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06-28-2016, 04:54 PM
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Location: Cayucos, CA
215 posts, read 918,229 times
Reputation: 124
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I am the POA for health & finance. Mom with dementia is in memory care. Her home is paid off and there are 5 children as beneficiaries. My mother is financially sound with income and stock.
Questions: Who is responsible for repairs to mom's home? Does the estate pay for it or is it the responsibilities of the children? Two of my siblings want to spend $50,000 of the estate money for repairs to bring the house up to par to rent it out.
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06-28-2016, 05:10 PM
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5,402 posts, read 5,048,089 times
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House maintenance would be from Mother's finances. You as POA could make that decision, whether to repair or not, rent or not, sell it or not...only you.
If it was my kettle of fish, I just sell the house right now as is. Get an appraisal. Offer it at appraisal to all siblings, if none wants to purchase it....list it with a realtor. If more than one sibling wants to buy it for appraised value, you will need auction it off between them.
Put all money from house sale into Mother's bank account. You could as POA buy stock with it or leave it sit, your choice.
I would not get into the potential disaster from let's rent out Mom's house. Mom is not going back to her house,so no reason to save it for her.
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06-28-2016, 05:15 PM
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Location: Wisconsin
19,126 posts, read 20,359,917 times
Reputation: 49047
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Quote:
Originally Posted by historyfan
House maintenance would be from Mother's finances. You as POA could make that decision, whether to repair or not, rent or not, sell it or not...only you.
If it was my kettle of fish, I just sell the house right now as is. Get an appraisal. Offer it at appraisal to all siblings, if none wants to purchase it....list it with a realtor. If more than one sibling wants to buy it for appraised value, you will need auction it off between them.
Put all money from house sale into Mother's bank account. You could as POA buy stock with it or leave it sit, your choice.
I would not get into the potential disaster from let's rent out Mom's house. Mom is not going back to her house,so no reason to save it for her.
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Excellent points. |
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06-28-2016, 06:01 PM
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Location: Eastern Oregon
983 posts, read 861,546 times
Reputation: 1865
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The only thing - is now a good time to sell the house emotionally? Sure, Mom isn't going back - but does she have moments of lucidity when she would like to go back, or is she past that stage? Are you and your siblings ready to let go of the house? The money isn't needed, but perhaps you would like to have one more family party there (or whatever) for old times sake. Could you do *some* repairs - fix the roof or whatever - and sell the house when you are really ready?
We were in a similar situation with my mother's house when she was in memory care. We sold the house for financial reasons, but it was terribly hard to let it go....might be easier depending on how you feel about the house?
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06-28-2016, 06:02 PM
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3,884 posts, read 10,201,609 times
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And I think it is your responsibility to protect her assets for her use, such as medical care. I also vote to sell the house as historyfan mentioned.
There is nothing worse than having a big nonliquid asset upon death and having fights if a group of people inherits ownership of it. I know one group where half want to keep and half want to sell. The keepers don't want to maintain they just don't want to sell. Family is breaking up over it.
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06-28-2016, 06:26 PM
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Location: Las Vegas
14,188 posts, read 27,057,372 times
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Sell! No reason to keep the house. If you wait to sell and rent in the interim, chances are the tenant will do more damage and still more repairs will be needed. Rental property is always an ongoing issue and the bulk of the work will go to you. If you sell it no extra work and you have the money.
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06-28-2016, 06:27 PM
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Location: Scottsdale, AZ and Redwood City, CA
11,118 posts, read 7,271,069 times
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No, no, no, don't let your siblings rent it out. You don't want to turn into one of those families where a down-on-their-luck family member decides to move into Mom's house to live there free and it takes years to evict him/her after Mom passes on. Sadly, this is all too common.
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06-28-2016, 06:51 PM
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Location: Cayucos, CA
215 posts, read 918,229 times
Reputation: 124
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No family members would live there and there is no emotional ties to the house. I also have durable POA.
What about capital gains tax? I thought I had to wait till my mom passes to prevent these taxes. That house is paid off and worth around $900K in So California.
I am aware that a real estate attorney/elder attorney would have these answers but wanted to know if anyone else has had or is in the same situation.
Thank you everyone for your input!
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06-28-2016, 08:01 PM
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18,637 posts, read 10,503,709 times
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Quote:
Originally Posted by aguamarina4u
No family members would live there and there is no emotional ties to the house. I also have durable POA.
What about capital gains tax? I thought I had to wait till my mom passes to prevent these taxes. That house is paid off and worth around $900K in So California.
I am aware that a real estate attorney/elder attorney would have these answers but wanted to know if anyone else has had or is in the same situation.
Thank you everyone for your input!
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It's really worth paying for a consult with a CPA about this but they will most likely tell you the best thing if you don't need the money to pay for the memory care unit is to rent it. Between Federal capital gains tax where you can only exclude the first $250K and California taxes, you'd get slaughtered. Spend what's left of the rental income after paying property taxes and insurance keeping up the house.
Every penny spent with the memory care facility is a medical tax deduction. It's unlikely your mother would be paying any Federal or California state income taxes. Another topic to cover with the CPA.
If there are 401(k), IRA, or other taxable deferred income accounts, you want to spend those down first. Those don't usually escape tax when they're inherited. Another topic for the CPA. |
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06-28-2016, 08:14 PM
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Location: Cayucos, CA
215 posts, read 918,229 times
Reputation: 124
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Quote:
Originally Posted by GeoffD
It's really worth paying for a consult with a CPA about this but they will most likely tell you the best thing if you don't need the money to pay for the memory care unit is to rent it. Between Federal capital gains tax where you can only exclude the first $250K and California taxes, you'd get slaughtered. Spend what's left of the rental income after paying property taxes and insurance keeping up the house.
Every penny spent with the memory care facility is a medical tax deduction. It's unlikely your mother would be paying any Federal or California state income taxes. Another topic to cover with the CPA.
If there are 401(k), IRA, or other taxable deferred income accounts, you want to spend those down first. Those don't usually escape tax when they're inherited. Another topic for the CPA.
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Thank you for the input GeoffD, will contact a CPA. |
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