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What Happens to the House? · Aging Parent TrapX

• speaker-0: I was just living my life and next thing I know, everything is turned upside down. If you're a GenXer, you are probably having some of the same conversations that we are talking about on this channel. I'm Allison Newell and I'm a real estate broker in the greater Tampa area. And I'm here with my two friends and colleagues, Julie Cook from Generational Transitions and Nikki Flynn from Elite Preparation Services. And today we're talking about what do we do with mom and dad's house? What do they do with their house when they can no longer live in it? We were talking last week about once we figure out that mom and dad are no longer safe to live in the house anymore, that we gotta figure out what we're gonna do with the house. And so I wanted to share some of my personal story. Everybody's story is gonna be different on this because it really depends. largely on your financial situation, maybe how many people are involved in the decision-making process. Did mom and dad already pick out a place to live and already know that they want to use funds from the sale of a house or pay for the new facility that they're going to live in? Or maybe they're going to move in with you. So there's so many different things that come into play and determine how fast you have to act. So what I find though, even though I am in the real estate business, when I had to ⁓ deal with this with my own mom, became, it was almost paralyzing because you can't just, it's happening at the same time, right guys? It's all happening at the same time. You know, you've got to make sure mom and dad are safe. Cause like in my case, she went to a hospital and then never came back to live in the house. But then she couldn't live in the hospital. She had to go to an assisted living facility. So all of that was running behind the scenes. And then I was charged with emptying out the house and then deciding what to do with the house, kind of running parallel those decisions, you know, all at the same time, trying to figure it out. And it can become very overwhelming. And it did become overwhelming for me because when you have a house full of, you know, for 40 years worth of, well, a lifetime worth of stuff. right? A lifetime of stuff in a house. What are you going to do with it? It can't all go to the 500 square foot studio that my mom now lives in. And so I had to take some time to figure it out. And you can't just go slap in a for sale sign in the yard. Now, when I deal with this with my own clients, it's a much easier process for me because I'm able to ⁓ not be in the emotion of it. I have empathy for what's going on, but I can see a clear path from A to B. You know, I can see that, but when you're doing it yourself, when you're in it, it's all very overwhelming. Did you guys ever move anybody? I mean, you moved somebody from across the country to get her house. speaker-1: Yeah, yes. So from their house to moving in with us, yes. right now, I mean, now see, the game plan is for them to relocate into their own home soon. their stuff is in storage right now. Yeah, but when my dad passed, that was, I had to go through your situation. speaker-0: Okay, but- So, but you help them pack up their stuff or how to move or help them pack up. speaker-1: Shipped, did pods shipped across the country. Yep. Realized just how much stuff one individual can accumulate. speaker-0: It's true. ⁓ It is true. Well, with, so once I got my mom settled and she didn't, she lived about an hour and a half from me, right? And the drive ⁓ wasn't too bad, just a lot of traffic, an hour and a half there, an hour and a half back. So that's three hours out of the day, period, right? Anytime I would go down and then not knowing where to start, I guess. ⁓ For me, what I did was, is she going to need in her new place? Right? And so I worked on that first. And because there was no point in asking anybody to help, an estate sale person to come help at that point, because I didn't know what we needed to get rid of yet. I just needed to find out what she wanted. And we did make one pass through one time with her. My daughter helped me and we brought her back. just for a very brief time before she went to her new place, ⁓ go through a couple of things and pick out some clothes and stuff like that. But I had to physically touch everything after that. So after I got the stuff from the home that she was going to use to her new facility, or I say facility, that's so cold, her condo, it's really assistant living facility, ⁓ and got that set up for her, then I could start to. whittle away and you know, people keep things in their homes that maybe have sentimental value, right? So the photo, there's always furniture that could be basically just junk. mean, it looks nice, but nobody wants it. And when you call those places like Habitat for Humanity and things like that, I mean, like literally they came and they're like, we'll take this, this and this, but not that. So then I had to go, okay. and the Facebook marketplace stuff. I mean, that's good for a one-off thing from time to time, but people, I think people go on there just to mess with other people, because they'll say that they want something and then they don't show up. Have you guys ever had that happen? It's insane. And also I was there by myself. And so I didn't want some stranger person coming in to look at a big piece of furniture that I couldn't put outside, because I physically couldn't do it. So. just was months and months of going back and forth when I had time to go through this stuff. So I highly recommend one of the things that you do. Now I was, by the way, everyone, I'm an only child. So I didn't have, I don't have siblings that I grew up with. I have some half siblings, but they did not grow up in my household with. my parents and they don't have any relationship really to speak of with my mom. And so they're not involved in any decision making, any helping, nothing. They're not bad people. It's just, that's just the nature of the relationship. Right. And so I'm doing it all by myself at the time. And I wish that I would have hired an estate salesperson to get rid of a lot of the stuff. Cause we made trip after trip after trip. to the goodwill, I threw out things that, or I donated things that I don't know, I feel guilty about that I did that with. And we didn't get any money for anything at all. And we probably wouldn't have gotten much in an estate sale, but they, as I understand it, they come in and Julie, you can probably speak to this a little bit. They come in, they take inventory stuff, they set it up, they have like a sale and then they get rid of everything at the end of it, right? Is that how? speaker-2: Yeah, so the times we don't personally do estate sales, but the times that I've worked with that, they do. They come in, they set up everything, they do the sale, which is great, takes a lot of pressure off the family, but then they take a percentage of that too. So I don't know that you make a whole lot off of it, but it does take a lot of the work out of it. One thing too that I wanted to mention, I love that your mom had the chance to come home and pick out some stuff she wanted. When folks go to any type of senior living community, Most of the time the apartment is unfurnished and they encourage you to bring personal belongings to make it feel like home. So photos, pick out the most cherished furniture because you're going into smaller space. We had at times, we would have people go through and put Post-it notes on, this is important, I want to take this. And again, we talked last week about empowering. I think that's one of those things where, okay, if I have to make this move, at least let me pick out. clothes I want to bring, the furniture I want to bring, and those family portraits that are so important to me, I want to make sure those come too. Again, that kind of helps make it feel like home and it gives them the power to say, this is the stuff I want to have with me. speaker-0: Yeah, I will say that that's one of the things that was really hard. It was hard for me, but I know it was hard for her. And I still hear about it today. Like she'll just out of blue, ask me where the such and such is. And it's been two years and it was a old metal filing cabinet, like the old style metal filing cabinets. And the stuff in it was papers from a long, time ago, like I don't know what the obsession with keeping a lot of these papers were, but I did. I looked at every single thing and I got rid of a lot, but I didn't get rid of photos or anything like that. But the file cabinet, I don't have a place for that. People do digital storage now, right? Not file cabinets storage. So there's not really, you can go anywhere and you'll find those a dime a dozen if you want it to find a metal storage cabinet. anyways, she asked me about it like it was a a piece of gold, you know, and she goes, well, we could have got some money for that, Allison, you know, and, I know part of it is just frustration because she wasn't part of that process, but people, I was talking to you guys earlier, I'm trying to remember some of these things that grind my gears and this sounds hard, but there's guilt for what I had to get rid of and stuff. I don't want it to be a pile on to me for it or you or anybody else doing this. So yes, if you can do the sticky notes, they can be involved in advance. Sometimes situation is they end up in the hospital and everything moves really fast and they don't come back. And so this is why you should try and do these things ahead. But if you can't, just try and remember when you get to that age that your kids later, like my kids, I don't wanna make them feel bad for having to make decisions like I feel bad for making decisions. I had to empty out that house because now, We're really talking about what we're gonna do with the house, right? But you gotta get rid of all the stuff in the house before you can really either rent it out or sell it essentially, or maybe a family member moves into it. For me and my decision, I decided to rent out the house and to offset her living expenses. My mom has a very, very modest savings. I'm very concerned that if we tap into that, it will be gone in a heartbeat paying for her care. I cannot care for her. I'm not equipped to care for her. My house has stairs. My house is not safe for her. You know, like I, I can't mentally or physically do that. That would not be, that's not a viable option. She has to be somewhere where someone takes care of her. So we have to figure out how to pay for it. Luckily she has long-term care policy, you know, so if your parents have that, that's a blessing, but the rent could offset the expense. If I sold the house. And this is what was going through my real estate mind. If I sell the house, okay. It's not a fancy house. Maybe I get like 300, 350 for it. It's just a very modest house, concrete block, old Florida house. How long would it take her to run out of that if she lives another 10 years? It would go in maybe four years. Like she would run out of that money pretty quickly. So renting out the property to offset with the long-term care policy that initially covered. the entire amount of her stay. But now the rent has been increased for the last two years that she's been there. And so now she's using some of her social security income and some interest from like a CD or something that she gets once in a while or something. So we're able to manage it, but that long-term care policy is going to run out in another two years. And the tenants that I got into the house, by the way, that's a whole, again, Being in real estate, think that's easy. I don't do property management. And so you can do it on your own, which I do not recommend, or you can hire a company that will manage the property for you. That's going to cost you money. But I got lucky because a neighbor's adult daughter and her husband said, ⁓ we want to move in to your mom's house. Would that be okay? I said, great. And they paid the rent on time. They kept the house pretty nice. and but they're moving out. So now I have to now get a new tenant and that's going to happen at the end of May and I'm not sure what I'm going to do because lightning doesn't strike twice, right? Like am I going to get a good tenant like that that I can trust or am I going to get someone that's going to come in there, take occupancy and then not pay the rent on time if I'm managing it from an hour and a half distance. So I'm looking into hiring a property manager down there and they take your first month's rent and then 10 % of every month's rent going forward. That's going to dip into the amount that covers for my mom's stuff. Now I'm still not ready to sell and especially not in this market because right now the real estate market is tough and she wouldn't get highest and best dollar right now. So those are decisions that I've had to make and I'm comfortable. that I've made the right decision, but I help people when they tell me what's going on in their situation, because again, maybe your parents have more money set aside for this. Maybe they have a nice pension. Maybe they don't have to worry about paying the assisted living facility. But then there's the other thing, and I know, Nikki, you know about, which is kind of a scary thing, where when you really don't have any resources and the government has to take your house, basically, to pay for care. speaker-1: Yeah, that's like what Julie was talking about was basically the Medicaid part of it, the long-term care Medicaid side. Anytime that the federal government needs to step in, it's not going to be without cost. And I think there's a misconception out there when it comes to people having an understanding of what it actually means for the state to step in. Sometimes facilities and hospitals are a little bit too eager to quickly qualify somebody for Medicaid. just because they're purely lazy and not wanting to look at additional avenues or resources or to even find out the correct information about the client. So when we are talking about being able to have Medicaid step in, the families really need to understand that if this was the family home that you were hoping to pass down generation to generation, that is not going to happen when Medicaid steps in. And people need to understand also like the government. Everything has a cost and it comes down on us as taxpayers as well. That's why our taxes keep going up because when Medicaid steps in, even though it's state funded, it's still something that they need to recoup the cost on because there are people out there that are in need, that are published, that don't have any money to their name. Okay, then yes, by all means, Medicaid really does need to step in and help them. But if you have a home and you have savings and you have all these other avenues and now you want Medicaid to step in. That's not fair to the people that are actually having to pay into these things. So what they will do is Medicaid will come in and they'll help. And then when that time comes and you pass away, they put a lien on the property. And that lien is from the federal government that says at the passing of this person, the sale of this house is to pay back the money that we put forward to care for this set individual. So sometimes it's a fraction of what the house is worth. Sometimes it's the whole amount of what the house is worth. Depends on how much care they're providing and how much they're stepping in. So people really have to have an understanding of what that means when they think, ⁓ Medicaid's going to step in. ⁓ my mom qualified for Medicaid, so it's OK. No, it's not. speaker-0: If mom leaves the house to go stay somewhere and uses Medicaid, they're going to sell that house right then, no? speaker-1: Yeah, if they, so if mom has to go into a facility, then the family has the option to sell the house. If they don't sell the house and they keep the house, when mom passes, that lien gets applied to the property. While mom is alive, the letter gets sent when mom passes that says, you owe us X amount of dollars. speaker-0: I've had clients that I got the call, we have to sell the house because the only way this facility will accept us is if we relinquish all of our assets. speaker-1: So they're doing their due diligence. Not a lot of places will. They'll just get them qualified, especially if there's a surviving spouse. If there's a surviving spouse that's living in the home, you can't sell the house. Like there's still somebody living in it. So if it's just a single parent, then yes, then they will advise. You need to spend down everything. That's initially how things are supposed to work. They will do a ⁓ five-year look back. So they'll look at all of your assets and see what you've had in the past five years. If they notice that you have an IRA, a 401k, CDs, a pension, any type of retirement accounts, they're going to say, no, no, no, you have to spend that down before we step in and help you. But if it's anything past that five years, and they really have gone through like what you were talking about, if your mom goes through all of her savings, if she's gone through all of that, then they're going to say, okay, you honestly have nothing left, we will go ahead and step in and assist. And then you can go ahead and keep that house and rent it out and use it as residual income. But when she passes, then that means that that house now becomes a lean property and we now want our money recouped. So that's the difference between those. Some places don't do the due diligence and do the look back and see what assets they have and tell them to spend it down. Or if there is a spouse still living in the house, they're not going to make a move out. they'll wait. They'll put the lien on the property. They'll wait till that person has passed. And then they're going to say, okay, now the house needs to be sold. We need our money recouped. speaker-2: One thing to think about with that too, Nikki, is there are communities, senior living communities, that accept Medicaid and will do that, will allow a senior to spend down and then qualify for Medicaid. The benefit to that is they don't have to move. If a senior moves into a community planning to pay from the sale of their home, from the rent of the home, that's fantastic. But if you run out of money, then you're going to have to qualify for Medicaid and move. So one thing to consider is does the community accept Medicaid or if they don't accept it right off the bat, if someone lives there, will they grandfather in people who have lived there and who need to switch over to Medicaid? Just something to consider. speaker-0: When I had to jump in and decide what it was that my mom was going to, what we were going to do with my mom's house, we had to very quickly get some paperwork done. And we talk about this in other videos that I will pop one of the videos up here. I think it was about the power of attorney. did have, I think I did have, actually I did not have any power of attorney. I just was in the will. So there was a will, but no power of attorney. And it certainly wasn't listed on the property at this point. So we had documents drawn up very quickly and I was able to, with authority, go ahead and rent out the house and all of that kind of stuff. Although that didn't happen for months later, I did get the documents done very quickly because I didn't know what was going to happen. And we're not saying that you shouldn't speak to a financial advisor or an attorney. We're not saying that at all. That, you know, that we are not tax ⁓ people. We are not attorneys. We're just expressing our own experiences and then what we do for, you know, to make a living, to put food on our tables, you know, helping people find a senior living facilities, helping people come up with the entire basically a state planning packet of documents all in one place. So it's easy for everybody or just figuring out what to do with the house, because maybe you're watching this and you're on the other side of the state, but you don't know who to call over there. We might have contacts. because we've been in this business for a while, so we know people, but Nikki can do stuff statewide. Julie probably has contacts of people different places in Florida, and I most certainly do. know realtors all over the state. I read an article about somebody who said, I'm gonna keep my house for my retirement, but I want it to move into something else, right? So they moved into something else, and they kept their little house. ⁓ in what was Largo is where it was. That's in Pinellas County, ⁓ in the Tampa area. And she did short-term rentals. She did the Airbnb stuff and was making, you know, pretty good money, probably equivalent to having monthly rentals. I'm sorry. The income was probably equivalent, but the expenses and the damages that were happening at all, that people were throwing out linens and they were stealing stuff. They've. had a party, damaged the property. So she thought it was doing pretty good when in reality she was losing money and then ended up doing an annual rental. don't be fooled by these, you know, programs that you see on TV or these TikTok videos that, you know, show that people are making hand over fist money. It is work to manage a property like that. And when you have tenants coming in on a weekly basis, I mean, what are their intentions? that's the asset. I have to protect that asset for my mom. I would not be a good steward of her money if I didn't manage that well. And I'm trying like heck to keep it in the condition. If we have to sell it to pay for her care, it's worth as much as we can get for it in that time. speaker-1: Well, I don't think any of this is easy. And that's the part where, you know, we're trying to help people be prepared for that because there is no easy way to go about any of this conversation. And we're out here trying to explain our stories to help people navigate when that can come up and so that way they know if they're ever in this situation. There is no how to. And even in my estate planning that I do, I try to give all of the clients as much information as I possibly can, but it's every single situation is going to be different. So it's all about, it's just about, you know, what you can do and that proper time. But if you have multiple siblings and there's going to be infighting and it just makes things more complicated. What it boils down to is what is the best decision for the parents? of story, full stop. Nobody else needs to be bickering about, want this and no, mean, that's where we minimize that with doing proper estate planning because then once those documents are in place, but we need to. speaker-0: buffer. We act like a buffer as well for those situations because while it was hard for me doing it personally, and I didn't have infighting, you know, it was just the physical having to be there and have to do it myself and make the decisions. I didn't have infighting. But when I'm working with somebody else, I can be that buffer between the two brothers and the sister that's up in New Jersey or whatever, you know, it's sometimes easier to talk to a stranger that's becomes a client and a friend than it is to your siblings because of whatever life experiences you've had together. speaker-1: And you're neutral. They gravitate to somebody who's going through the same experience. And that's ultimately why we're doing this. Because when I lost my father, it happened to me, me two of my other close best friends, all within six months, all three of us lost our dads simultaneously. We were the support system for each other. We were the sounding board because nobody can fully understand what I was going through. speaker-0: A new party. ⁓ speaker-1: except for them. And that's kind of what we're doing right now is we're trying to help people understand like, we hear you, we understand what you're going through. My other friends might not get it, but we do. And we're just trying to be here to help because each one of us offer a different scenario and a different outlook on things coming from different perspectives. But ultimately, it's going to be a hard road. Nobody should be coding this. It's not all rainbows and unicorns. We can just try to make it as easy of a process as possible. speaker-0: That's true. And I will say that renting out, have to, I'm not sure if I shared this story with you and I'm going to make it very, very quick, but like you really do have, you don't have to allow pets in your rental if you decide to rent out. You don't have to allow pets. However, I'm a dog person. understand people, more people have dogs than kids. think it is like versus dogs. They are their kids, right? You have to at least consider it, but also. speaker-1: No. Their dogs are their kids. speaker-0: For some reason, renters withhold information from their landlords. And I was doing the walkthrough with these tenants before they took possession of the home. So they were there and they had a little girl with them. She probably was in about, well, I'll say maybe fourth grade or so. And she was the husband's daughter from his previous relationship. And that's important to this because So we're there, they have two dogs that are gonna be on the lease. It's not a problem. And I say, as we're walking through, I say to the little girl, I say, isn't it exciting? You get to have a yard for your dogs. And she says, yes, and my rat too. My dad, at that moment, her parents went like this, and I went like this, and she realized, you know what? I just, I just. I mean, if she could have said, ⁓ S H I T, she would be young to say it. like, it just, everything frozen time for a second. And I said, a rat? And he go, and the dad goes, yeah, I was going to talk to you about that. my, ⁓ well, she has a rat, it's a pet rat and she's going to go live with her mother. She's just going to be with us for three weeks. And then she's going to Georgia to live with her mother. Now they're supposed to move in, in like three days. speaker-2: Huh. speaker-0: So I'm like, all right, you know, let me think about this. I don't know what, like, I just, it never would have occurred to me that somebody would have a pet. Never. speaker-1: Never. I would take a rat over a- speaker-0: And we've talked about the pet deposit and we, and you know why? Cause it's not something people want in their house. I have an old house. I've had rats in my old house before and to get rid of them is terrible. Like it's terrible. And I can't even believe I just said that I had rats, but I did have rats in my, in my attic and it's, know, I don't want a rat in that house. And I, I said, okay. But after, you know, when she leaves, goes with her. Now I don't know, did the rat come back? Has she come to visit back with the rat? I don't know, but you know what I know? I had to put it out of my head. I had to get them in that house and I never ever told my mom about it because she would have had a damn heart attack. And so anyways, be prepared because you're going to get lied to. And that's why, you know, when we say neutral party helping you, I needed a neutral party helping in that situation. Perhaps the property manager would have been nice because they would have asked me about it. And I probably would have said, well, what's my alternative? have them move in in three days or wait for however long to get somebody else through the approval process and into the house while I need that money to offset my mom's living expenses. speaker-2: Bring a kid along with you when you interview a tenant and they'll tell you everything. Problem solved. I know. speaker-0: Not easy things but that's but that's you know, that's what we're here for our information is in the description below if you want to reach out to us ask us any questions and don't forget to subscribe