Learning that a parent or spouse has dementia can leave you reeling. Even if the symptoms are mild — Mom’s been losing her purse more often and missed some appointments — you know the day is coming when she won’t be able to manage her affairs or live on her own. As you contemplate her future and the cost of care, you wonder if a person with dementia can sell their home.
The answer is yes. But it’s essential to understand the complex legal issues related to an individual with dementia’s rights, as well as what you can do to help them sell their house. With expert advice, we created this guide to help you to navigate this often-difficult journey.
Dealing with a dementia diagnosis
Triggered by abnormalities in the brain, dementia is an umbrella term that covers a variety of medical conditions. Alzheimer’s is responsible for 60% to 80% of dementia cases, according to Alzheimers.org.
A dementia diagnosis doesn’t strip away a person’s power to make their own choices. This is true even for major financial transactions, like selling a house.
“Simply being diagnosed with dementia doesn’t mean someone lacks the capacity to sell their home,” explains attorney Letha Sgritta-McDowell, shareholder of Hook Law Center and president of the National Academy of Elder Law Attorneys (NAELA). “They still have the same rights as everyone else — that’s really important to remember. They have the right to find a Realtor®, list their house, and go to closing.”
Be a strong ally
While you can’t sign sales documents for someone with dementia, you can help them avoid costly mistakes. For example, you can help review contracts to make sure everything is in order. You can be with them when they meet with a real estate agent.
“The diagnosed person is still in charge, but a loved one can guide them,” says McDowell.
You can also help them find a real estate agent experienced in working with seniors. Look for someone who’s a designated Seniors Real Estate Specialist (SRES), like Susan Fixsen, a top-producing agent based in Hollister, California.
“Any kind of extra knowledge or education around senior life transitions, and how to successfully communicate with them, is important,” says Fixsen.
Designated SRES’s also have access to articles and other resources on a variety of topics pertaining to seniors in transition, including information on new forms and changes to laws pertaining to those with dementia. If you need assistance in finding a real estate agent with the right experience, HomeLight would be happy to introduce you to some qualified candidates.
What to do when dementia turns into incapacitation
Picture the following scenario: Your dad has lived with dementia for a couple of years without significant problems. But he’s recently taken a turn for the worse. He gets lost whenever he leaves his house. He doesn’t always recognize you or other family members. He says things that don’t make sense. If he’s too impaired to sell his home, can you do it for him?
“Determining whether a person has capacity is always a legal matter,” says McDowell. “It’s not for a lay person to say. That being said, the court often looks to medical information to determine if someone has capacity. The court process and how you define incapacity varies wildly between different states.”
Know your Power of Attorney (POA) status
Power of Attorney gives a family member, lawyer, or other person designated by an individual with dementia the right to make financial decisions for them when they are unfit to do so. The legal term for the person serving as POA is “agent;” the incapacitated individual is known as the “principal.”
Some POA designations offer the agent a broader level of authority than others, however. Keep these differences in mind as you navigate any matters related to becoming POA for someone:
Durable vs. nondurable POA
It’s critical to have durable POA (DPOA) in order to act on behalf of an incapacitated loved one. A general POA is terminated when the principal becomes incapacitated. A DPOA contains legal language that allows the agent to make financial and other decisions for the principal when they can’t.
Hopefully, your parent or spouse created a DPOA long before dementia entered the picture. But there’s a good chance they didn’t. A study by Merrill Lynch and Age Wave found that only 33 percent of 3,000 people 55 and older surveyed had a DPOA.
McDowell notes that when someone with dementia doesn’t have a POA in place, it’s often a family member who notices concerning behavior and suggests meeting with an attorney. These conversations aren’t always easy. Your loved one might be resistant to the idea or in denial about their condition. And only they can initiate and sign a POA.
“If someone comes to see me, I meet with them privately to ask them what they want and who would meet their needs,” she says. “Who do they trust and want to serve in the role of POA?”
Immediate vs. springing POA
POAs can go into effect immediately, giving the agent the authority to make decisions for a principal before they’re incapacitated. Or they can be “springing” POAs. With a springing POA, an agent can’t act for a principal until that person is legally incapacitated.
Narrow or specific POA
Power of attorney doesn’t always give the agent the ability to handle another person’s affairs in their entirety. Some POA agreements may cover only a specific task or responsibility, such as selling a home, and end once that responsibility is completed.
When someone with dementia doesn’t have a POA and is too incapacitated to designate one, a guardian or conservator may be needed. In addition to handling financial matters for the afflicted person, guardians are responsible for making sure their day-to-day needs are met. The guardian can be a family member or someone else.
Petitioning for guardianship
To protect the rights of the person with dementia during the petitioning process, the court appoints a “guardian ad litem” (GAL)
“The guardian ad litem will be the eyes and ears of the court because anyone can file a petition for guardianship,” explains McDowell. “They will ask questions like, ‘Why did you file? What do you think is going on?’ Even when a person is incapacitated and can’t communicate, there are lots of questions about why they need a guardian. It isn’t always a slam dunk — there’s a lot to it.”
Court appointed guardians
Sometimes a person with severe dementia doesn’t have family or friends to look out for them. A concerned outsider, such as a neighbor or doctor, might contact Adult Protective Services. If the agency detects signs of self-neglect, it can file a petition for guardianship or appoint a third-party to do so. The process varies significantly from state to state. Some states require a medical evaluation before granting guardianship; others allow the court to appoint one immediately.
Map out a pre-listing plan
Your POA is in order and you’re ready to help your loved one sell their home. Before you do, take a step back. Consider these things to ensure the best possible outcome for them — and for your peace of mind.
Get clear on why you’re selling
While this may seem obvious, McDowell stresses that it’s important to have clarity on why you’re selling. She often meets with clients who are selling the house of a family member or spouse with dementia because they think that’s what they’re supposed to do. Sometimes selling a home isn’t necessary or the best option.
“A lot of people prefer care in their home,” she says. “Some states will provide Medicaid services in the home, so a sale isn’t required. It’s important to have a broad, long-range plan.”
Check your title
Title companies get finicky when it comes to a home sale involving a POA. Be prepared to answer questions about when the POA was executed, when the principal was diagnosed with dementia, and how proceeds from the sale will be dispersed.
Fixsen frequently works with clients who run into title problems because they don’t understand the very specific requirements of such sales. “We’ll actually dictate to the title company exactly how the title is held, how the paperwork needs to be signed, and how the funds will be distributed and delivered,” she says.
Let your loved one grieve
Remember that saying good-bye to a home can be extremely painful. “They’re not just selling their home, in most cases, they’re leaving behind long-term memories,” shares Fixsen. “As you help them move, you need to walk very gently and acknowledge their grieving process.”
Moving is especially stressful for people with dementia. They don’t always grasp what’s happening and their muddled thinking makes it hard to stay on top of clutter.
Begin decluttering and sorting as soon as you can— the Family Caregiver Alliance recommends starting six months to a year before a move. Approach the process slowly and methodically, tackling one room at a time. If possible, allow your loved one to help.
Let them keep some treasured mementos, family photos, maybe even a favorite piece of furniture. Having familiar items around them will make it easier to adjust to their new living situation.
Header Image Source: (Matthew Bennett / Unsplash)