Dementia Parent's Property Sold to Family Member

[pugfury]

What is the name of your state (only U.S. law)? CA

My mother-in-law (MIL) signed a POA in 2005 so my sister-in-law (SIL) could sell two pieces of property MIL owned in New Mexico in order to have funds available for her care as she is now in a full time care facility for Alzheimers/Dementia patients. Neither property has been sold or put up for sale as of this date. Property One (P1) was co-owned. Husband of SIL is now listed as co-owner of P1 with MIL. Does this constitute Elder Abuse under CA law where the POA was executed? My interpretation of the POA is that the attorney-in-fact (AIF) can not enrich themselves by co-mingling properties. Even though AIF did not herself purchase P1, her husband did. Would that make the 1/2 interest in P1 community property within the marriage thus enriching AIF?

Property 2 (P2) has had SIL's husband's name added to the title for an unknown reason. This would then make SIL a part owner by community property laws thus enriching SIL. Would this constitute elder abuse?

The POA does not give the AIF permission to sell the property to herself even if full and proper consideration are paid to MIL for the property.

SIL has also made her daughter the beneficiary of the properties if MIL should die before sale.

SIL also has separate POA over MIL for her care, in addition to financial POA. Is there any way to have these POA's revoked even though MIL is no longer of sound mind?

Any advice would be greatly appreciated.

 

[tranquility]

There is not a "co-mingling" of properties. The Probate code demands the principal's property is to be kept separate and distinct from other property in a manner to adequately identify the property to belong to the principal. With real property, there is title. (sec 4233)

Under the acts requiring express authorization provision of sec 4264, I don't see selling property for value needing authorization. Especially when the specific POA is designed to sell property, I don't think it is going to be a problem. While the community property argument is interesting, you don't even know if it IS community property. But, it would usually be a fiduciary breach to benefit oneself. If the amount was less than FMV, there could be an argument.

Of more interest is if the POA was written in a manner to become durable if the principal became incapacitated or if there was not capacity at the time of the making.

If the principal is incapacitated, the only way to "revoke" the POA is through the courts. Absent proof of a fiduciary breach, the court is unlikely to remove a POA. The only breach I could see is the changing of the beneficiary in case the principal dies. That is not allowed unless there is express authorization in the instrument under 4264(e).

Even then, this is going to get hard fast. If you really think there is skullduggery, get an attorney. If you are fishing for a do-it-yourself project, I don't think so.

 

[pugfury]

Thanks so much for your quick reply. It's much appreciated.

I have a few things that may add some clarification:

1.) I don't know for sure whether either piece of property was sold to the husband, his name just showed up on an assessment search of the properties.

2.) Both POA's were signed by MIL after she was diagnosed with Alzheimer's. The first, giving durable POA specifically over real estate transactions to sell MIL's property, was signed when MIL was 69 years old. It is stated in the POA that it will continue in force after incapacity. The second, which covers care and finances was signed sometime after, we don't have a date for that.

How does a family member get control over care and finances of an incapacitated parent when the children of the parent don't agree upon who will care for the parent? Can a POA be legally in effect if one sibling gets the incapacitated parent to sign?

We don't have funds for an attorney at this time. Since MIL was past age 65, wouldn't this be a financial elder abuse case?

Your time in this matter is very much appreciated.

 

[ecmst12]

I am pretty sure that you can't have a beneficiary of real property like you could on an insurance policy or a bank account. You can have joint tenancy with right of survivorship, but only with someone else also on the title. If your kids want to inherit your house, they will have to go through probate first.

If you think that MIL is being exploited, you can certainly report it to elder protective services.

If your wife thinks her mother is not being properly protected by her POA, she can file for guardianship with the courts. She will need a lawyer and evidence. Who is paying for her care now?

Just because she was diagnosed with Alzheimer's prior to signing the documents does NOT mean that she was not of sound mind when she signed them. Most likely, she was.

 

[tranquility]

Again, I don't see the abuse here from what is known. MIL can give a POA to whoever she chooses.

 

[Ohiogal]

I am pretty sure that you can't have a beneficiary of real property like you could on an insurance policy or a bank account. You can have joint tenancy with right of survivorship, but only with someone else also on the title. If your kids want to inherit your house, they will have to go through probate first.
If you think that MIL is being exploited, you can certainly report it to elder protective services.

If your wife thinks her mother is not being properly protected by her POA, she can file for guardianship with the courts. She will need a lawyer and evidence. Who is paying for her care now?

Just because she was diagnosed with Alzheimer's prior to signing the documents does NOT mean that she was not of sound mind when she signed them. Most likely, she was.

Not necessarily true -- the bolded, that is. There are transfer on death deeds that would allow the "kids" to be named as "beneficiaries" of the house. That would NOT require probate.

 

[anteater]

I am pretty sure that you can't have a beneficiary of real property like you could on an insurance policy or a bank account.

New Mexico is one of the 12 - 15 states (tough to keep track) that provides for beneficiary/transfer on death deeds.

tranquility
Again, I don't see the abuse here from what is known. MIL can give a POA to whoever she chooses.

If I am understanding the OP correctly, the agent is using the power to make the agent's husband a co-owner with right of survivorship of the New Mexico properties.

 

[tranquility]

If I am understanding the OP correctly, the agent is using the power to make the agent's husband a co-owner with right of survivorship of the New Mexico properties.

Maybe. There may have been a purchase for value, the OP may be wrong in there being a transfer at all, the OP may be wrong in the beneficial portion. But, if your understanding is correct, I believe there would be a breach.

The only breach I could see is the changing of the beneficiary in case the principal dies. That is not allowed unless there is express authorization in the instrument under 4264(e).