declared Chapter 13 about 3 years ago and have been making payments. My aunt wants to put me on her deed. What are the ramifications of that, and the risks to her? She will be entering a nursing home and doesn’t wish to sell the home.

A: Two issues. Is this wise to do for estate planning purposes for your aunt and is this wise for you to do while you are in bankruptcy? From an estate planning point of view, if she titles the house jointly with you, only half of the value of the house will be subject to inheritance tax when she dies. Since the applicable inheritance tax rate for a nephew is 15%, this could save some money. The negative side of such transfer is that if in within five years following the transfer, your aunt needs to apply for Medicaid, such a transfer could make her ineligible for Medicaid funding. The house would have to be included in her assets subject to the Medicaid claim and you may be forced to sell this house unless you could pay the fair market value to Medicaid. This is of course unless some Medicaid exclusion applies for example if you lived in the home as her caretaker for a period of two years prior to the application date. If your aunt really foresees Medicaid funding in her future, you should have her consult with an attorney versed in Medicaid law in order determine if she can shelter some of her estate now perhaps through a Medicaid trust. As far as your bankruptcy, I would check with your bankruptcy attorney as the acquisition of an interest in real estate while under a bankruptcy plan, may,  violate your agreement with the trustee assigned to your bankruptcy case.

When elderly mom enters nursing home, can I keep her house?

Q. When my elderly mother enters a nursing home, can I keep her house? I am her 24/7 caregiver and have no home otherwise. I have both medical and durable POA and I am responsible for 100% of the household expenses, upkeep and taxes. The deed is in her name. I don’t know what other details are required here. I have lived here and been her caregiver for 12 years.

A. Make sure your mother has a will in place that leaves the house to you. If there are no other children and she has no surviving spouse, you can inherit the house even without a will. However, it is best for her to have a will. If she eventually runs out of cash or liquid assets to afford the nursing home, you may have to apply for Medicaid/PA Department of Public Welfare (DPW) for her. They may have an interest in the home but as a surviving child/caretaker living in the home, they will not force you out of it. When she dies, DPW can go after the deceased person’s property under the Medicaid Recovery Program. However, given the fact that you were her caretaker for over two years prior to DPW eligibility, you can file for relief as an “undue hardship” under the DPW rules and probably keep the house. See a lawyer for a more thorough examination of your mother’s situation in light of Medicaid rules and regulations.

Can I become my aunt’s power of attorney?

Q. Is it possible that i can become my aunt power of attorney? Her mental state of mind is going downhill and she has no children. The friend that she was staying with just recently died. He was the one that took care of her. Helped her pay her bills and keep up with her hygiene. Right now she is staying with me but i don’t feel as though I am capable of taking care of her myself.

A. Yes, I assume you can become the agent on a Power of Attorney for your aunt, unless there is some reason you cannot. A General Durable Power of Attorney (GDPOA) is probably recommended but you really need to sit down with an attorney and discuss all of the facts. She needs to be mentally competent to sign a GPOA. Don’t wait longer to do so, as her condition may deteriorate and render her incompetent to sign. You may also need to contact the Department of Aging to see what help you can get. An attorney can also advise you about applying for Medicaid if she has insufficient money to pay for her care.

Should my mother put my sister and I on the deed to her home?

Q: My mother thinks that her name should be taken off the deed to her home and my sister and I should be put on the deed to avoid complications when my mother ultimately goes into a nursing home or dies. First, we heard this is an expensive process. Is that true? Secondly, is it advisable?

A: To answer your first question about expense, this is not an expensive process in your case. Assuming your mother is the only name on the deed or she is on the deed with your deceased father, this transaction should be exempt from PA real estate transfer tax as it is a “family transfer”. If it were not exempt, such as the case with most real estate sales, or transfers to non-family members, the transfer tax is at least 2% of the sales price or market value of the realty. For a $100,000.00 home, this could be a $2,000.00 transfer tax. In your case, the only costs to you would be the attorney fee to draft the deed (usually $100.00 to $300.00) and the filing fee paid to the Department of Real Estate, which is $150.00 in Allegheny County. Whether this transfer is advisable in your situation, is a much bigger question. There are advantages and disadvantages to both parties of the transfer, you and your sister, as well as your mother. You should consult with an attorney before changing names on a deed to make sure you are well aware of all the issues including real estate tax discounts, inheritance tax, capital gains and PA Medicaid eligibility and liens. In summary, this transfer could exclude her from Medicaid eligibility if she needs to apply in the next five years, by transferring to you she may lose her senior citizen and Homestead Act real estate tax exclusions and discounts. You and your sister may face a capital gains tax when you sell this house. Such transfer will avoid inheritance tax if mom lives one year past the date of transfer, however, is it really worth it to avoid a tax rate of only 4.5%? Should mom transfer to mom and you two siblings as joint tenants instead? Those are just a few things you will need to discuss with an attorney before doing this.

POA for Aging Mother

Q.           A year ago my mom fell and broke her femur, I also think there is more health issues. She cannot live alone anymore. I’ve been with her seven months it was to be one month only, she doesn’t want a nurse and she doesn’t want to sell her home. I have my own family to go home to, I need help please. I don’t know what to do anymore she is being very selfish and uncaring of me and my family. she wants what she wants. Can you please help me.

A.            I would consult with a local elder law attorney. You have no obligation to take on such a role, especially if it is detrimental to your health. Dealing with aging parents can be frustrating, time consuming and can cause stress. You can call the Department of Aging for assistance, but that may not be the best answer. If she is competent, you could get a Power of Attorney from her and make decisions that are in her best interest. For example, you could hire in home care at first to see how that works before moving her into an assisted living situation.