Q: My credit was damaged because of divorce, so my mother helped me buy my house by putting it in her name. I have lived here for 11 years and always paid the bills. I am concerned because she has dementia and her health is failing. Should I have her deed the house over to me? — Sally
A: In my experience, I have spoken with many people in your situation. From a legal perspective, this is not the right place to be for both you and your mother. Besides that obvious caution of not being upfront with your lender, she could be sued if someone gets hurt on your property or if you miss a few mortgage payments. Plus, you are paying for a home that you do not own.
While I understand that both you and your mother may agree that it’s your house and not hers, this is not the case for the rest of the world. When your mother dies, your siblings will have a claim to your home if she does not have an adequately prepared will or another planning tool. Even then, if she leaves behind creditors, they may have a claim against the equity in the house.
Usually, I would suggest that you buy your house from your mother by taking out a new mortgage loan and having her deed the house over to you. If this was not possible for credit reasons, planning documents, such as a living trust or lady bird deed, might do the trick.
You stated that your mother has dementia, and if she is no longer of sound mind she will not be able to sign any documents to assist with this process. If she has already planned her estate and granted someone her durable power of attorney, that person may be able to help. If not, you may be out of luck and have to deal with the consequences of poor planning.
I strongly suggest that you contact an experienced estate planning profession without delay to explore whatever remaining option you may have.
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