Can I make a property transfer as POA?

A fellow caregiver asked...

I have power of attorney (POA) for my widowed mother-in-law who is in the advanced stages of dementia. She does not qualify for Medicaid but does not have the money for nursing home, 24 hour care, etc. The home in which she lives is in my husband's name. It was once in her name. We want to get a reverse mortgage on the house to pay for her medical bills and care. Being her POA can I transfer the house back into her name without her being present? She is incompetent.

Expert Answer

Barbara Repa, a senior editor, is an attorney, a journalist specializing in aging issues, and the author of Your Rights in the Workplace (Nolo), now in its 10th edition.

Reverse mortgages are rarely a good option if a homeowner is likely to enter a nursing home in the near future—or anytime within three years or so, so that may not be your best route.

If the borrower moves into a nursing facility permanently, the loan from a reverse mortgage must be repaid within a short time — usually a year or so. And if the home is sold, as is often the case when a homeowner makes such a move, the loan must be repaid out of the proceeds.

There are some additional potential drawbacks. Reverse mortgages are expensive to secure, usually involving high costs for processing, insurance, interest, and ongoing services that are added to the overall loan costs. Also, if the borrower leaves the home to family members or other beneficiaries, it will be encumbered with the reverse mortgage debt if it’s not paid off before death. Finally, equity borrowed as a lump sum or line of credit may be counted as an asset that affects eligibility for Medicaid.

For more information on reverse mortgages, contact Housing and Urban Development's Homeownership Center .

For basic information about other options for paying for long-term care, see Consumer Information About Long-Term Care .