The Durable Power of Attorney and Selling Your Aged or Sick Parents' House

Imagine you have the power of attorney over your parent's finances. Suppose your father and mother have Alzheimer's disease and are in a nursing home. They do not have the financial resources to pay for their care. Besides your responsibility for paying for them to stay in a nursing home, you know someone has to pay for their expensive medicines. You do not have the money to pay for their care. You have the power of attorney over the finances of your aging parents, and you wonder if you have the legal right to sell their home to pay for their care.

According to Barbara Repa, a senior editor for caring.com and an attorney herself, the power of attorney document itself should spell out whether or not you have the right to sell your parents' home. She said that to find out one might have to read through a lot of legal jargon and do research.

Repa said the first step is to be certain the power of attorney document has actually taken effect. Many such documents require that a doctor, or two, certify in writing that the parent in such a case is incapacited before it takes effect.

The power of attorney document itself should spell out specifically things you can and cannot do for your parents, and if you are able to sell their house, it should specify that right. If a power is not named, do not assume you have it.

Even if a power of attorney document gives you the right to sell your parents' home, beware of one thing. Many such documents have a phrase in them that says something to the effect that you might take any and all steps to be certain that you are carrying out the best interests of your parents. That phrase could allow someone to challenge your decision to sell their home. If you are afraid that your parents or someone else might challenge your decision to sell, it might be wise for you to obtain a signed statement from an estate planning attorney or financial planner that your decision is wise.

Another obstacle you might have is when you go to the bank or other agency to complete a transaction to sell the house. If your Durable Power of Attorney (DPA) and evidence are in hand and you have certificates from a doctor, you might not have any problems. On the other hand, some banks are sticklers for rules. They might require you to sign an additional document, verifying that you have the right to sell your parents' home. If the name on the house title is different than the one on the DPA, that could cause problems. You might also have to mail showing alternate forms of your parents' name. You might have to furnish their Social Security cards. You might have to furnish their birth certificates.

Before selling your parents' home, you should discuss the matter with an estate planner and your siblings.

Suppose the situation is a little different. Your parents do not have major expenses that you are responsible for. They are still not able to care for themselves or take care of their home, however. Does your DPA give you the right to transfer the title for your parents' house to your name? Should you do that? Would that make it simpler when they pass away to have already done so?

Financial expert Llyce Glink on the website thinkglink.com says you should explore other options first. According to the expert, you should consider transferring the title for the property to a trust. In the trust you or other heirs will be named as beneficiaries. At the death of your parents, the house will bypass probate and go to the beneficiary or beneficiaries. You will still be able to take advantage of any step up in the basis of the home. If you transfer the property to a trust, you can rent it. You still have the option to sell it, if your parents cannot take care of it, and you cannot either.

If you transfer the title to yourself, you will most likely receive it at the amount paid for the home plus any capital improvements.

If you are uncertain what to do, talk with an estate attorney or an elder law lawyer. Don't forget to talk with your siblings. You need to get all the details right, in case your parents require government assistance at some point.

Citations:As power of attorney, can I sell my parents' house?No author listed, caring.com

Power Of Attorney And a Parent's Home,by Ilyce R. Glink, Thinkglink.com