Tag Archives: REAL ESTATE

Can I sell my mother’s home?

Q: My mother is currently in assisted living and is broke. I am selling her house and would like to know the best way to handle the proceeds. I was advised to put the money in a single premium immediate annuity naming the estate as beneficiary and myself as second beneficiary. I thought annuities carried high fees. Will I be able to pay her monthly bills which will continue to increase from this type of account? And at some point, sooner rather than later I will need to apply for Medicaid so need to know best way to handle the proceeds in that regards. (Clairton, PA)

A: As you may know, there is a 5 year look back period when one applies for Medicaid funding. All transfers of the applicant’s assets for less than fair market value, can result in the applicant being ineligible for Medicaid funding to the extent of the value of the assets. If mother will be receiving Medicaid funding in the next five years, Medicaid will have an interest in these proceeds. There are more details that need to be known before you sell this home, and you should seek the advice of an experienced attorney who is versed in Medicaid regulations. Generally, you should only sell this home for not less than market value and have at least on appraisal if there is any doubt of the value. You should document everything pertaining to the sale. Once you obtain the proceeds, you should and use them only for your mother’s benefit, whether that is investing them for her or using them to pay for her care. An attorney can also advise what if any exemptions or exclusions from Medicaid may be available.

What are my options and next steps?

Q: I am writing on behalf of my mother. She purchased a house in Georgia with her daughter approximately 8 years ago. Due to her daughter neglecting her health and well- being she came to live with me about 2-3 years ago in Pittsburgh. My mother has a trust that includes her share of the house and I am the trustee. Her daughter was able to refinance the house without my mother’s signature. The mortgage company has sent a notice to the trust, my mother and her daughter for the money. The notice from the attorneys for the mortgage company say the money was distributed in error. My mother nor the trust received any money, but I believe her daughter did and may have purchased a new home with the money. Your guidance on this matter would be greatly appreciated. (Baden, PA)

A: This is somewhat complicated and you need a lawyer in GA. My thought is that if this is a fraudulent transfer, the bank cannot legally foreclose on the house. However, my experience with banks lead me to believe that they will try. Do not do this on your own and try to negotiate with the bank. An attorney needs to review the trust instrument as well as the deed which should be titled in the name of the trust. In addition, your attorney will need to look at all the documents indicating how your mother’s daughter got a loan on a house titled (hopefully and presumably) in the name of a trust. Do not wait to act on this.

I received 1099-S from the sale of mom’s home. Is this a requiring 1041 filing?

Q: The county valued the house at $131,100 and it sold for $129,900. Doesn’t this count as a loss and therefore not income? (West Mifflin, PA)

A: Form 1099-S is used to report gross proceeds from the sale and exchange of real estate and certain royalty payments. A 1099-S form must be provided to the recipient and a copy mailed or emailed to the IRS. Just as you would list it and attach it to a personal return, you use it on the 1041 Schedule D (decedent’s fiduciary return). You will list the stepped-up value of the house based on what the fair market value was at death. So, if you sell it within in a year of your mother’s death, it is doubtful there will much of a capital gain or loss. There are other factors needed to be known here before I could conclude that the estate will not face a capital gain. It is also relevant as to whether you received the house as a beneficiary, or sold it from the estate as executor. I would suggest that you consult with an estate attorney.

Can I get out of a Standard Agreement for the Sale of Real Estate that I signed?

Q: I signed a Standard Agreement for the Sale of Real Estate and closing is scheduled for 7/26. I suffer from major depression and I was also withdrawing from a prescription from my doctor. I do not believe I was of sound mind and capable of making the decision at the time. Can I void the sale and cancel the closing? What are the potential consequences if I do this? (Pittsburgh, PA)

A: Your stated reason for rescinding the sales agreement will likely not be valid and I therefore would not disclose this to anyone. The answer lies within the language of the sales agreement. The damages against you may be limited to the security deposit. If so, the seller therefore cannot seek consequential damages. Read the paragraph which addresses damages. I am not sure which version of the sales agreement you have but it may be paragraph 22. If your damages are not limited by the wording of the agreement, I would pay an attorney to examine language of the agreement pertaining to inspections and other conditions precedent to acceptance of the property. If you have not already had an inspection performed, a building inspector may be very helpful to you. Follow the advice of your attorney.

When is it necessary to file an estate when father passes away? Three children are only heirs.

Q: Father passed away 2/22/17 (predeceased by our mother who died in 2002). The only assets would be a 2012 Jeep Patriot with $5,000 still owed, and a home with an $18,000 mortgage balance in a depressed area. There was a $7,000 life insurance policy which went entirely to pay for funeral, with three children also paying about $1,000 each towards funeral. Basically, we already know there are more debts than assets, and are hoping to avoid having to pay estate fees, etc., but we are not sure if an attorney is necessary or what we are required to do. (McKeesport, PA)

A: You would need to open an estate if you want to transact his property-sell his house and transfer any other asset in his name. The question you are facing is, is it worth the time and expense to do this, given the fact that it looks at this point to be an insolvent estate? I would need to know more of the details to properly advise you. However, I have advised clients over the years to walk away from situations like this. The home will just go to Sheriff’s sale. There is a chance that the taxing bodies-school and borough especially, could sue for a deficiency judgment in the tax sale. Although it is rare, I have seen that happen. I would gather all your information-statements, bills, the deed, the mortgage documents and consult with a local attorney.

What happens when one heir is bequeathed the title of a house and another heir an equity stake?

Q: My grandmother recently passed away. My grandfather passed away a few years ago and my mother, also the executor of her will, is her only child and has always lived with my grandmother in her house. In her final will my grandmother left my mother the title to the house with a 40% equity stake bequeathed to me. If my mother has zero intention of selling the house (which is paid in full), does she have to “buy me out” of the 40%? How exactly does this play out? I know that my mother inherited more than enough to cover my portion from my grandmother’s retirement accounts but she is so absolutely outraged that she wasn’t left the house 100% that she won’t include me or inform me of anything that’s going on with the estate/probate process. The estate lawyer never returns my phone calls either. I can only seem to find information when inherited houses are split equally among heirs. (Pittsburgh, PA)

A:  As mentioned, you need your own lawyer to look at the deed and the will. If the estate lawyer will not give you a copy, you can get a copy of the deed in Department of Real Estate in the County Office Building and a copy of the will, assuming it has been filed, in the Register of Wills which is in the City-County Building. Both are in downtown Pittsburgh. Based on what your limited information, it sounds like there will be a deed coming from the estate to your mom and you, 60% to her, 40% to you. I will assume the new deed will list both of you as tenants in common. Yes, unless the will directs otherwise, for example, a life estate to your mother, then you have a divisible interest in the house and can therefore try to force her to buy you out. If she will not agree to a buy out, you can file a partition action which is expensive and time consuming and should be a last resort. I think you need a lawyer as there may be other options. For example, she can grant a deed to you reserving for herself a life estate. This would allow her to live in the house until she is no longer able to or dies, then full title would pass to you. More information is needed to fully advise, but you should seek a legal opinion.

Can I sell parents house with a POA if my sister is on the deed?

Q: Seeking POA & Health directive for elderly parents to sell home for medical care. However, the equity in the house is shared by my sister. It is a Trust deed shared by Parents and sibling -all 3 live together. Both parents are elderly and one is caregiver of the other who is seriously disabled. Both need medical attention so I want to intervene to force medical care. I want POA to sell house to counter expenses- medical and future assisted living cost. However, co-owner sibling of house does not want to sell house and wants house in retirement. Legally, once I get POA then I have control of parents finance and will sell home for the equity to pay for parent’s assisted living expenses and medical care. No money remains for-co-owner sibling, but she can utilize her portion of equity to pay for elderly parent’s medical expenses too.

A:  Having the sister on the deed with the parents may be a problem for you as an agent on a power of attorney trying to sell this house. You need to have an estate planning or elder law lawyer look at the deed. If your sibling holds title as joint tenant or as a tenant in common, you just cannot remove her from the deed. What is happening here is why people should seek competent legal advice before putting a child on the deed to their home. You may also have some potential Medicaid issues if you believe either parent may need to apply for nursing care assistance in the future. You may be able to shelter the house and other assets and have the parents remain eligible for Medicaid, if you follow the advice of a good elder law lawyer. The fact that one spouse may remain in the home when the other is hospitalized and there is a child living in the home, may benefit your parents with Medicaid eligibility. This is a complicated situation and you need to consult with a lawyer.

 

Limited Power of Attorney question

Q: There are seven owners (including myself) of a property. I wish to get a Limited Power of Attorney (POA) from the other six that will give me the ability to list and sell the property. Do I have to customize the POA for the state where each owner lives or can I simply use the POA for the state where the property is located? Also, one owner lives in France, will that POA must be different? (Seven Fields, PA)

A: If you are using a Power of Attorney in the jurisdiction of Pennsylvania, it must comply with Pennsylvania law. A limited power of attorney for specific purposes, such as one for selling real estate or representing another person at a real estate closing, is not a General Durable Power of Attorney and therefore does not need to comply explicitly section 5602 of the Probate, Estates and Fiduciary Code. You would be better having an attorney draft a limited power of attorney. If you want to handle it on your own, the only basic advice I can give you is to make sure none of the parties to the document are minors or incompetent and that the scope of your powers (what you are doing for them) are clear.

How do I transfer parent’s property to me?

Q: My Dad passed away recently. My Mom is living but has dementia. They both have wills that state the property goes to the surviving spouse or if incompetent (Mom is) to me, the only child. I want to make sure the family property can never be taken away by medical situations, etc. (Swissvale, PA)

A: This is something that must be done under advice of a lawyer. First, mother needs to be competent to sign a deed. Moreover, there are many questions that must be asked to determine if this is an advisable transfer. The foremost question would be whether there is a possibility of her needing to apply for Medicaid in the five years following the transfer. If so, and you have not lived in this home for the preceding two years as a caretaker, this transfer could render her ineligible for Medicaid to the extent of the value of the transfer. Secondly, if you do not reside in this home, your mother will pay more in real estate taxes in that she will lose her homestead exemption and any senior citizen’s discounts available.

ELDER LAW, REAL ESTATE, TRANSFER, DEED, COMPETENCY, MEDICAID

My grandmother’s house was sold without her legal permission. What do we do?

Q: A family member moved in with my grandmother sold her house. My grandmother’s name was forged on the documents. We need to get it back.

A: I do believe your recourse is by hiring an attorney file a petition to rescind fraudulent transfer or a quiet title action. If you are correct this transfer was done through fraud. If grandmother is competent and can testify that the signature on the deed is not hers and she did not sign, the case is easier. If she is incompetent to testify, it will be a little more involved. You may need her doctor to testify of her mental competence at the time the deed was supposedly signed and perhaps even a handwriting expert. I would see an attorney as soon as possible so something can be filed before the house is transferred again.