It may be your beloved family home, or a house your parents bought and even downsized into after you moved out. Either way, if one of your parents is incapacitated due to Alzheimer's, at some point you or a sibling may need to sell the home, so they can move into a nursing home, assisted living facility or in with you.
Elder law attorneys say the sale of a parent's home is an issue they receive inquiries about daily. Here's what caregivers need to know before sticking the "for sale" sign in the yard.
Q: Why can selling a parent's home be such a complicated issue?
A: The bottom line is: Only the person who owns the house can transfer the house to a buyer, says Henry Carpenter, a certified elder law attorney with Bucks County Elder Law in Pennsylvania and a member of the National Academy of Elder Law Attorneys. If a parent has become incapacitated, he or she needs to have identified – through a power of attorney – someone who can act on their behalf, for the sale to take place.
Q: When a parent has Alzheimer's, what rights does a caregiver have to sell their parent's home?
A: "If the caregiver has no legal authority, then the caregiver has absolutely no right to sell the home. Period," says Wesley E. Wright, a certified elder law attorney with Texas-based Wright Abshire Attorneys.
If there is no power of attorney and if the parent has lost capacity or is unwilling to execute one, the caregiver has to apply for guardianship to get the power to sell the home. Guardianship can be an expensive and emotional process, through.
Q: Should caregivers awarded guardianship expect any extra steps to sell the house?
A: The court has to approve each step of the process. If you're selling the house to pay a nursing home, for example, you have to file a petition in court to ask the judge to say you're authorized to sell the house and authorize you to pay the nursing home a certain amount each month or year. Carpenter says those rulings could take one to two months, possibly delaying the sale of a home. The court also has have to approve details of the sale, such as the sale price.
Q: How else does having a court involved impact the selling process?
A: You can't petition the court for approval to sell the house until you have a signed contract for the house. In the contract with the buyer, you should include that the contract is subject to approval by the court. Once you and the buyer sign that contract, it will be filed with the court. Then the court reviews it and decides whether or not is it a good deal, Carpenter says.
"The real problem is where buyers have gone, ‘You know what? There's another house across town, I don't want to deal with all of this,'" he says. "That happens."
In one guardianship situation, Carpenter remembers getting permission from the court to sell the property, but having the buyer back out two days before closing. Another buyer, an investor willing to pay cash, quickly put in an offer but wanted to close in two weeks. Carpenter went to the courthouse and walked the petition through the process by reviewing it with the court administrator and bringing it to judges' chambers. Within an hour, he had a signed order. But that's not the norm, with it usually taking two weeks to a month, he says.
Q: What other challenges could exist, even if a caregiver has power of attorney?
A: The title company still may not accept a power of attorney. In some cases, title companies question if the parent had the capacity to sign as power of attorney when they did or they may even say the power of attorney is too old, says Wright, also a member of the National Academy of Elder Law Attorneys. If power of attorney was recently created, the title company still may require your parents' signature or to see or talk to the parent to confirm the caregiver can handle the sale.
Wright says this scenario happened to him with the sale of his mom's home. "You're going, ‘What are we talking about? We have power of attorney. And we've done everything that the law requires. Now you're telling us we can't even use this power of attorney,'" Wright says.
The bottom is that when the time comes to consider selling parent's house, caregivers will likely face some tough legal issues. It could be a rocky road. Don't go it alone. Seek advice from a reputable elder law attorney who is familiar with the type of situation you face.
Next: Will You Be Able to Sell Your Home?