Elderly parent advice

[taxguykarl]

My mom turns 71 this fall and not all is well.

It seems that while taking care of my great aunt and uncle she was (understandibly, I concede) neglecting some of her own interests/responsibilities.

Last month, Mom had surgery and my sister, J, came over to take care of her and do some housecleaning and found a lot of unopened correspondance. J found that mom had not filed at least since 2010 . Could I take care of that for her? As mother would say: No hill to a climber. She went to our local VITA to file her 2010 return, so that refund won't be effectively pissed away.

Illinois returns will not be a problem as her income is her teacher's pension (exempt from Illinois state tax) and about $1K in investment income. I would need to verify that there is no state withholding (IOW a state return to get back what should not have been withheld in the first place). Getting someone caught up is not a problem for me as I did that for a client just last month and he last filed in '03...no that's not a typo. I got another client caught up earlier this month--only 4 years for her.

Apparently we also have some issues with my paternal grandmother's estate (she died summer 1985); her old house may be seized due to property tax non-payment. Big problem as her executor was a local lawyer who we can't prove is still practing (she didn't trust us). Also that house was sold when she moved out in 1980...or was it? J noted that there is a hearing in June, so she offered to appear for that (note that she is flying from the Santa Cruz, CA area to central Illinois for this).

Dad who died in 2001 was a serious packrat, so clearing that house for its utimate sale will not be an easy task.

OTOH, Mom's cousin (who helped her take care of the great aunt & uncle) is in the real estate business and knows all the contractors who can get the job done. As there is little, if any, of sentimental value, we (J & I) agreed to liquidate and donate as much as we can.

It seems my mother may not be long for her house. I sure hope that she goes along with moving out as both her lot and house are already a bit much for her.

When I get back from vacay, I'll head down there to pick up her remaining tax stuff and inspect her house and grounds to assess the magnitude of these tasks.

Any advice you can give is welcome.

[Seshat]

You are going to need her signature, as you already know, or to have the local equivalent of financial power of attorney. Given how busy she already is, if you offer to take over for her and she trusts you, she may be happy to give you FPOA.

As for the other house and the legal issues there: I honestly can't advise you, I'm too unfamiliar with US legal stuffs.

Similarly, for getting your mother to a smarter place to live ... I don't know. My Nan frankly refused to move until well after she was literally bedridden. My parents, having seen what happened with Nan, are already working on moving of their own choice, and will be absolutely fine.
Maybe you have someone in the family you can use as a bad example, to encourage your mother to do what my folks are doing?

[Sapphire Silk]

I went through this with my mother a couple of years ago (Mom has Alzheimer's).

If she won't give you a POA you can't sell her house. Period. You'll have to gather evidence she is incompetent to manager her own affairs, and go to court. The court will appoint her an attorney to represent her own interests. Without a medical diagnosis that she can't manage her own affairs, you'll have to gather other evidence she can't do it. Falling behind on bills and taxes may help, but you may need more.

You really need to consult with an attorney versed in elder law before you make any moves to force your mother out of her home if she does not want to go.

You can file a late return. If she doesn't owe, it's all good. If she's owed any refunds even better, though she won't get interest on the money. If she owes, that's bad: she'll owe penalties and interest and that can stack up quick. Get the paperwork together, and do the returns (get a tax expert to help you); if she owes you may be able to work out a settlement with the IRS, especially if she's normally been good about her taxes in the past and especially if you can prove incompetence. You won't get out of paying what she owes, though.

As to the tax situation with the house sold in the 80's. Unless someone in your family owns it, it is no longer your problem. It's the owners problem. A title search should have found this issue, and the new owner has to do his due diligence to make sure any taxes owed on the property were paid. Property taxes attach to the property, and if they are not paid when it is sold, they go to the new owner. States do it this way because it means no matter what they will eventually get their money.

So if the house is not in the hands of a family member, DO NOT GET INVOLVED. It will cost you a fortune, and you should not have to pay a red cent on it. Remember, heirs are not responsible for the debts of a deceased person; any debts are paid out of the estate first and once the estate is settled, any latecomers are SOL. So don't try and be a "nice guy" and help out the person you sold the house to. Don't!

If you want to know if the executor of that estate is still practicing, check with the Illinois Bar Association. They can tell you. Give her name to the homeowner; if she did something dodgey with the estate you might be able to go after her for it, but the statute of limitations has probably long passed since we're talking nearly 30 years here.

[taxguykarl]

You are going to need her signature, as you already know, or to have the local equivalent of financial power of attorney. Given how busy she already is, if you offer to take over for her and she trusts you, she may be happy to give you FPOA.

Ahead of you there, I have already prepped a form for POA with regard to tax matters. She's quite frugal, and most of her finances are effectively automatic.

Similarly, for getting your mother to a smarter place to live ... My parents, having seen what happened with Nan, are already working on moving of their own choice, and will be absolutely fine.
Maybe you have someone in the family you can use as a bad example, to encourage your mother to do what my folks are doing?

She has her eye on the home where the aforementioned great aunt and uncle lived. It was nicer than most elderly homes I visited...even better than my undergrad housing come to think of it. J and I will be moving stuff out and fixing up her grounds for the eventual sale.

You'll have to gather evidence she is incompetent to manager her own affairs, and go to court.

Mom is still quite competent--she is finally catching up on her own affairs.

You can file a late return. If she doesn't owe, it's all good. If she's owed any refunds even better, though she won't get interest on the money. If she owes, that's bad: she'll owe penalties and interest and that can stack up quick. Get the paperwork together, and do the returns (get a tax expert to help you); if she owes you may be able to work out a settlement with the IRS, especially if she's normally been good about her taxes in the past and especially if you can prove incompetence. You won't get out of paying what she owes, though.

Didn't you catch my handle? Rest assured, I am well versed in income taxes and IRS procedures. I know about late returns--I did that for several clients this season...what's one more to me.
J has already sorted out the likely tax-related documents which I will pick up in a couple weeks. Mom had a volunteer at VITA in the local senior center do her 2010 return as she is getting a refund (she normally does) owing is unlikely to be a problem. I have already prepped transcript requests to verify that the files J set up are complete (at least where her 1099's are concerned).

Now for granny's house:
It was not sold to a relative. J is already talking to a lawyer about this situation. Our plans are to keep us off the hook for the back taxes as that house was a dump (IIRC you could buy a nice double-wide for less than the asking price). IOW the place is probably not worth the fight. A title search is a good idea to see who exactly owns it.

If you want to know if the executor of that estate is still practicing, check with the Illinois Bar Association. They can tell you. Give her name to the homeowner; if she did something dodgey with the estate you might be able to go after her for it, but the statute of limitations has probably long passed since we're talking nearly 30 years here.

Yes, I will check on that. Yes I have no doubt the statue of limitations for actions against this hack has long passed; moreover, Illinois is notoriously soft of lawyer misconduct (Quick: name one lawyer convicted in Greylord who was refused re-instatement of his law license). More likely the executor (and definitely the lawyer handling the sale in '80) was not entirely competent. Probably didn't record the transfer properly.

This is not as bad as some cases I've seen here as Mom will be a lot more cooperative...No doubt her recent experience will adjust the attitude.

Nonetheless, thank you for the help. This will be a long summer.

[taxguykarl]

Update of sorts:
I got back from vacation on Friday evening. I drove down to my hometown Saturday morning.
Sure enough, J had sorted, the tax materials the best she knew how and Mom happily signed transcript requests. It was clear that POA is still premature--caring for an elderly couple unsurprisingly left her exhausted. Still, it is ironic that while looking out for their affairs, hers were neglected.
Nonetheless, I promptly sent away for her income statement transcripts (notice that you receive Copies B&C of W-2's and 1099's--guess who gets Copy A). When I have verification that the retirement and investment 1099's I saw were, in fact, complete; I'll get her siggies on those and dash them off without delay.
As for her grounds, I took a look around with her. She mentioned having already arranged for an arborist to prune the trees she wanted to keep and remove those she didn't (i.e. the ones uncomfortably close to her foundation).
I'll be speaking to J again this week. It seems the matter is not as bad as I was led to believe. It will be nothing like the summer of '80.

[taxguykarl]

Anouther update:
I had been in contact with J for a lot of the last month or so. It seems Granny's house was sold in at least three (3) tax sales. It appears there is an upcoming hearing regarding the property. IANAL, but my best guess is that this hearing is a quiet title suit. We (J and I) are sitting out to give the petitioner a default ruling, making that shack his problem. Especially since Grandma's estate was, in fact, several thousand in the negative--yes even factoring in the house. Yes, my parents have kept the documentation to back this up.
Remembering the admonition not to blame on conspiracy what can be explained by stupidity; J and I surmised that the treasurer, sheriff and recorder of deeds were not talking to each other.
The plan here is to let the hearing commence and if we get another tax bill or hear anything from the buyer, we have a competent attorney (easier to find here than Granny's county) set them all straight.

As for Mother:
I had wrapped her tax returns. Easier than most drop-offs as I only had to make one phone call for more information. I have quite a few clients who can take a lesson from her.
She has recovered enough to drive long distances and came by yesterday to sign her returns. To my (and hers I have no doubt) pleasant surprise, it is not too late to electronically file 2013 returns; so she will get that refund (more than she was expecting--for all three years come to think of it) sooner.
Her plans are to have her house on the market by her 75th birthday (10/28/2018). The needed repairs will be in stages per her plan. This summer will be to remove trees and bushes that are uncomfortably close to her foundation as well as work in her front yard.
Our next phase will be along the lines of emptying the house (Dad was a hoarder). J is coming over later this summer. Her plan is to clear the garage first and to set up a table which will be the base of operations to liquidate and donate as much as possible. Dad has a lot of fishing gear (about half in the original packages) which is now selling for some big bucks on eBay. It will be interesting to see what else J and I uncover.

Once again, thank you all for your advice. The situation is a lot better than I thought.