Should I pay off my grandma's house?
i recently found out my grandma's house that bought in 1965 for $6000 has an unpaid balance of $7000 because my mom has not paid off the second mortgage her and my dad took out on grandma's house in 1990.
according to my grandma's will dated 1989, the house was paid off and was to be left to my dad when she passed but in 1990 my parents asked to mortgage grandma's house to help them purchase a vehicle for their business and they would make mortgage payments and my grandma said yes. in 2003, my dad died which left my mom making grandma's house payments and mom has been struggling financially ever since dad's passing and the house still has not been paid.
i am now my grandma's caretaker and have moved in with her because she is 92yrs old. she is in good health but without me would be alone. i am trying to get my grandma's financial and legal matters organized and prepared and i have made an appointment to update her will but i am thinking should i pay off my grandma's house and have her sign it over to me? because it was already willed to my dad it will be left to my mom and grandma told us "grand kids" the house would be ours when she passes. i feel i have to hide what i am doing from my mom because she has her own plans for grandma's house. but if i'm her caretaker i shouldn't have to hide anything i am doing.
please help!!
31 Answers
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If your Grandma is of sound mind, she can add to the will (codicil) and state her wishes there so that it is all clear and legal. Does she have other children? Who is the executor? If it was your Dad, who is listed as executor now that he is gone? Just because you are helping her out and living in the house does not mean you will have a legal claim to it when she is gone.
Personally, I wouldn't pay off the mortgage until this is all settled.
This business of caregiving for an elder with dementia is more complicated than simply loving the person. There are all the legal issues (POA, hippa release of information forms, wills, medical proxy, etc. etc.) and the medical issues (reduced mobility, possible incontinence, difficulty swallowing or breathing, etc.) and the basics like food and utilities and home maintenance and RESPITE CARE. Also relationships with the rest of the family need to be factored in. Sigh. Caregiving is not for sissies! :D
If you need to be using free handyman services and legal aid, etc., then it sounds like it may make sense to apply for Medicaid sooner rather than later. At least look into it.
And take those breaks you need!
What kind of assets/income does your grandma have? Enough to take care of her the rest of her life, even if she goes into a care center or needs significant in-home care? (Please look into these costs if you are not familiar with them.) If GM can support herself no matter what for the next several years, you have more options. If she MIGHT need medicare, then signing the house over to you will backfire, and paying it off may not be best. You really need the help of an experienced elder law attorney. A crystal ball wouldn't hurt, either.
Ethically, would signing the house over to you be consistent with her wishes that the "grandkids" should have the house? How are you planning to share with the others? How is the will being changed?
Hiding this from your mother seems (to me) selfish. It is not like she won't find out when GM dies. Why let her continue to make plans assuming she will get the house? Shouldn't she know the will is being changed?
Lordy, Grandmother may live another five years or more, and already there is conflict over who gets her house. Sad.
You will have to involve your mom in this at some point. My gut feeling is that this will get ugly.I have to totally agree with Jeanne's view on this.
Whom is the responsible party on the 2nd mortgage? If it's just your gran, then mom isn't legally responsible no matter what verbal agreement was said. If your dad is listed on the 2nd mortgage, then his debt on the 2nd mortgage died when he died in 2003 unless it was included as a debt or discharge of his estate.
Do you have the paperwork (Deed of Trusts) on the home? For both the 1st paid of mortgage and the 2nd mortgage? If not you need to go either in person or on-line to the assessors office to get them. I'd also run a mechanic's lien review on the property just to make sure there isn't something else out there that could cloud the title on the property.
Why the need to pay off the 2nd mortgage - are there foreclosure or other legal issues out there regarding the 2nd that is a current problem? If gran has the $ to pay it off, then she should just go ahead and do it if she's is the legal responsible party. Your paying off the mortgage, unless you have a binding agreement as to the payment being a debt of the legal property owner to you, is nothing but a nice thing to do. If I paid off someone else's debt, I'd have the property served with a lien against it to protect my interest.
You have to be a hard realist about gran being 92. The probability is that at some point her level of caregiving will be such that she needs more than you: she will need to have caregivers paid to help out, how is this to be paid; OR she enters a NH and either the family is going to private pay for it; or sell her assets, including her home to pay for her care; or she can get her financial & medical situation to the point where she qualifies for Medicaid. If she still has a home it will be an exempt asset but subject to MERP - Medicaid Estate Recovery Program - upon her death & none of her $ (like SS) will be available to pay for anything on the house
If you sold your 92 yr old grans house today and she needed to go into a NH anytime before May 17, 2017, then there will be a transfer penalty imposed on all the $ from the sale of the house that was not used for normal living expenses and medical needs. All these issues are super sticky and a good elder care attorney really needs to work with your gran on figuring out what works for her state's law and approach to Medicaid. Good luck.
So, don't feel bad if you're in over your head. So were many of us to begin with. Get help. See a lawyer. Talk to a social worker. Don't try to handle everything on your own. You are right that having the POA can be a tough role. With early stage dementia this dear lady needs someone to take action in her own best interest. It is kind of like parents insisting their kids can't eat candy all day and they have to wear their seatbelts and get vacinnations. Taking care of someone isn't just about giving them what they want. It is doing what is best for them, too.
You don't say how old you are, or what your social life is like, or whether you work, etc. No matter what, I hope you stick by your gramma to the end -- Sam and Gram make a fine pair! But give some very careful thought to whether that can be as her primary caregiver. Always be her loving grandson, whatever other roles you may play.
I wish you the very best.
Grandma should change her will to make sure it reflects her wishes. You said she wants the house to be for all the grandkids. If her other grandkids are fine with you getting it, they might talk to her about that so she wills it just to you. I think that would make everyone's lives easier. I can't think of any reason not to update the will now. Nothing else has to be done first.
It sounds like your grandparents loaned your parents money, to help them over a rough spot. That money has not been fully repaid. To obtain money to loan them, grandparents took out a mortgage on their house. It has not been paid off. The question is, should it be now? What is the interest rate? How is it that the morgage holder is not insisting on payments to at least cover the interest? What are the financial consequences of paying it off now as oppsed to making monthly payments? Is there cash available to pay it off? Make the decision on purely practical considerations.
Although there are exceptions, I think it usually makes sense for the on-site caregiver to have POA (both financial and medical). Move forward with this.
Let us hope that Grandma has many years ahead of her. Having early dementia now is a warning that she may need increasing care. She could also fall, or develop a chronic condition, or for any reason need more care than you can provide alone. More help is available; it just costs money. What resources would be available if this happens? What resources does she have? Would she likely need to apply for Medicaid? This is just a layman's opinion, but I think you will be better off inheriting the house later than having it put in your name now. Putting it in your name now can have serious consequences if GM needs Medicaid in the next five years. GM would be allowed to keep her home when she applies for Medicaid, and since you have been living with her and taking care of her, it may be exempt from the recovery program after she dies. As I say, that's a layman's view -- you may want to discuss it with a professional.
And gmaandsam, I am sorry that my original post upset you. I was not making accusations against you. And I still am sad that there is conflict over the terms of grandma's will to the extent you don't even want to have your mother know about it. I am sad that a loan generously made years ago is now the source of conflict in your family. As I see it, this is a sad situation. You are handling it bravely and by trying to gather information. Good for you!
I agree with you totally, gmaandsam, that you should not be spending money out of your own pocket on this. The bottom-line issue (as I see it) is, Is gma competent to make her own decisions? If she is (in the legal sense) then she can choose to not pay her taxes, to use all her money at the casino, and to rely on the kindness of others. Of course all those choices have consequences, but she is entitled to make the choices and face the consequences. In our culture, which highly values independence, adults are allowed to make their own mistakes.
BUT if she is not competent to make her own decisions (in the legal sense) then she is considered a vulnerable adult. Our culture tries to protect vulnerable adults from self-harm and from others taking advantage of them.
So it boils down to, is she fully in her right mind?
If she is, and she is willing to give you POA and to let you manage her finances, great. Lots of work for you, but problem solved.
If she isn't, but she is with it enough to understand the concept of POA and to give it to you, great, problem solved again.
If she is considered competent to make her own decisions and you cannot persuade her to let you help by taking over the finances, then I think that your hands are tied. It is very, very painful to watch a loved one do self-destructive things. My heart goes out to you.
I can't remember, and if I go back to look I'll lose this post -- have you talked to people at Social Services? You won't have any authority to insist on anything they may recommend, but I think it could be very helpful to have the situation assessed by an objective, trained third party. An inatke social worker would be a no-cost professional who could give you and gma some options and advice.
My heart really goes out to you, trying your best to take care of this elderly woman you love, and running into obstacles one after the other.
Take care of you, too!
she's not happy having to pay off my mom's loan but she understands its the only way the house will get paid.
as for my mom. she is not concerned about paying off gma's house at all. with dad gone, mom now has a new life. asking her for any thing isn't easy even if it has nothing to do with gma and when i told her yesterday what the nurse said about early signs of dementia and gma's appt with legal aid & POA, mom just made her usual face & reminded me of what will happen once i am in charge of gma & her finances.
we(gma & siblings) believe mom's plans for gma's house is to sell it after she passes and use the money to fix her house next door. although she does not live there she let her boyfriend get carried away with remodeling 2yrs ago and it still has not been finished. mom selling gma's house wouldn't be a problem if that was what gma wanted but its not.
according to gma, she wants the house to be sold and money split between the 4 grandkids. and we all agreed that its "whatever gma wants". at the same time, i can't help thinking gma's house is not paid off, i don't own a house myself, if gma is ok and agrees to it, why not pay the house off and put it in my name? my sisters already own their own homes and both said "it doesn't matter if gma leaves them a part of the house or not" the only one who would have a problem is my brother but its expected of him because he & i dont get along and he lives next door in mom's house "rent free"and without a job. asking him to help my gma or my mom with cutting the grass is asking too much.
thank you all for your suggestions & advice. it does help
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