I have poa and the 3 of us have a Trust.
House has not been lived in for 1 1/2 yrs. House is still full of her stuff. I've gone through house and gotten what I have wanted, bothers have not. Just want the worry of having and paying bills on it gone. Any thoughs on what to do?
Because a POA can not act on behalf of a trust, it must be a trustee or trustees, depending on how it is written.
You can, however, as the POA clear the house out. That's what I would do.
Notify your brothers that you will be having the home completely emptied by a set date, usually 30 days, and that they have until that time to get what they want. Of course they will have a fit, oh well, dealing with mom's personal stuff does fall under your POA.
I think the gist of the issue are a few facts:
1. How is title for the property vested? I.e., what is the EXACT wording of ownership on the Warranty Deed?
2. Are you proxy pursuant to a DPOA or springing POA, with your mother's mental condition being the springing factor? Are you sole proxy?
What to do, or more specifically, what can be done, depends on these issues.
If you sell when she's still alive, she'll have to pay capital gains taxes on the difference between the selling price and the value when Dad died. If you wait to inherit the house you and your brothers will get a new stepped-up basis to the value as of her date of death and will likely pay very little, if any, capital gains taxes if you sell soon after
On the other hand, if Mom's been in that house for 50 years and Dad wasn't part of the ownership picture, she'll own a truckload of taxes if you sell now.
It wouldn't be a bad idea to buy an hour's worth of time from a trust and estate attorney to figure out what you can and can't do, and what the financial implications would be of certain moves regarding the house. If Mom is at all competent, having her resign from the trust and turning it over to the successor Trustee would be the smart thing to do. The assets would still be used for her benefit only until she died, but it'd make everything a lot easier to deal with. If she has Alzheimer's or dementia, that's off the table, though.
Why are they dragging their feet? Do they express any desire for items still in the house? Do they just ignore the requests to move forward?
I know the feeling, although mom's place was about 1.5 hr each way for me, 2 day drive for OB and hopeless to get YB to even respond to anything!
I would start with the brothers. Find out IF they want anything from the house. If not, then proceed without them. If they do, then they need to specify what and YOU specify when it needs to be done. I'd limit that to a month or 2 at most.
It sucks if they aren't going to help you clear it out and get it ready for sale. Mom's condo took about 2.75 YEARS of my life. Multiple trips/week, time to schedule and coordinate repairs, etc. If you have control of finances and she has enough to cover your time/labor, expenses and any costs to get the place emptied and ready for sale, pay yourself for your time and costs, AND use her funds to pay for everything else needed. Keep receipts for repairs, materials and payments to yourself - these can be used as deductions to offset the cap gains.
There's nothing worse than a house sitting idle. Vermin. Disrepair. Taxes.
NOTE: insurance needs to be changed to one for a vacant/unoccupied home.
Vacant = empty of personal property, no one living there.
Unoccupied = personal property still there, but no one living there.
Most insurance companies will NOT cover (read = pay for damages, etc.) if the place is unoccupied for a given time period, usually a few months. 1 1/2 years is treading on thin ice. You'll have to shop around as not all companies will cover vacant or unoccupied homes and some can be very expensive!
Since mom is in MC, assumption is she may, at some point, need the proceeds from the sale of the home. In the meantime, money is going down the drain through utils, taxes, insurance, maintenance and potential repairs. If they can't get off their duffs to take care of it or don't respond, then move forward without them. Worst case, pitch everything and work on getting it ready for sale. If you don't want to do that, options are put useful items out with a free sign, yard/estate sale or storage. If you are still working, this may mean taking vacation time and spend the week or two getting it all done. If you are retired, you could possibly go stay until it's all ready for sale.
Since you have POA (presumably it is active), then you don't need their approval. It would be nice if they could respond AND help, but I wouldn't hold my breath. Give them one last chance, with a deadline that isn't far into the future. When that deadline comes, move forward, otherwise this could sit for years! Now is likely a good time to sell, but if it takes a few months, you'd be into winter, bad time for sales.
While plotting course, it might be good to touch base with some realtors as well, to get a feel for the market, etc. They may recommend some "upgrades", but if everything is in working order and still looks nice, push back on that! Ours wanted me to replace the bath sink with granite. It's not a huge bath, and the top WAS just replaced. Nope. He also wanted me to replace some hanging light fixtures. Nope. If I did, it would just be the cheapest thing I could find - better to let new owners choose their own! I did have to get the heating/AC system replaced, as it died several months after she moved. The glass (and there was a LOT of it!) kept blowing seals, which builds up moisture and fogs the glass, so those had to be replaced too! Stick to clear, clean, touch up with paint if needed, repair obvious issues and leave the rest.
Covering trust next:
So, your best bet is to just take this bull by the horns and get it done. Waiting for them is only going to drag this out. PAY yourself for costs getting there, time working, etc. I was foolish and didn't do that. There is still a bit left (most of the trust has been distributed), but still 2021 taxes to do - I'm hoping to get them to agree that I can take a nice chunk for myself, for the 6, soon to be 7, years I've given up to do all this! It won't be ask much as I was going to request, based on recommended hourly wage and time served, but if I can take some of it, it'll help. I won't hold my breath, but I WILL try. So, pay yourself NOW for whatever you do. Don't count on getting anything after the fact!
Hopefully mom's home isn't in a Life Estate trust. Mom's condo was, so we needed EC atty to handle the sale, costing a lot more! Also, the way this works is you 3 will end up getting the bulk of the proceeds. I was able to get bros to put their share back into the main trust along with my share. I paid out enough to cover the cap gains we had to pay. If it's not set up this way, then a regular attorney may be all that's needed. For whatever reason, our atty told me I could sign all other documents relating to the sale as DPOA, but NOT the deed. Again, that was a Life Estate. It may be different for you or different state rules. The attorney can guide you.
If you don't have a tax person, I'd recommend using an Enrolled Agent. They have to take special tests to be IRS approved and maintain their standing to be an EA. I am VERY happy with the one I located here and he was VERY competent with everything! He really didn't charge any more than the "blockheads" (stay away from them!) S/he may be able to give you guidance about the "step up" if the home was owned by mom and dad and he has passed. You'd have to get actual financial advice from someone more competent than me, but a high level explanation:
Normally:
Cap gain = Net Sale - original cost
Example: Sell at $300k, purchase at $150k, so gain = $150k
NOTE: there is an exclusion, so gain would be reduced by $125
Deductions can reduce that gain even further. Cap gain rates do vary.
NOTE 2: the final net *could* increase mom's Medicare cost for a year. It would likely happen 2 years after the fact, so be prepared! Currently if income, which would include the net sale, is over $88k, they jack up Medicare. How do I know? They did it to mom, even though her share of the sale was SO small!
With Step up:
Cap gain = Net Sale - (value when spouse passed)
Example: Sell at $300k, purchase at $150k, value when spouse passed = $250k, so gain = $50k
NOTE: there is an exclusion, so gain would be reduced by $125
In this case, deductions won't be useful (only if the gain is over the $125 exclusion)
NOTE 2: It's vague now, sale was 3 years ago, but I vaguely recall the Step Up only being half the amount, or perhaps it was the original price was only half. THIS is where a qualified tax person will be worth the cost!
It's only an example to demonstrate how important it is to have a good tax person for this sale! State laws may apply as well as Federal tax laws, so do invest wisely in a good tax person!
Last notes: DON'T wait for these two foot draggers. Take charge, set dates and get this done. If you need to go stay there, the house will be occupied, but don't delay - start getting ins quotes for the time between when you leave and when it sells.
If you're the POA and administrator of the trust then you can make the sale of the house.
Insist on a meeting with your brothers. It could be that they're dragging their feet about the sale because they don't want the hassle of having to have the place cleaned out and posted and everything else that comes with selling real estate. Let your brothers know that you're giving them a certain amount of time to go to mom's house and take what they want. Let the rest of the family know they can too, if no one minds and you're not planning on having an estate sale.
Then contact a local realtor. They will arrange for a clean-up and anything else needed to stage the house for sale. It will cost, but they'll do it.
AS POA, CONSULT AN ATTORNEY TO SATE GUARD MOM'S INTERESTS AND HELP YOU THROUGH THIS HEADACHE. Brothers can't argue with what the attorney says is the right thing to do.
You can give your brothers a deadline and make it ASAP to get what they want. By the way large or expensive items are part of the trust and actually may need to be "bought" by them and the money placed into the trust account.
My dad's house was in a trust and my sister and I the POAs. We found a good realtor, interviewed estate sale businesses and selected one. Got a date for the sale. Then got the house cleaned afterwards by a professional and put it on the market. A house that is not lived in begins to show it and will begin deteriorating so you may have repairs inside and out to contend with as well. It's an arduous process but with planning you can get it sold. The sooner the better.
That's an understatement. This applies to most of this thread. Way too much to address.
I live an hour from them, my sister, 15 min. I have been their sole caretaker for years now. My sister is not any help. Even when my dad asked her to spend more time with them, she doesn't have the time. She set her boundaries early on and has stuck to them. But, she will be the first one there to take whatever she can, unlike your brothers. The whole rest of everything will fall on my shoulders. As it has all these years. I'm at a breaking point and I'm full of anxiety and have a panic attack every time I need to go to them. I don't know what to expect each time I go. They, my mom mostly, because of vascular dementia, has been extremely stubborn about getting any outside help. So, my life has been their life for at least the past 5 years. All the talk on your post about the legality of the situation has me even more anxious now. I want them to use their money for themselves, they want to hold on to it so that we have something to inherit.
Their condo needs to be completely done over. They would not invest in new flooring, upgrades or furniture for themselves for the whole time they've been there. I'm so all over the place with this answer that I should have made a separate post myself. My advice is to get going with the sale. I'm sure after reading other answers that they are holding out so that it will be an inheritance instead of becoming fluid cash to help you with your moms needs!!! I totally believe that your parents worked hard for what they have and it should go to your moms care so she can live her best self until she is with the Lord above and your father!!! My heart goes out to you when it comes to siblings that wont help during this extremely hard time for you and your mom!! Prayers and hugs going out to you now!!!!
Medicaid would care about the house, but in general they aren't in the recovery business, they will just put a lien on it and send collections for it later when it sells OR stop payments until the net from the sale is used up.
Let both brothers know that you are in the process of disposing of everything in the house and tell them they need to come take whatever they want by the middle of August and whatever is left at that time will be process. Sold or donated to a good cause and the house will be listed and put up for Sale at that time.
Start with having a Realtor come over and start the process.
I have been thru this 3 times now, so I will try to give you some suggestions.
Allot depends on the state you live in. You are the POA. Find an attorney and an accountant that deal with Trusts and the ramifications of selling a house and listen to their advice. I went with a list of specific questions, with space to write down the answers. And I PAID FOR IT OUT OF THE TRUST. You are working for your family, and should not pay for this out of your pocket, if the finances are there. If your parents went to an accountant or an attorney on their own, they would not expect you to pay for it.
I suggest you sell the house. From the time my mother fell and was diagnosed with Dementia, I knew she would never be able to live in her house again.
There was no reason to continue to pay for the utilities, yard maintenance, taxes, etc. The house was sucking money from her dwindling account every month. Not to mention that she had no sprinkler system and I was driving over 100 miles, one way, to check on the house and spend the day (or 2) watering the huge yard, every week.
Oh yes, we had a homeless person sleep in her storage shed. You do not want a house sitting vacant, people will squat there, destroy things, steal things and it is very difficult to get them out. This is especially true with the COVID situation.
It took several months to go thru the house. Go thru every drawer, every piece of mail, every piece of clothing. Of the three family members I was POA for, I found thousands of dollars in cash hidden everywhere. Including behind photos in frames. (I am so glad I took the photos out of the frames that were going to goodwill) cash taped under the drawer bottoms, $3,000 hidden in a jar in a decorative stove and a bag of old silver coins hidden in an old coffee pot under a cabinet. We also found jewelry pinned to the hems of curtains, inside of clothing and in old purses stuffed in the back of a closet.
I located the certified deed to the house, in a box, under a bed, inside an envelope of a 20 year old bank statement. I found my mothers birth records and my father's death certificate in the same box.
As the POA you are responsible for all the assets and to be honest, it is kind of fun searching. It became like a treasure hunt.
I asked both my sisters if there was anything they wanted from the house. I shipped a few smaller items to one sister who lives out of state and I explained to the other that anything she wanted from the house had to be out by a specific date.
You will need to find a real estate agent that you trust. This is very important. I was fortunate that I had a family member that was one. We went thru the house and wrote down all the obvious things that should be done to get the est value fro the house. We got several bids. Be prepared, there will be things that come up you had no idea about.
Making the repairs and improvements on the house was well worth it and increased he value of the house considerably.
I hope this helps you.
God Bless
When you go through the house to ready it for sale, please review the previous posts about how to search. Every book - particularly hardcovers, every photo backing, vacuum cleaner bags (yeah.... you wouldn't believe that one!) the linings of coasts, both hems of curtains and drapes, paint cans (yep.... take off the lids and see if there is a false bottom), medicine boxes, everything in the linen closet.... you get the idea. That's why it takes months not days to clear out the house.
If you are PoA just tell your brothers that the house needs to be sold before insurance stops covering it. Invite them to go and take whatever items they like and then clear the house and get a good real estate agent. If it's an older house that has not been maintained you might want to get a home appraiser to point the things that have to done to get it marketable.
Best of luck with your plan of action.
Perhaps consult a trust lawyer to have info at your finger tips before speaking to siblings