As my mother’s POA am I responsible for the property left to her as a living trust?

I realized after posting about life estate in general, the original question wasn't really addressed.

When you take on the POA duties, you are basically standing in her stead to manage finances and other decisions. You are NOT responsible to pay her expenses/debts from your own funds. The POA document may or may not specify what duties and tasks you can or can't take over, but you would be responsible for paying her bills, managing her medical (including insurance) and see to any/all finances FOR her, from HER assets. As for "caring" for the property, I would think that falls under your duties (BUT not from your finances!)

IF she has any assets, they should be used for the maintenance and upkeep of the house until it is sold. This includes utilities and necessary repairs and working on keeping the grounds kempt and snow removed.

If she doesn't have any assets to hire someone to do the yard work/snow removal and keep the house itself safe/in good stead, then it is even more important that you seek advice from an Elder Care attorney who can guide you.

If your step sister is the trustee of the life estate, especially if she is the beneficiary, I would think she would want to ensure the house is kept in good repair. I believe if she is the trustee, she would be the one responsible for upkeep (with funds from mom, if there are any, but not the utils, etc.) seeing to the sale and distribution of funds received from that, but again it would be best to consult with an EC attorney. We had to use the one who wrote this all up (some serious $, but it was taken from the sale proceeds.) The attorney who handled the sale of my home backed away from this one! It can get complicated. I was surprised that he told us I could sign for everything else, but NOT the deed. Mom, with dementia, living in MC, had to sign it!

In any case, step sister should be involved if not interested, as she is likely the trustee/beneficiary. Who would want to inherit a run-down house that will incur bigger repair costs if the place isn't taken care of now?

I posted what we had to do when we sold a life estate while mom was still living, but here's what Investopedia says:

"Life Estate. A life estate, when used to gift property, splits ownership between the giver and receiver. Many parents set up a life estate to reduce their assets in order to qualify for Medicaid. Even though the parent still retains some interest in the property, Medicaid does not count it as an asset."

Note that it says "gift" - so this would likely fall under the 5 year lookback.

Also, there is a LOT more detail in the following link - worth a good look for anyone in this situation:

https://ssbllc.com/five-facts-to-know-about-life-estates/

In particular, I noted that although the person can qualify for Medicaid while the property is still in the life estate, Medicaid will place a lien on it and "...the lien will have to be satisfied from the parent’s share of the sale proceeds." Note here "parent's share", so Medicaid would not be able to touch anything more than what the IRS tables indicate is the parent's remaining share.

Do read the whole article - it covers a lot of information (every person's situation is different, so there could be detail here that can help you to better understand everything!)

Our mother's condo was transferred to a life estate. This is pretty much how others described it - she is doesn't own it, but is allowed to live in it until she dies and then we three, the "remaindermen" would become the owners. The benefit in this is mainly for tax purposes (we would get the step up in value when she passes and it would reduce the capital gains.) Unfortunately, several years later the dementia kicked in and after she refused to let the aides come in (she didn't require a lot of help at that time, just sanity and make sure she took her meds set up in a locked timer), we had to move her.

Our EC did tell us that renting it out was okay. Because of logistics, cleaning it out, repairs and cleaning took a long time. We had to find another insurance company, because "regular" ones will not cover a house with no occupants. The heating system died, the seals on the windows started blowing, one after another, other small repairs needed to be done and some serious cleaning in the kitchen (cleaning elsewhere too), but this was all taking a toll on me. When I thought about the whole rental thing, I decided I am NOT going to become a landlord and many of the companies that will "manage" it end up getting most of the "profit." So, the plan became SELL! Which we DID. Mom is still alive. EC Attorney did require that she sign the deed (I was able to sign all other paperwork for her as POA.) Fortunately the facility has a notary, who told me her duty was to witness mom's signature, not verify her capacity, because my plan was to tell mom it was insurance paperwork or something.

What happened from there was more work for me... As others mentioned, there are charts which based mom's share on life expectancy. That would determine her percentage of the sale. We got a check for each of us (we put it all into the trust that was set up around the same time, to be used for her MC facility - no Medicaid.) On paper, it was split four ways, and reported to the IRS (state may need something too.) We put it all back into the trust, for mom's care. I had an Enrolled Agent do the taxes and gave each of us an estimated cap gains amount from the trust to cover that. We have to claim that money too, but this is all for mom, so I distribute trust funds to "process" all of that.

At some point when she does pass, we three are the trustees of the trust, so we will get a third of whatever is left. It was time consuming and painful for me, in many ways, but that's over and done with! I DID use her funds/trust money to cover the expenses while it was still part of the life estate.

With someone else being the "trustee" or "remainderman", it makes it complicated. If you can get an answer from the attorney who set it up, that might be the best route. A good EC attorney should be able to understand all this and sort it out. I should think, based on what we did, that it *could* be sold, with mom getting her %age based on age and stepsister would get the remainder. It IS complicated and we had to use/pay the EC attorney to handle our end of the sale. A regular attorney won't do it!

Meanwhile, any expenses should be covered by mom's assets. If she doesn't get enough, there should be a way to get a home equity loan and pay someone to take care of the place (yard work, repairs, etc.) Also, as I noted, you should inquire about the insurance. The best deal we got was through the Master policy (the building minus deductible and upgrades was covered by the condo association, and we got the extra policy at a very good rate.) Some places had ridiculous quotes, so shop around!

As for the state (Medicaid?), my understanding is that she would have to self-pay until her share of the sale and any other assets are depleted, but you would want to apply for Medicaid well before the funds run out. EC Attorney should be able to help with that as well.

My mom has a similar set up in CT but she has Life Use of my grandmothers house (my mom was her live in caregiver for many years before she passed). She is responsible for up keep and taxes etc for as long as she wants or until she dies at which time the house is divided between my mom and her siblings or their heirs. Basically my grandmothers estate can’t be finalized until my mom either passes or is ready to give up the house, my mother is also co-executor of my grandmothers estate with the attorney that set it all up so it gets confusing to people but it really isn’t. My mother has no current ownership of the house, the estate owns it and while the state can certainly claim part or all of her inheritance when the house is sold they can’t force the sale of it or claim more than her 1/4 when it is. So much of this likely depends on how the living trust is set up but I would be surprised if you or your mom have any responsibility to maintain the house if she is no longer living there and won’t be going back, seems to me there must be a way to let it pass on to your step dads daughter. But I completely agree meeting with an estate attorney, if it can be the one that drew up your step dads and mom’s estate all the better, is in order and well worth any expense your mom incurs for it (your mom incurs the expense not you).

Talk to an elder law attorney. It will be well worth the consult fee.
This is too complicated for do-it-yourself.

Seek out counsel from an elder law attorney.

Each State has slightly different laws about this, but let me tell you what our family is doing.
My mother is 102 and until recently she was living in her own home. No Estate. She fell, broke a femor and is now in a nursing home. She will not be returning to her house.
As POA my son is paying all the house expenses, taxes, oil, power etc. We will then sell the house. The money from the house goes to the State and when she has no more than $1600, the state of Connecticut will provide Medicaid and pay for the nursing home. The state also takes her social security and pension.

You, as POA are not obligated to maintain the house, but if you want to sell it, you need to pay the tax , the realtor etc. But USE HER MONEY. You have that complete power.
we felt it worth speaking to an elder lawyer. They can be extremely helpful and save you money and aggravation.
Also, take care of yourself , please.
best wishes

Ask an attorney who can give you correct answers in regard to the state you live in and the legal document pertaining to the house. Call the atty who wrote it and you might get info for $little or nothing.

Karin, there are too many questions needing answering, such as:

- Is the house in the trust, in other words, is the house deeded to the living trust?

- If so, who is the current trustee?
-- I can only GUESS the original trustees were both your stepdad and your mom. If this is so, then your mother should be the trustee.
-- If your mother is trustee, with Alzheimer's she may not be competent to sign any documents. There should be a paragraph in the trust in case of incompetency and how that's handled.
-- If the trustee was only your stepdad, and your stepsister is the successor trustee, it's all on her to control the house, according to the terms of the trust.

- Who has the trustee documents: the original (or copies) Declaration of Trust, all amendments to the trust, and the Schedule A (the document that lists all the property IN the trust)?

- Does the trust document establish a life estate for your mother and what are its conditions?

You stated "Except [the house] has value to my mother if she out lives her savings. If I sign it over to my stepsister I could be responsible for paying ..." If the house is in the living trust and you're NOT the trustee, you have no authority to sign over the house or sell it. The authority for any trust rides with the trustee/successor trustee (or applicable term) and not a POA.

The bottom line is: what do the trust documents state and how the house is deeded. Verifying how the house is deeded is easy, you can look it up online (many municipalities have a city or county website where you can look it up) or you can call them since it's hard for you to leave the house.

Find the trust documents, find out who is the current trustee, with help from your stepsister. She has a vested interest in figuring this out too! This isn't all on you to solve!

From there, contact an attorney (that you're already doing) and get advice for your mother's rights and authority, if she has any.

Taarna had great suggestions to earning income from the house and its benefit to your mother and you. I hope you're able to find a great outcome for yourself, Karin. You deserve peace and taking care of only yourself.

May I suggest that it would be better to get a renter into the house and have a rental management company take care of it. Mom still owns the house and gets an income. You don't have to do the upkeep. Less headaches all the way around. Use the money to hire help for mom - and so you can get some care for yourself accomplished.

Karenslife. I feel for you! I went through this same exact issue this year. Sorry, this will probably be long. My mom had a life estate on my stepfathers deed. At her death his 2 daughters who were the remaindermen would get the house. Last July I moved my mom who lived in PA into AL. Her grandson who had been living with her was remaining in the house. She had been his caregiver for the past 15 years. He now had to apply for a HUD apartment of his own. It took 9 months but he finally got placed in one. So as of this past Feb the house was now empty. To make matters even more complicated my mom hated it in the AL facility that was very nice and one that she was previously employed. She called me in South Carolina threatening me that she had a house to live in and she was gonna walk the 2 miles to her house and she would kick the door down if no one would take her. I finally moved her in with me down here last November. Back to the life estate. I talked with an elder lawyer in SC. I told him the house that my mom had a life estate in was going to be sold. It was empty and we did not want my mom to be responsible for paying the taxes, utilities, insurance or maintenance for ex if it needed a new furnace...She would be responsible for paying for it. He explained that yes, it would be her responsibility. The only income she had was SS and that was $1,300 a month. She had no savings. He advised not to sell the house and that if mom had to be put in a nursing home that Medicaid would ask for her share of that life estate. In the Medicaid Manual there is a chart that shows factors for the person who holds the life estate and another column for the remaindermen...the step sisters. It is based on age at the time of sale ( needs to be a fair market value price)and then shows the factor. You would times the sale price x this factor. According to the chart my mom should have received $42,000. According to my lawyer if she did not get this money she would be penalized. For ex if one month at a nursing home costs $6,000. You divide that amount into the $42,000 which equals 7. The penalty would be... I would have to keep her for 7 months before a nursing home would admit her. Long story short...the end results... after multiple visits to my elder attorney and a visit to an Elder attorney in PA, which my step sisters went with me.. my mom got NOTHING. The elder attorney in PA said there was no value to the life estate. She sent me another chart which had to do with Tax Revenues and it indicated she should get $14,000. My step sister in PA called my attorney in SC and he told her if PA says there is no value that I better get that in writing in the event Medicaid here would ask for the money. I do have a document that shows this. On the Medicaid app there is a question...Have you gifted anything in the past 5 years... The attorney explained to me that Medicaid would consider my mom getting nothing that she gifted her amount to my 2 step sisters. I myself now after getting the document stating there was no value will answer that question NO. But Medicaid may still find out and then will have to explain. I still want to see the attorney 1x more to show him the document. Also he advised that I either do a Caregivers agreement or a Rental agreement with my mom. So I opted for a rental agreement. $700 a month is automatically deducted from her checking account and into a separate savings account in my name. I have not touched that money and won't. I want to keep her for 5 years if possible that way the life estate won't be an issue anymore. But if I can't then I will self pay for her nursing home from the money she has in her checking account, and cash in the 5 whole life insurance policies she has had for 50 years. I would also use the rental money if I had to in my savings account to pay down the penalty amount if I have to. Worst case scenario...I will have to keep her with me for 7 long, hard months.

It sounds as though she needs to be in a nursing home. This requires putting her on Medicaid, which is tricky. See an eldercare attorney for estate planning, or at least a social worker. Use her money to repair her home. Not yours.

You people really need to talk to a probate attorney. The house is trusted to the other daughter...he did not leave it to his wife. You need to contact her. BTW; of course the state considers all assets when spending down. Who ever told you otherwise does not know what they're talking about. It goes right down to every asset she owns including cars, houses; the whole deal. I've seen the brutal spend downs and the kids trying to hide assets...they will investigate as well. You work 24/7...well she did when you were a child. No good deed goes unpunished. Truth...
sure you get to stay in the house but it's no longer yours if you spend down.

Medicaid has nothing to do with the house until Mom passes and I am not sure how a life estate will effect that. Just my outlook, life estate means that the person can live in the house, they don't own it. Once Mom moved out and in with you, that agreement was null and void. So the house reverts to daughter. How does the trust read? Was Mom ever on the deed? If not, them SF just made sure the house wouldn't be taken away from her. That she had a place to live. She now doesn't need that place. You really need to speak to the lawyer who drew up the trust.

My "outlook" comes from knowing a woman who set up in her Will that if she went first, her second husband would be able to live in "her" house until his death. Upon his death, the house reverted back to the children of her first marriage.

Medicaid does not consider a home when concerning paying for care. They look at Moms finances. What she brings in monthly. Money she has been put aside. Insurance policies with cash values. CDs, IRAs, bonds, stocks, shares, anything that can be liquidated. That money can be used to prepay a funeral. Any money she may have needs to be used for her care before Medicaid will pay. If all Mom has is her monthly income and its under the cap, applying should be easy.

What I did was start the Medicaid application in April. Mom moved into a NH May 1. She paid 2 months Privately and Medicaid took over July 1st.

So, stop worrying about the house. Its not considered till after Moms death. At that time ur POA is no longer in effect. The Executor will be responsible for figuring out how the house works. My feeling, Mom is not a legal owner.

You personally are not responsible for the house. Once Mom is in a facility on Medicaid all her money will go to her care. Nothing will go towards the house.

You need to get the daughter involved. As his daughter she maybe able to do things you can't.

Come back and tell us how things work out.

You are not responsible for the house. Is your present living situation adequate for you after your mother passes? I would try other attorneys. Even though this situation is very unfair to you are you OK with not receiving anything once the house sells after your mothers death. I think the right elder care attorney could help you. Your mother needs to be placed in a facility. She needs ideally to be on Medicaid. We have a friend who has 24/7 care for her husband paid by Medicaid. Their house is in a trust. They set all this up with the help of a good lawyer practicing in elder care. I am sorry you haven't received more help but there is help out there. Do you have any relationship with the stepdaughter?

Please do not spend another dime on the house.
Mom has some sort of income, like SS $. Mom could pay house stuff. But what may be better is for her to pay you for caregiving &/or rent. Find a new CELA level of elder law attorney & have them draw up legit agreement for whichever works best for your personal finances. Also ask atty if you can place a lien on the property for taxes (& maybe insurance) that you paid & have atty draw this up for you to file.

Set aside what sounds like a total clusterF on the house for now.
House can sit there empty. No matter who is or isn’t owner, it can be there vacant. Neither you or mom have to pay for stuff. As DPOA your responsibility is to ensure her health, safety and security. Having a caregiver agreement and her paying rent for a furnished, maintained home with amenities does that.

once you do this, you’ll have $ coming in. Maybe not enough in a year to totally repaid whatever you paid on house, but $ to you nevertheless.

This will give you breathing room. Your probably beyond overwhelmed in all this, plus dealing with never paid a penny step daughter in FL.

It will give you time to sort out ownership on the house if you want to.
So do you know what exactly is legal recorded at the courthouse on it? I’m guessing in my-not-an attorney opinion, that documents done were / are flawed. This is why attys aren’t interested or returning calls. Like it’s was not done correctly for Living Trust or it’s actually a Life Estate. & with imperfect secondary something for Missy Florida thrown in.

These issues turn on how the deed for the house is titled.   It's not clear to me if the house is titled in the name of the trust or your stepfather's daughter.   

The person who is the trustee, or settlor as it's called, is the person who can and would have to convey the house from the trust to an individual.  

You wrote that b/c of "Because of being left as a living trust the state can get a portion of it if her money runs out first".  Are you referring to a Medicaid interest, or something else?

No I don’t believe you are. However the house should have been turned over to your step sister if your mom has moved out and won’t be returning. Usually that’s how it works with these life estate things. Your mom is allowed to stay in the house for the rest of her life right? But she can’t sell it or give it away. Upon death or her moving out, the house belongs to your step dads daughter right? I would just tell the daughter it’s her house now. Your mom does have the right to leave the house & give up her financial responsibility to it.

You really should consult an Elder Care Attorney for best how to deal with the property and the trust.
And as far as maintaining the property the funds to do so should come from your moms monies not yours. If you have been paying to maintain it I hope you have receipts so that you can be reimbursed. This is also for homeowners insurance, gas, electric, property taxes and all the other good stuff that comes with owning a house.