My dad is 94 and many of you have seen his 'progression' here in this forum. Since covid started, he has had to move from assisted living to skilled nursing due to a downturn in his health. We have tried to get him to 2 different memory care facilities but was turned down by both because of his continuing medical needs. His dementia is worsening and he is unable to walk anymore -- he is confined to a wheelchair. He has not been in his house for over a year. It sits like it did since the day he went to the hospital a year ago in September, and was not able to return home. As guardian, I am responsible for keeping it maintained, although I haven't really done much except hire a yard service to maintain the yard. All his stuff is still there and there is no chance he will be able to move home. He is on self-pay at skilled nursing and has enough funds to last a while. I still pay all utilities on it plus property taxes and yard care. The house itself is paid for. I am very afraid of something happening to it. It is an old house. It sits back in the woods in a grove of very large fir trees. In talking to my guardianship attorney this week, she suggested looking into selling it. We are concerned about what the 'basis' might be, however, and if it is going to be too large a tax bill, we might hang on to it. My dad still asks to move home which can't happen. To sell his house would send him into a spiral and because of the guardianship, he will receive copies of all legal papers. This may be more than I can do emotionally and I'm just not sure what to do.
If your dad was the only owner, then the cost basis will be the selling price minus the price he paid for it. Depending on how long that has been, it could be a substantial tax bill.
If you inherit the house instead, the cost basis for taxes will be the value of it as of your dad's date of death. In other words, if he dies, and you sell the house soon after, the taxes will be only on the difference between the value on his date of death and the selling price -- very little tax.
Example: My folks bought their house for $45,500 in 1968 as JTWROS. My dad died in 2018, and the house was appraised at $1.7 million (I know -- crazy California real estate). If I sell the house now because my mother has been out of it for over a year, she'd pay taxes on the difference between the $1.7 million and the sales price -- likely now around $2 million. (See: crazy California real estate)
If my brother and I instead inherit that house tomorrow (for example), it'll appraise for $2 million and we'd pay taxes on the difference between that and what it sells for.
Hope that makes sense. Bottom line, you need an appraisal of the house as of your mom's date of death if she lived there, too, and your dad inherited her half as survivor. You might as well get that done if you haven't.
Do you have to show him the papers if you have Guardianship?
I dealt with sale of deceased , unmarried aunt's house. Much worry and tension until house sold. Up to that point my cousins and I responsible for any problems concerning house! Sad to see it go(family gathering place), but glad to be free of the worry!
After years of elder care adventures, Both my folks FINALLY went into assisted living in 2017 leaving me with 5 acres and a nasty rundown house full of stuff. I also had Conservatorship. No way was I going to mess around fixing the place up. It would have taken thousands of dollars and not really increased the value very much.
I was only surviving kid, 60 plus years old and 3 states away.
I cleaned out the personal belongings, paperwork, nasty stuff from the fridge, 40 trash bags from the house and garage to the dump, left the old ratty furniture and sold it as is. The land was valuable so it sold for a good price right away.
The money allowed me to keep them in a very nice place and later memory care for dad after mom died. Dad died just last month. Using the house funds I spent over $200K since 2017 for their care.
We get to a point where we can’t let the dementia over rule common sense decisions. I think you’re there.
A Place for Mom provided me NO CHARGE, name of 3 movers who do all the above mentioned donate, pack, store, move hubby's stuff into his room at assisted living. It wasn't any more expensive than if I had other movers just "move " to just one location. It was a big help to me. They took a few of my items to estate sale, as well. My husband was not in memory care at the time, still home, but they would have gone to facility if I needed them to. The company name was Smooth Transitions, "your single solution for senior moves".
Good luck. Make up your mind, get it done, then be free of worries of how you will do it. Let other's help.
I began going through all their stuff to decide what I should do. I had antique buyers come to buy some of the old antique furniture. I had native American friends of theirs come to take whatever other furniture they could use--for free. I moved some of their family heritage stuff--old photos, etc, to my house to eventually get to a relative. Then had the carpets cleaned, some damaged windows replaced and put it on the market. That took 2 1/2 years. Low value housing was in great demand and the second couple who saw it bought it. All the money went directly to the husband's bank account and helps pay for his costs. The day of their move, a friend took them out for breakfast in a nearby town, then to have their nails done. During this time, we were moving their furniture to their memory care apartment and arranged it just like they had it in their condo. Everything was familiar and when the reluctant-to-move husband saw his favorite recliner facing his same tv with the couch in the same place and the same pictures on the wall, he sat down with a sigh to relief and never said a word about living in a different place.
I never told him all I was doing to deal with their condo and I made sure any money I got went right to their bank account and never took a cent for myself. It was a lot easier this way and they had given me this authority, so I used it. I was retired and had the time and I loved giving this service to my friends.
Long time, no rest for the weary! What will you do with all your free time and space in your head when he passes on??? ;-)
I won't be able to post everything in one go, but there are many issues that were brought up by others and you. Before getting into details, definitely work with those who are qualified to discuss these issues, such as tax preparer, EC attorney, the court. In particular there is concern about what the insurance contact told you - that's covered in the "details" (the devil is in them!!!)
Yup, now that I am ready with responses, I'm going to break out my replies as replies to this post, as follows, so as to not exceed max and make it easier to keep all categories separated and easier to reference:
House maintenance
Selling house vs landlord
Deed/inheritance/cost basis
Insurance
Court/Taxes
Inheritance
As for MC:
"We have tried to get him to 2 different memory care facilities but was turned down by both because of his continuing medical needs. His dementia is worsening and he is unable to walk anymore -- he is confined to a wheelchair."
This is odd that they won't accept him, but perhaps it's because he wasn't moved to MC soon enough (not your fault!) If he had moved to MC before more medical issues, perhaps he could have stayed, but if many medical issues have popped up, they likely won't want to deal with it. The bottom line would be impacted!
I'm sure there are also those places who would request you move out of MC as well, if too many medical issues cropped up. I was concerned about this, given progression will lead to more and more care needed. Mom is finishing year 4, has been in a wheelchair now for maybe a year, possibly less. Recent discussion with them (she had a stroke earlier this month) is that she can stay to the end, no need to move to NH!!! YAY! The down side is her "rent" covers up to 1 hour of personal care. That will likely cost us, at some point. The sad part is that they charge a full hour if she exceeds the 1 hour, even though it might only be 10 min! I wish they could do it in 1/4 hour increments. It will likely still be less expensive than a NH.
"I am responsible for keeping it maintained, although I haven't really done much except hire a yard service to maintain the yard."
and
"I went over this weekend and turned the heat back on to 60 deg. I had left it off all summer. His house is old and I don't think it has much insulation because the furnace seems to run all the time. But I guess that's better than frozen pipes."
Someone else mentioned it, but I will say it too - get it winterized. It will cost a bit, but the savings (and worries reduced) should offset that! This place I bought had been winterized as it was unoccupied. If your location gets colder in winter, the heat savings will be great! It also eliminates worries about freezing pipes.
If you don't want to winterize, get maintenance on the heating system. It could be running inefficiently if it hasn't been cleaned in a while.
When considering cleaning the heating system, also have the vent/chimney checked/cleaned. If there is no cap on it, have that put on too - it will keep "critters" out. When I replaced the woodstove they had here with a pellet stove, I asked about the clean out (area that collects all the ash that isn't expelled - should be cleaned yearly!) When we opened it, not only was it not clean, it had a dead squirrel in it!
Minimal upkeep and "fixing" might increase sale value. If the exterior of the house needs to be painted (probably too late in the season for that), plan for that next year, if it isn't sold soon. Patching/painting inside can "spruce" it up a bit - clear out the stuff first, so you can fully assess what repairs might need to be done. Appraisal might identify other needs, such as electrical upgrades might be needed, new heating system, insulation, etc. IF appraiser thinks it might be more of a tear down and rebuild, obviously you won't want to do any of these. These issues can be deducted from the value if you have a buyer who wants to fix it up.
If you are *really* concerned about the trees, you can get an estimate to have them removed. If the potential is tear down, skip that!
If you have siblings, I would ask someone to take the lead on cleaning out the house. (This will need to be done eventually anyway). If you choose the fussiest/most headstrong sibling for this difficult task, there will be less fussing later (complaining that you had not completed this process and thus deprived them of quick receipt of their portion).
Home prices and interest rates are favorable now.
I figured that a house generates expenses while securities in the trust fund generate income, so it was an easy decision.
The house is wasting away and likely to depreciate in value the longer it sits. The proceeds from the house could be used to pay for his facility care and possibly mitigate capital gains.
With certain taxes varying state to state, you need advice from those who know the answers.
You might ask a tax pro about selling in in 2021 so that any capital gains tax would be offset by paying facility care out of the house money in 2021. Capital gains from a property held more than a year are taxed at a lower rate (so he's already had the house longer than that). If you're thinking about selling the house for less than fair value, that could come back to bite you if he finally runs out of money and needs a Medicaid bed - so an elder atty could explain that part to you.
So my suggestion is talk to elder atty - he may have all the answers about asking price versus market value. He may also have the answer about capital gains being mitigated by paying facility care out of the house money. If not, then see the tax pro. This should give you enough info to decide what to do.
The feds might levy an estate tax (paid from the proceeds, not those inheriting) and the state might also come with hand out for their share.
Definitely use a separate account for the proceeds of the sale. They are still his, even though Babs75 is guardian. A good investment plan might help too. Mom's total assets, including those from the condo sale, have remained almost static, despite taking quite a lot out every month, more when the condo needed coverage, but still a lot (covers about 1/2 MC and various supplies, necessities not provided.) The 2 year graph, except for a dip early in the virus days, is almost flat! Best plan ever!!!
Granted this was an issue on the buyer's side, but it might be worth asking about whether this can be done. I would think the court would approve the sale, to give her funds to cover her care and keep her off Medicaid!
My 96 yr old Dad has dementia and he always saud he wanted to stay in his home which he had done. One year ago his dementia had gotten so bad that he can no longer get up without help to get to and from his wheelchair.
I hired Caregivers 24 7 and of course that isn't cheap.
Im now considering hiring a Live In because that would be about 1/3 to 1/4 the cost of using several Caregivers doing shifts.
I know my Dad is happy in his own home with failure surroundings.
I have installed Nest Cameras so I can keep an eye on my Dad any time 24 7. I can sleep better at night knowing I can check on him at anytime and see how he is doing and how he is being treated.
Unless you actuall need the money for his Care and need to sell the house then you shouldn't sell it.
you could always bring it up in a conversation about his thoughts on the subject.
Sonetime the only thing Seniors have going for them and keeping them alive is their memories and or thoughts that one day they'll be returning to their home.
Please remind them for me that it doesn't become an inheritance until the testator is dead.
"Inheritance" is an unseemly word to utter before probate.
You risk having the home occupied by squatters or wild animals.
Or at least in this time go through the house and remove and distribute to family what is to be kept. Sell what there is of value, donate what is of no value to you and toss the stuff no one wants or you can not donate.
Your other option is to have a family member buy the house and they can sell the house they currently have and move into "dad's house".
You could ask about the house being placed in a Trust so the Trust would own the house and it can remain in the family.
On the house, if the gains are too heavy to warrant a sell, Im going to approach this from a different angle.... forget about the “house”, it’s all about the land. If it’s more than likely to be a tear down, then get it ready for that eventuality, so no real repairs, no big maintenance, no bringing anything up to newsy codes. Nothing done to make it more traditionally market ready. Just the minimal upkeep.
If he has funds for next 2 years to pay for all things house and his MC, the house will outlive him. Inheriting it is always the better financial option. Plus you’d have to deal with new legal to his guardianship & it sounds sticky & exhausting, I’d avoid selling it if it was at all feasible.
You’ll need a Vacant Dwelling Policy & as others have said they are not exactly inexpensive even tho it’s basically just a fire policy. You may need to get a few quotes to find one that’s reasonable.
I agree with the others on getting it winterized, so it can be shut down with minimal utility & plumbing worries. If it has a fireplace, I’d suggest that you get a chimney pro to secure it so no surprise woodland creatures as tenants. They can do amazing amount of damage.
The stuff in the house, it’s not your childhood is it? It’s your dads late wife’s home & collections, right? I’d do a registered letter to her daughter about her taking all that she wants from the place. Yes even tho she said she wanted nothing. It’s a CYA Justin Case.
Is her daughter at all a heir? Or if it was sold now, is she expecting some of the $ as it was her mother’s fully paid for home at the time of remarriage? Is this a factor in you dads not wanting it sold?
The house was not my childhoood house. It belonged to his wife and it was their daughter's childhood house. Her name is not on the deed nor is she an heir to his estate. I suspect we may have an issue with her. I have never trusted her and I tolerate her at best. My dad is clinging on to old memories.