Removing mom from mortgage
UPDATED: Oct 1, 2022
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Removing mom from mortgage
Mom has dementia and I am her POA. I did a legal process with her tenant and she
now holds the mortgage in name only via me as her POA until it is paid off over
the next several years. It is now an asset but now she needs nursing home level
of care from assisted living and private pay is too high. I’m trying to get her
Medicaid but the home as her asset will make her ineligible, most likely. As her
POA, can I legally have her name removed from the mortgage and just have my name
in place of hers? Thank you for any knowledge you can provide
Asked on January 11, 2019 under Real Estate Law, New York
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 3 years ago | Contributor
First, removing her from the mortgage does not remove her as owner of the property, so it will remain an asset of hers if she is on the deed/title. You need to take her off the deed to eliminate the house as an asset. The mortgage alone is a debt, not an asset.
Second, you can't transfer the property to you (take her off deed/title) unless you pay her the fair market value, which money will then have to be used for her nursing home care. The law does not let families hide assets or make the taxpayers pay for someone's care by transferring real estate or another asset from one family member or another (or to a friend, trust, LLC, etc.) unless the property owner is paid the full, fair value for it. If not paid fair market value, the state can undo or void the transaction and take the house to pay for her care. So either you need to buy it from her or you need to sell it to some third party.
The problem you face is that under the law, the state can "look back" up to 5 years to invalidate below-market value transactions; to transfer this property to, for example, you without paying market value for it, you would have had to do so more than 5 years beforee she needed Medicaid.
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