She has cognitive issues, my husband is POA and the house is in a trust. The money will go into a trust for her to use as needed but she needs to sign a document for the sale of the house. We are concerned this will upset her and not want to sell but she already lives with us and the house is just sitting there. We don’t have the energy to rent it or keep up with it. Selling is the best option.
1. The Trust is a Living Trust; the house was retitled and transferred by Warranty Deed into the Trust?
Who is the Trustee, and who's the Successor Trustee?
2. If your mother "has to sign a document for the sale", I'm assuming she's the Trustee? Otherwise, what would be the basis for requiring her signature, assuming the Trust provides the Trustee with authority to sell the house?
Closings typically require execution of a lot more than "a document." Would this upset your mother as well?
3. If the house has been funded into the Trust and title changed accordingly, the transfer deed recorded, the authority to sell is vested in the Trust, and the proxy under the POA would not have the authority to sell, so that's really not relevant, if I understand the situation.
4. Your opening statement indicates though, that you have already sold the house. Has a closing been scheduled? Has the title company raised specific issues about your mother's interest as well as the Trust involvement?
5. Your mother "has cognitive issues"; is she able to understand, if she's the Trustee, that the house has been sold?
Beyond those issues, which are critical, I think I would approach the sale as enabling her to have funds for her needs now and going forward. You could also point out that the house isn't generating income, but is still expending it, in upkeep and taxes. So selling would stop that wasted money, and general real income, at a time when the housing market is still hot.
I see that Newbie Wife posted while I was typing, and raised similar issues about vested title, and Trustee authority vs. proxy authority. I don't feel like editing my post, so I'll just leave it - these issues in fact are critical.
For legal advice, please consult an attorney and don't rely on advice from we well-meaning laypersons in the forum.
How long has MIL been living with you? I know your question doesn't have anything to do with this, but your username and profile suggest there is a lot more going on than what to do about selling her house.
See a Trust and Estate attorney for this question. Take all deeds and POA, Trustee documents with you. Too important to leave to the Forums of the world. You have a serious duty in acting as POA and Trustee that is a legal duty with meticulous record keeping needed, and things must be done right.
Your POA will pay for the hour of time you need with a Trust and Estate attorney. Your MIL would not, if she is suffering from dementia, be required to sell anything. If she is NOT suffering from dementia she cannot be forced to do anything.
Will she comprehend what the papers are for? If so she will know the house is being sold. At least for the moment she will know.
You can tell her that there is a nice family that wants to buy the house and be as happy in it as she was with her family. That might make her feel a bit better knowing that it will go to "nice" people.
No matter what you tell her she will probably be upset with the fact that she is not going to be able to go back there.
NOW....
Use the money that you get for the sale of the house to:
Pay for caregivers so that you and he are not doing all the work. (I sure hope he is pulling his fair share since it is his mom)
Seriously consider using the money from the sale to pay for Memory Care.
Your DH needs to read his DPOA. Does it allow him to sell his mothers house? Also, is there a clause saying to make the DPOA effective, Mom needs a formal diagnosis from one or two doctors. Your husband can do nothing if he does not have the right to sell and no formal diagnosis of Dementia.
If he can sell and has a formal diagnosis, Moms signature is not needed. She, if found incompetent, cannot sign any legal binding contracts. Your husband will sign his name followed by POA as her representative. I would make sure I understood the wording of the trust before I went ahead with anything.
Since you both seem burned out. I may take any proceeds you get from the sale of the house and place Mom in an AL or MC facility.
2. Is the trust a revocable living trust?
3. What are the terms of the trust? Does the trust allow the house to be sold?
4. Check with your or your mother's CPA. What sort of tax impact would sale of the house have?
5. If the house is truly in a trust, it would have to be titled in the name of the trustee of the trust.
6. Only the trustee can sell the house, in accordance with the terms of the trust.
6. Your husband as POA agent has no power over the trust.
(State laws vary.)
7. If your MIL is trustee of the trust, she can sell the house if she is competent to conduct her financial affairs.