Borrowing against mother's home to pay for her care

Dear Len & Rosie,

My mother requires constant care. I have hired a round-the-clock geriatric care agency to look after her. It’s very expensive. I want to take a loan out against the house so mom can stay home, and not have to go to a nursing home. To do this I need to get the deed to the house which is entirely paid for. I can not get the deed out of the safe deposit box because its in Mom's name only; they said I need a court order plus the trust and power of attorney documents which I do have to get into the box. Can you get this court order by yourself if my mother’s physician certifies that she has dementia and is incapable of making decisions, or do I have to hire an elder law attorney? 

Dear Mark,

You do not need to concern yourself with the original deed to your mother’s home, so long as the deed was recorded by the County Recorder. Title companies handling escrow for home sales and loans rely solely on recorded deeds. The only reason you would need to get the original deed out of your mother’s safe deposit box is if it has not yet been recorded.

You ought to be able to get into the safe deposit box, if necessary, using your mother’s durable general power of attorney if the box is titled in her name alone. However, many banks do not honor perfectly valid durable general powers of attorney other than their own bank forms. As a general rule, if you want your children or other trusted family members or loved ones to have access to your bank accounts, you should take them to your bank and add them to your account signature cards. It’s easier than fighting a bank manager worried more about making “excessive” demands on the legal department than the needs of his or her clients.

If the safe deposit box is in your mother’s name as trustee of her trust, you will have to follow the procedures of the trust to remove your mother as trustee as a result of her incapacity. Most trusts require one or two physicians to certify that your mother is no longer able of making her own decisions or protecting herself from undue influence.

That’s not all there is to it. To borrow against your mother’s home, you may need her original durable general power of attorney, which will have to be recorded as part of the loan escrow. Also, if her home is held within a trust, she will have to be removed as trustee before you, as successor trustee, may borrow against the home or transfer the home out of the trust so that you can borrow against the home using your mother’s power of attorney.

Be flexible. Your mother may or may not qualify for a reverse mortgage, and if she can’t get one, she may not qualify for a traditional loan or home equity line of credit on her own credit record. It may be necessary to put a small percentage of the property into the names of her children to qualify her for the loan. Work with your family to find out from the lender what it needs for your mother to qualify for the loan. Then, if your path is not clear, review the situation with an elder law attorney.

Len & Rosie