A: Spouses have a special relationship to each other, and your father must have had some reason for taking himself off the title to your parents' home. While we don’t know the reason, we’ll have to just take it at face value that he had it in his mind that your mom would be better off owning the home in her own name without him.
Having said all that, your dad might still have an interest in the home if he was and still is married to your mother. The quitclaim deed might not have eliminated the interest he had as a spouse to his homestead. Again, we will leave that aside for the moment and address the question of what to do now.
Your mother owns the home in her name and has executed a TOD (transfer on death) instrument giving the home back to your dad. But there are some nagging issues that are not addressed with a TOD document, the primary one being what happens to the home while the owner is alive.
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We’re sorry that your mom has early stages of dementia, but if her faculties are good enough for legal purposes, this is the time to act. At some point in the future, your mom may not have the legal capacity to sign documents. So now is the time to make sure your mom has sought a power of attorney for health care, which is a document giving someone (usually a loved one) the ability to make medical decisions for her. She should also designate a power of attorney for financial matters. This document would allow a person to handle her financial affairs.
When it comes to the home, the title can stay in your mom's name or you could put the home in a living trust. Your mom would still own the home, but she or you or your dad could have the ability to sell the home. You would have to decide what your mom's wishes might be. If your parents live in the home and you need to sell it, the TOD won't help you. If you want to take out a reverse mortgage or take out a different loan, the TOD won't help you either.
The only thing the TOD document does for your mom is give the home to your dad upon her death. It doesn't guarantee the home to your dad. Your mom could still sell the home while she is living or cancel the TOD. That's why a living trust might be a better instrument for the ownership and management of the property.
In addition to having the documents we described above signed by your mom, you should also make sure that she has a current last will and testament that has been signed, witnessed and notarized.
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If your father is afraid of losing the home due to medical costs, his concern is real. If your mom will need care in the home or have to move to a facility to care for her, the home will count as an asset that might need to be sold to satisfy any bills to the facility or care provider. Medicaid kicks in once most assets of the patient have been depleted.
As you decide how to handle the home and have your mom sign some of the documents we've suggested, you might want to talk to an estate planner or elder health attorney to go over what your mother owns and what other options might work for her and your family.
This is a tough road you’re on, and time is of the essence.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.