My brother, "Todd," the youngest sibling besides myself and my older brother, is the POA of our mother who was diagnosed with dementia 5 years ago. Todd suspected our mother was suffering early signs of dementia and was able to get an official diagnosis of dementia which resulted in having himself assigned her POA for her medical and financial decisions, which my brother and I supported. Since then, Todd decided it would be best for our mother to sell her home and move in with him. The plan was that the proceeds from the sale of the home would be put in savings for any future medical care. As the closing date approached, Todd was pursuing a VA loan to buy a new house for he and our mother to live in - again, we were all in support of this. I traveled there to help them move out of her house and into what was becoming their new home after the closing occurred. Months later, I learned from our mother (and verified by another relative) that instead of purchasing the new home with the planned VA loan, Todd used the proceeds of our mother's sold home to pay cash for the new home. Todd never shared this new development or update with my other brother and I - frankly, we were very concerned especially how shady it appeared. When we confronted Todd, his response was that at the last minute, our mother told him to not pay with the VA loan and to use her sale proceeds instead. We're talking almost $400,000. Our mother had already been diagnosed with dementia and I'm concerned she has been taken advantage of by Todd. In addition, if this was a "gift" from our mother, shouldn't there be a gift tax that Todd is required to pay the IRS? I don't believe this was ever reported. Since this time, Todd placed "his" house in a Trust to be willed to myself, my brother and my children should anything happen to her. This means that my brother and I will not have access to any inheritence (which is in the house) until my brother passes. I have grave concerns about how this was handled and in secrecy. What can I do? I feel my brother "stole" the money from our mother by allowing her fragile condition to be at his advantage - I don't believe she was 100% of sound mind when this was discussed, if she really did offer this to him.
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Not what you have been told it is or what you or your other brother think it is, but exactly how it reads in the Tax Assessor / Collector records and how it has been recorded at the courthouse.
Both assessor/ collector and land records at the courthouse can be found. Most places have these available for free for property tax info for last 3, maybe 5 years; land records tend to be a pretty cheap on-line download as document(s) attached onto the chain of all legal on the property via land records or chancery court records or some other department at the courthouse. Like there could be document #1 as 2019 WD $9.00; that’s the Warranty Deed filed in 2019. For a new property might be 3 filings. Personally I’d down load all the filings and pay the download fee so you can see exactly what went down. If it was bought with a Trust as owner, the Trust document might be attached….. if so yeah! as this is a lil goldmine of information. If no Trust document attached, it should state when Trust done, named Trustees and law firm that filed it. Also very useful information.
You can do this (document search on property) on moms old house as well…. If she & hubs owed it forever, and he died, the chain of documents may be 8-12 items. You might want to get these too to see exactly how exactly it got sold. If the documents go back more than a decade, well for those the courthouse ladies have to ferret out from filing cabinets and it could take 30 days to get.
You need to get these to determine what the title is for ownership and how it was recorded.
If it is in a Trust, I’d be wanting to know in detail what source(s) of income is either also in the Trust or is an outside guaranteed revenue source, that will “feed” the Trust $ to pay for all costs associated with assets the Trusts owns. If he set aside a chunk of $$ to the Trust to “feed”, that’s a smart move. You need to ask how Trust is set to run. Do you understand what I’m getting at?
As an aside on how house was bought, paying cash is usually a very good move. You can negotiate the price more seriously to get it reduced on cash only sale. If there are multiple offers but the others have to deal with a pesky bank, bank sign offs, walk thru, title search, all that takes t…I…m…e & while under contract. Cash sale moves to the front of the line & with a bow on it. Also if your mom is quite old, she may not have been able to qualify for a mortgage…. She’s too old for risk. I don’t know abt VA but for most mortgages if your over 70-75 you can’t get a normal 20-30 mortgage as your actuarial tables dead before it’s closed out. Mortgage co will want it to go conventional rates & with a hefty 20-35% downpayment if they’ll run one at all. These could be why a Todd & mom did cash.
How long has your brother been caring for mom in his/her house?
I ask, because caring for a demented parent is no easy task and many believe that the caregiving adult should be paid for the care given. I am one of them.
This doesn't make his actions okay. It should have been handled differently.
Your mom could have been cognizant at the time she gave him the money. If a court of law hadn't declared her incompetent then she had the right to spend her money this way.
However, what is the plan in the event she can not age out in YB home? He will have to pay, because none of you can expect the taxpayers to foot the bill.
If she needs LTC he may be forced to sell the house and give her money back so she can pay for her care. If she lives long enough there won't be an inheritance to worry about.
If you really believe that your brother is financially exploiting your mom and isn't taking care of her, then you should file a complaint with APS. I would only do this if he isn't taking care of her though, because he is bearing a huge burden by being her caregiver and that is worth a load of money.
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