Selling my Dad's house/proceeds needed tor nursing home/invest too?


W

William Prien

Hello,
I am in serious need of some financial advice.
My 86 yr old Father, who has Alzheimer's Disease was put in a nursing
home in January(my Mother is deceased). I was recently appointed by
the court, in TX, to be his legal guardian. For various reasons, he
had little in the way of cash assets when he went into the nursing
home.But he does own his home, valued at about $70,000. He has about
$1300 monthly income, from a small pension and Social Security. I have
had to spend all of his monthly income plus take out cash from his
bank account to pay for the nursing home, which is $2550 per month. He
will have enough cash to continue this until about November or
December. It was my plan to apply for Medicaid benefits for him at
that point, since I thought under the circumstances he would easily
qualify. When I was last down there I met with a case worker at
Medicaid. She said that my Dad was allowed to keep his house, free and
clear, whenever he got on Medicaid. I just needed to "spend down" his
cash assets to a certain point. That is where I am at now. However, I
recently discovered that the state of TX changed the Medicaid laws
governing ownership of a house while a person is on Medicaid.
(Tx was only one of 3 states that allowed full home ownership while on
Medicaid)
Now, when a person in a nursing home applies for Medicaid, a lien is
placed on the house, and that when the person dies, the state sells
the house to get reimbursed for the Medicaid benifits. Well, I am not
about to let the State of TX get their hands on his house at this
point. Since it will have to be sold for his care anyway, I am going
to sell it now. So here is my basic question-
What would be the smartest thing to do with the money from the sale of
the house? I will need it last as long as possible, but I want it to
be safe(mostly).
I will need access to some of it every month, but some could easily be
invested
or put in CD's or money market funds,etc. I'd like to maybe invest a
small bit in stocks. Any opinions, anyone???
Thanks in advance.
Private emails welcome!

William
(e-mail address removed)
 
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S

S. L. Richardson

Also...not that this is financial related...but it is terribly important:

But as a Texas lawyer who does some guardianship work be sure to talk to
your lawyer before you invest the money. There are some restrictions on
what a Guardian can invest in inside a Texas guardianship. You may, or may
not, be able to invest in certain investments that you would normally not
think would be objectionable. Under statutes just enacted by the Texas
legislature you will have to file an "investment plan" with the Court and
get court approval before investing. Just be sure to talk to the lawyer who
handled the guardianship before you invest anything. If you just invest
away without getting the necessary approval you could be exposing yourself
to a breach of your fiduciary duties as the guardian of the estate.

Good luck.

Jason Richardson
Attorney, CPA
Sherman, Texas

I am not your lawyer, nor your accountant, etc...
 
W

William Prien

Jason, thanks for the info.
I hadn't even thought of that. But one other question-will I need to
get the court's permission to sell the house? And when I do sell the
house, is an attorney needed to oversee the transaction? (I am a
Realtor myself in NY, and we use attorneys for real estate sales.
Apparently in TX most people do not.)
When I was granted guardianship in March, I was given virtually no
information about what I could or couldn't do with my Father's assets.
I was told only that I must file a yearly "accounting" of his assets.
I have called my attorney on this but he hasn't called me back yet. I
am supposed to be signing the real estate papers on Monday putting the
house on the market,so I am kind of desperate for answers at this
point. Thanks!

William
(e-mail address removed)
 
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S

S. L. Richardson

William,

Yes, to sale real estate out of a guardianship in Texas you need a court
order approving the sale. In fact, no title company down here would close
such a transaction without the court order being delivered at closing. You
wouldn't have "marketable", clear title without the Order. I wouldn't think
a real estate agent would even let you sign a listing agreement as you don't
have authority to enter into the contract just yet. However, this is
usually just a formality.

Technically you don't have to have an attorney, but there are 2-3 things you
have to file with the Court (an Application to Sale Real Property, an Order
approving the Application, then a 'Report of Sale' wherein you list the
details and an Order approving the Report of Sale', if my memory serves me)
to sale real estate out of a guardianship. If there is no one contesting
this sale, however, I'd just ask the lawyer how much it will cost to file
the required pleadings/paperwork. Depending on what county you're in, and
how formal the judge is, you may not even need a formal hearing and, I won't
lie, 95% of what is being filed is a form - a form your lawyer already has
on his computer I'm sure. He'll just need the details (legal description -
which he probably already has when he filed the Inventory, list price,
contract price, financing terms (I can't imagine a Texas judge allowing the
guardian to 'tote the note' but you get my drift as to the type of
information required, buyer's identity, etc.)).

So, in essence, I'd just get a quote from the guy who's done the
guardianship for you. It will probably be more worth your time in the end
to hire him again. Especially if you were happy with his/her services to
begin with.

As an aside, not only do you have to file an annual accounting with the
Court (income and expenses, reconciled to your beginning cash balances and
asset balances) you also are required to file an initial Inventory (list of
assets of the Ward) to which your annual accountings must reconcile back to
the beginning balances on the Inventory ("Joe had $3.10 on the Inventory
when this guardianship was created, then he had $1.00 of income in year 1 &
$0.80 of expenses in year 1, so he now has $3.30 of cash - as evidenced by a
copy of the reconciled bank statement attached as Exhibit A", for example,
for each account you have open). You also have to file an "annual statement
on condition of ward," which pretty much says "The Ward is safe, here's
where he lives, his health is good, Dr. X saw him 3 times last year, etc."
This can, and often is, in the form of a letter to the Court from you the
Guardian. However......where I'm going with all of this is in MOST cases
it's worth it to just get the same lawyer to handle all of this for you each
year, remind you when things are due, etc. At least let him do it all for
you the first time then you can get a handle on what all is required.

Long post, sorry. Just that guardianships in Texas can be a real...pain.
If you want to read more about it all the Guardianship laws are 'inside' the
Texas probate code, which you can probably find online at findlaw.com. Who
knows....the lawyer might even let his expenses ride until Closing, if
you/he/realtor expect a reasonably quick closing and no objections from
anyone or the Court as to the terms. Be VERY careful -- you are a fiduciary
and are always at risk for some heir of the Ward claiming you breached your
fiduciary duties as Guardian by not getting the best price, etc. Talk to
your lawyer about this also.

Sounds like you have a good lawyer who's helping you out and doing a good
job. I'd just give him/her a call and confirm all of this and let them know
what's going on.

Hope this helps....again, good luck.

Jason Richardson
Attorney, CPA
Sherman, Texas

I am not your lawyer, nor your accountant, and none of this is legal or
accounting advice and I'm just someone passing along information on a
newsgroup, etc. ad nauseum.
 

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