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She lives in an assisted living home at this time and all four of the children are not sure how the law reads for something like this while their Mother is still alive. The home is rented right now to family living and some income is coming in to help with bills. I have read a lot on this and what I have read it is not legal. She has to have already sold it on her own before she got so bad or we have to wait until she passes. If there is anyone that can answer this for us we would be so thankful.

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You can ask the legal community, google AVVO. I love this site, you can pose your question and receive answers from a number of attorneys in that specialize in elder law, Medicaid or whatever. There isn't a charge to do this and you may hear from an attorney that you may want to use. The site also has ratings for attorneys.
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Does somebody have durable power of attorney for her?

How is the AL being paid now?

Those answers may help someone answer the question more definitively.
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I don't know if your mother is on Medicaid or not which would make a difference. If she is not on "aid" then the following might be accurate, but I am basing this on my own experience and what an atty and real estate agent told me.

People with POAs which specifically include selling real estate can do this for their charges, but you need to be sure that it is in there. Ask the attorney who put together the POA or read it. This power should be enumerated quite clearly if it is there.

I have sold 2 properties with a POA; the out of state one required that I file a copy of the one on file at her county courthouse with the courts in the county of the new state. That made the process longer and more expensive, but we no longer have to pay property taxes there!
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