From the Best of Times – JoCo KS
By Alexandra R. English
We would all like to think that our families would never betray us. Unfortunately, in my experience, often it is family members who extort money and property from their older relatives.

Most often I see these instances begin when an adult child gets into financial trouble. The adult child usually owes thousands of dollars on credit cards. To help, the senior parents take out a mortgage on their home so the adult child can pay off his or her debt. The problem is that the mortgage is on the parents’ home and in the parents’ name, while it is the adult child who has informally agreed to make the payments on the mortgage.

At some point, the adult child either stops or threatens to stop making the payments on the mortgage. When the adult child actually stops making the payments, then my clients, who often are on a fixed income, must find a way to make the payments themselves or face foreclosure.

What can you do to prevent this from happening? Never take a mortgage out on your home to get your child out of debt, especially if you are not in a position to make the monthly payments yourself.
If you have already done this, please require your child to sign a promissory note requiring him to pay back the mortgage. It is best if the signatures in this promissory note are witnessed by a notary. While you can still lose your home to foreclosure if the payments are not made, a promissory note at least gives you some legal recourse against your child.

I have also seen instances in which the adult child blackmails her parents by telling them she will stop making payments unless the parents sign a quit-claim deed granting the daughter partial or full ownership in the home. This is why it is particularly important to have the adult child sign a promissory note. If the adult child has already signed a promissory note, you have a form of recourse against her when she threatens to stop making payments.

Never deed part or all of your interest in your home over to your child, even if your child threatens to stop making payments. If you are asked by your child (or anyone) to sign a document that would transfer ownership, contact an attorney immediately to help you protect your interest in your home.
You may wonder what the consequences could be of deeding part or all of your interest in your home over to your child. Well, the consequences can be severe.

First, even if you are doing this innocently and your child has no bad intentions, the transfer of the home can cause problems. If you have to apply to SRS for Medicaid within five years of transferring part or all of the home, you will be penalized from receiving Medicaid for months or years, depending on the value that was transferred. Also, if your child is sued, the home he lives in would be exempt from creditors but any additional home he owns is not exempt. This means that one of these creditors could force you from your home.
Second, some children are greedy. I recently worked with a client whose daughter forced him to quit-claim-deed the entire home over to her after she paid off the mortgage. Ever since this document was executed, the daughter has been using her ownership of the home as a threat against her father.
For years she constantly mentioned that she owned her dad’s home and that he had better do what she asked. He lived in fear of her. Recently, after her father was released from the hospital following recovery from a fall, the daughter began making claims that her father was incompetent and crazy and needed to be hospitalized. I have met with this man several times, and I will tell you he is fully competent and understands everything that is happening.

The police and social workers were called several times as the daughter tried to get the father out of the home. The father was in a constant state of fear about what would happen to him. The daughter even went so far as to make false claims that her father battered a member of the family, and my 80-year-old client was arrested and spent the night in jail. No charges were filed and he was released the next day, as the incident did not happen.

It is clear to me that this daughter is in some sort of financial trouble. She wants to profit from the sale of her father’s home, and she will stop at nothing to get him out of it. In this situation, intervention by an attorney is absolutely necessary.

Usually by the time I meet with such clients, interest in a home has already been deeded to the adult child. Most people do not want to think that their child is financially exploiting them, so they go along with whatever the child asks.

Furthermore, once the parent realizes what has happened, he is too embarrassed to do anything about it or he struggles with getting his adult child in trouble. Often it is too late by the time the parent comes to me for help.

Protect yourself! If your child asks you to take a mortgage out on your home, or if your child asks you to sign something related to the ownership of your home, either say no or consult with an attorney.
Because I am advising you not to transfer your current interest in your home over to your children, you may be wondering what you can do to ensure that your adult children will receive your home after you die. Kansas law allows you to execute a transfer-on-death deed that is recorded with the deed to your home. It states that upon your death, your home will automatically be transferred to certain designated beneficiaries. The benefits of this document are that it avoids probate and gives your children no current ownership interest in your home.

Please have an attorney assist you with drafting this document. Kansas Legal Services regularly drafts them, so if you are unable to afford a private attorney, you may apply for assistance by calling 800-723-6953.
Alexandra English is an elder law attorney with Kansas Legal Services, Inc.