How do I control the Walmart addiction to conserve assets? I want to do the right thing. Dementia is progressing and I have DPOA for Dad & Step. They currently reside in their own condo in a senior community. Physically Dad is healthy and could go 10-15 more years. Step is much more feeble and refuses knee surgery to increase mobility and is age 86. We are spending ~$1,500 more a month than they receive paying for caregivers part time during the day and all night. Step has a Walmart addiction that is not helping and is angry that Dad is sick and costing them so much money (with caregivers and medication for PD). I get it but he can't help it. The deficit is being taken from an equity line with a 10 year draw that currently only requires an interest payment. At the end of the 10 years in 2023, payments for the interest and loan will begin. They also have a small IRA that is providing $1,200 a month without diminishing the principal that is in Dad's name only. Step had one also but she cashed it out and distributed it to a step-sibling a while ago.
I'm considering placing their condo in my name using the DPOA and including a provision for lifetime rights with stipulations. If I tell the folks, Step will sound the alarm to her kids that I'm "stealing", when actually I'm trying to preserve the estate. If Step passes first, Dad will either move to AL or NH as I won't subject my marriage to any more than it has already endured. I want to protect the assets due to the 5 year lookback. Condo is in Dad's name only and Will provides a 4 way split on their estate, once they are both gone. Is there a way to write it up that it is in my name now while protecting the step-siblings so they won't freak out? Also, how do I control the Steps out of control spending at Walmart so the equity line isn't exhausted before the 10 year draw is up. We are also using it to pay yearly property tax on the condo ~$3k. I have been handling their finances for years now but step-sibling can look into the account so they don't say anything. I'm the only one with my name added to the checking.
I'm worried sick that A)the money will run out too soon and B) we aren't going to be able to pay it back when it's due. I paid for one meeting with an elder care attorney ($300 for one hour!) and intend to visit him again. But I'd like to be able to offer any suggestions that you can provide. Thank you for your help!
Since title is vested in your father's name only, your stepmother would have no authority to encumber the property. Therefore, your father must be the sole mortgagor under the equity line (HELOC)? And he’s the one taking advances not only for medical bills but for the Walmart purchases as well?
Are you thinking that if you transferred title to your name, your father wouldn't be able to access the equity line to pay your stepmother's Walmart bills? That's not the way it would work.
If he's the mortgagor, he remains the mortgagor UNLESS you assume the HELOC obligations and either a new HELOC is created or an assignment of your father's obligations is executed by your.
The HELOC could have provisions allowing the mortgagee to accelerate if title is transferred and it isn't notified. Check the HELOC terms for default conditions and other situations which allow acceleration.
So your father would STILL be able to draw down to pay his and your stepmother's bills. Transferring title to the condo will not prevent this. But it may trigger a default and/or acceleration of the HELOC.
I must be missing something because I'm just not seeing how title transfer from your father's name to yours is going to protect the property over the short or long term. He still will have access to the HELOC.
In addition, does the DPOA specifically give you this authority or are there conditions precedent that need to be satisfied, i.e., the dementia issue?
Frankly, I'm uncomfortable with anyone arbitrarily transferring title without discussing it with the title holder, even if there is some dementia involved. I realize the contradiction this presents.
And given that you're the only person named as joint signatory on the checking account, I think doing this "secret" title transfer truly sets you up for accusations by the family as soon as they realize this has been done.
I also don't understand the IRA issue. You don’t say how old your father is, but Stepmother is in the age of mandatory minimum distribution requirements, so the principal would have to decrease by the amount of the withdrawal unless the IRA is increasing in value by that same amount. Otherwise, the principal of the IRA would be decreasing.
Maybe I'm missing something here, and if so, I'd appreciate a clarification so I can understand your intent.
1. Federal tax deductions of property tax and interest on the HELOC will be lost to your father if he no longer "owns" the condo, which would be the legal consideration after title is transferred.
2. The condo isn't your primary residence, so I doubt that you could take the tax and interest deduction either (unless the tax laws have changed - I haven't been able to itemize deductions for years so I'm not current on this issue).
So both of these offsets might be lost in the transaction.
3. You would as new title holder be responsible not only for the property taxes, but would assume property liability, likely have to change the insured name on the HO insurance, and would be responsible for property upkeep.
4. You would be financially and legally liable for interest and eventually principal payment on the HELOC, w/o offsetting tax deductions. Make sure you're financially prepared for this long term obligation.
5. I think the issue of stepmother's spending goes beyind just collecting stuff. From other posts here and my own experience, the addiction to spending is emotionally and psychologically based - it's not a matter of budgeting. That might be the harder part to address. Others have had suggestions on this issue of spending to satisfy an emotional need. Maybe the stepchildren can get on board with this and help with a solution
6. Your father may feel as though financial and legal control of his life has been taken away,, and may feel "emasculated." That's something to consider, unless it in fact does relieve him of a troubling responsibility.
Thanks for the update; I think your new approach is much wiser and sounder, and definitely get legal advice and get everyone on board.
I run into the issue with my own Mom, she and Dad use to run all over town 2 to 3 times a day, yes per day.... I refuse to do that with the cost of fuel and wear & tear on the vehicles. Mom never understood that her $.25 coupon at another grocery store cost me MORE than what the coupon was worth.
I believe for those older seniors who no longer drive, not going out every day is tough on them, so whenever there is a chance to go to a big box store, it's like going to Disneyland for them.
But I agree; stay-at-home seniors need some diversion. What we need to do is figure out how to create those diversions and enhance their home social life so they don't need to go to several different places. I'm still working on that one.