### Legally Transferring Property Ownership When a Family Member is Affected by Dementia
When a family member is diagnosed with dementia, it can be challenging to manage their affairs, including property ownership. Ensuring that their property is transferred smoothly and legally is crucial to avoid disputes and protect their interests. Here’s a step-by-step guide on how to legally transfer property ownership when a family member is affected by dementia.
#### 1. **Create a Durable Power of Attorney (DPOA)**
A DPOA allows you to appoint someone, known as the Agent or Attorney-in-Fact, to handle financial matters on behalf of the person with dementia. This document remains effective even if the person becomes incapacitated. It’s essential to make sure the DPOA is broad enough to cover all potential financial needs but not so broad that it grants unnecessary authority. For example, the document should explicitly authorize the Agent to manage retirement accounts and other financial assets.
#### 2. **Set Up a Trust**
A trust can provide a more comprehensive plan for managing the person’s property and assets. A revocable living trust allows the person with dementia to maintain control over their property while they are still capable, and it can be managed by a trusted individual or trustee after they become incapacitated. This type of trust avoids the need for probate, which can be time-consuming and costly.
#### 3. **Use a Disability Panel**
A Disability Panel is a modern approach to determining incapacity. This panel allows family members or trusted individuals to determine when a trustee lacks capacity and should step down. This keeps the process private and family-oriented, making it less adversarial and more respectful of the incapacitated person’s dignity.
#### 4. **Advance Healthcare Directive**
An Advance Healthcare Directive (AHCD) empowers a trusted person to make medical decisions for the person with dementia when they are unable to do so. This document includes instructions about end-of-life care, organ donation, and other critical healthcare decisions. It’s essential to have a customized AHCD that suits the unique situation and specific wishes of the person.
#### 5. **Protecting the Home from Medicaid Estate Recovery**
If the person with dementia requires long-term care and receives Medicaid, their home may be at risk of being sold to cover the costs of their care after they pass away. However, there are exemptions that can protect the home. The Child Caregiver Exemption allows an adult child to transfer ownership of the home if they have lived in it for at least two years and provided care that helped the parent remain in the home. The Sibling Exemption also protects the home if a sibling has an equity interest in the home and has lived there for at least one year.
#### 6. **Challenging the Right of Survivorship**
If a joint tenancy with the right of survivorship is involved, it can be challenged under certain circumstances. For example, if the deed lacks clear language indicating the right of survivorship, it could be contested, and the property might instead be treated as tenants in common. Claims of undue influence, especially involving vulnerable individuals like the elderly, are a common basis for challenges. If one co-owner was pressured or misled into creating a joint tenancy with the right of survivorship, a court may set it aside.
### Conclusion
Transferring property ownership when a family member is affected by dementia requires careful planning and legal guidance. By creating a DPOA, setting up a trust, using a Disability Panel, and ensuring an Advance Healthcare Directive, you can protect their interests and manage their affairs smoothly. Additionally, understanding exemptions like the Child Caregiver and Sibling Exemptions can help safeguard their home from Medicaid Estate Recovery. If a joint tenancy with the right of survivorship is involved, it’s crucial to be aware of the potential grounds for challenging it. Consulting with an experienced real estate attorney is essential to navigate these complex legal issues effectively.
