In talking with a financial advisor, I should clean out the house. Clean it up for renting to generate income for her stay. My parents were pack rats that never threw out anything. They grew up in the depression.
Should I try to do a couple massive garage sales or should I hire estate clearing house? The house is 300 miles away. I do have friend that can help out. Any advise on which path?
I hired a specialist who came in with a crew of people. They spent a full five days sorting, displaying, and pricing the items in my parents' house, then held a sale that lasted for one day. We had 500 people go through the house, they sold $17,000 worth of stuff, and even then it hardly looked like anything sold. Fortunately, they also had a contact for someone to come in and clear out the rest of the things that didn't sold. It took that crew an additional three days to haul out everything, and it only cost me $1600 for that service.
You want that house cleared out and on the rental market ASAP, so I recommend taking the route that achieves that goal as quickly as possible, because rental income is where the bigger money is, not in the estate sale.
If they are hoarders, there might not be much worth selling. I'd inspect the house first before making a plan. I doubt an estate sale company would touch a hoarder house.
Also, I agree with MJ1929 that readying the house for rental is more important (but can't happen without clearing/cleaning it). You should be aware that some towns/counties have rules about renting, ie everything has to be up to code before it can be rented out.
My son purchased a house on the condition of no inspection from a PoA of an elder couple because literally nothing was up to code and would have cost a lot of money to make it so.
And, are you ready to be a landlord 300 miles away? You'd probably have to hire a management company. Make sure the neighborhood doesn't have ordinances that prevent renting.
I agree that you should hire a company to handle this. And professional cleaners once it's emptied out. On mom's dime, of course. Why should YOU have to do all that work, especially since you do not live in the vicinity?
I would NOT rent the house. I would SELL it ASAP. Renting from afar will be difficult and more money will be spent on having someone local manage it for you. Too much hassle, IMHO.
Property managers aren't really that expensive -- less than 10% of the monthly rent is all. We have three properties in two states and live in a third state. It's not an issue at all with property managers handling them.
It is nothing but headache and a lot of work.
(not to mention depending on where the house is in order to legally rent it the house may have to go through inspections from Building and Zoning as well as Fire Department and to bring it up to code would probably be cost prohibitive)
Clear it out. I would do this myself if there is a chance that they hid money or valuables.
Then sell the house.
Talk to a realtor about the best way to do this. "As is" or do you spend some to get the most back.
I also considered an estate clearing house but there were many things we wanted to keep. My brother and I ended up traveling and going through the house. We had a "keep" section, a "give away' section and a "throw away" section. I am glad I did it. She had saved so many things that I was not aware of. Precious things. She had saved valentines cards that I had received from my elementary friends (can you believe that!) It was hard and incredibly emotional but also cathartic. You would be amazed how many demons we exercised during that event. They were farmers and also pack rats.
Not sure about your circumstance and if you could have a hybrid of estate planning and reviewing the items. I am glad I chose the route I did. Again, very hard but it closed a chapter.
I wish you strength and determination. You will get through this!
Selling the house now will mean the gvt will get A LOT ($$$) of capital gains. Parents bought the house in 1964.
I spent this last weekend going thru the house going thru all the papers, and gathering all the photo. Along with some misc. stuff, like jewelry. The next trip I will get the things I want to keep...
BTW They were both pack rats (very organized). With the passing of my father, mom's dementia developed, and she became a hoarder.
My folks bought their house in Southern California in 1968 for $45,000, so you can imagine the profit on that when it sold in 2022. Fortunately, my brother and I inherited it, so our cost basis was the value of the house the day my mother died in 2021, not what they paid in '68.
It sounds like you know what you're doing. Just keep the receipts for all the improvements you do to the house now and when you eventually sell it.
I rented a 30 yd dumpster and went through the house and threw most of it away. Filled the dumpster up. After that it just looked like someone lived there. Now, I take a few days each month and go back. I found an online auction place local. They will go through the house and sell everything through the auction. They can even sell the house!
I didn't go that route, too many personal items & things I need to go through. So, each time I go back I take a few loads to the auction. My brother lives near the house and helps me when I'm there. They sell it and it pays for the utilities to keep the house going usually.
I know this is the long way. I could have thrown it all away, but they had a lot of nice items that I just can't bring myself to throw away. I feel like I would do my parents a disservice to just throw their stuff away. I also wish I had found the auction place before throwing so much away. I think I could have made a lot of money on stuff I threw away.
I have found things I never thought I would find. I found the marriage licenses of my great-grandparents on both my mom and dads side. I found many personal documents of relatives that have passed. I'm not sure what to do with this stuff. I hate to throw it out. I don't have children and my nieces and nephews do not want it. I feel it's our family history and will just be gone when I'm gone.
Once everything is cleaned out, I will sell the property. It's sad to have to do this. Every time I go back, I feel like I've lost mom again even though she is still alive. I miss her.
No yard sales. A lot of work with not much profit. Go thru first and get rid of the trash. Then go thru and see if there are things you rather just give to thrift shops. Is there anyone who would like something to remember Mom by. Clothes, donate them. Shoes too if in good condition. Purses, that depends if they are designer or not. Designer in good condition save for the Estate sale. Designer shoes too. Save the good stuff for an estate sale.
We had a women do my MILs house. Because she was ill and in Rehab for a month before her passing, my DH, BIL and wife and I cleaned out the house of junk. We straightened up cabinets, got rid of old food, etc. The woman BIL hired came in and set up the estate sale. It included furniture, dishes, etc. She was a nick nack collector so we sold them. The woman handled everything, even getting rid of what was not sold. Because we were selling the house, she did a deep clean for us too. So much better than having yard sales.
Further, if your mom is likely to need Medicaid to pick up the long term care coverage at some point at a Medicare/Medicaid qualified Skilled Nursing Facility (SNF) in their memory care unit -- because of the 5-year look back provision -- it is imperative that anything done in within that 5 year window is done above board and according to the Medicaid rules. Getting access to all accounts and documents (bank statement going back 5 years, tax filings, any retirement and/or Social Security accounts) is something work on obtaining now if/when Medicaid has to be part of this; you are ready for that part. Set up everyone w/on-line access so you can more easily track and work through this. You'll need this -- on-line access to accounts -- in order to file her State, Local and Federal taxes moving forward too.
Also, hope you have all the required legal documents -- especially a durable powder of attorney, and not the "springing type" -- executed already; as well as the advance directive docs naming you as the health agent; ditto for end of life documents (Will and/or Trust documents).
The legal fees should be paid out of your mom's assets. Sorry to say, but also worth prepaying and funeral/burial expenses now from any assets she has. These expenses are allowable expenses within the Medicaid spent down rules if within reason. A elaborate funeral is not going to pass w/Medicaid, but something simple will be ok. For my mom -- we live in an East Coast urban area -- a simple burial (no service) cost $14K. We were frankly shocked at how much a "real funeral" costs (about $30K).
Top realtors where your mom's home is located can give you some idea of the value "as is," the value if cleaned up/cleared out, the cost for cleaning out the stuff (most have good lists of haul away and/or estate sale type vendors), and the rental income potential. Talk with a few to get their advice and you'll also get a feel with whom to list with if you choose to sell or rent it. Doing the long distance rental and management is a potential problem as you'd need to follow the rental law/rules where the home is located; ergo more lawyers so the proper rental agreements and anything else is done.
Also if rented, then the rental income is taxable income to your mom so the rental price needs to consider that (income taxes to be paid), any management fees, and repairs, plus real estate taxes, and the potential depreciation value taken off the taxable income but ALSO, the later capital gains tax when it does finally sell. May be easier to just sell the property and put all the funds into an escrow and/or Trust type account (depends on the State law where your LO is) to pay for her care. With CDs now paying 4 or 5%, the funds from the sale could be invested and also generate income (taxable too).
Best of luck with this. Getting w/a competent attorney ASAP (Elder Care, Estate and Tax) should really be your first step.
We gave personal items to family members who wanted them. Donated pantry items and clothing to lacal charities. Sold what we could through FB market place and then hired an Estate Liquidator to clean out the rest. They sold some large furniture (that we were not able to sell) to wholesellers. That reduced our cost of their services. They donated what they could and gave us donation receipts for tax purposes. They brought a dumpster and cleared the rest.
In the past when my parents passed we tried estate sales and basically broke even. It wasn't worth it.
We did pay the estate Liquidator but it wasn't huge and far less trauma and work than the estate sale route.
On attorney advice, I've made advance funeral arrangements for our LO. Those were paid out of the proceeds of the house sale.
This IS a good time to sell real estate and we don't know what the future holds regarding prices and appreciation/ depreciation.
So in a nut shell: keep accurate records, use an estate Liquidator, sell the real estate and manage care with the proceeds from the sale of personal property and real estate.
An Estate sale will cost you a % of the "profits"
A garage sale is a PITA (pain in the...)
Is there really truly anything worth anything?
I would take a week and go through what is there.
Ask any siblings to join you if you wish.
Take what is near and dear to you and family.,
then make a good, level headed assessment of what is there.
If things can be donated contact the donation site of your choice then
Get a dumpster or contact one of the Junk removal companies.
Many will go through the items again and donate or sell what they can for scrap then the rest gets a trip to the landfill.
Get a dumpster or call one of the Junk removing companies.
I would seriously reconsider renting the property.
I would sell.
To manage a property from 300 miles away is a nightmare. Even managing from 50 miles is difficult.
Many communities now will want you to have a "licensed" management company if you are not managing it yourself.
and for rental property you may have to get inspected and pay village, county or city fees for licensing/permits. (and there may be separate fire codes you have to follow)
Go and get everything you want and get it off your chest. I don't know how bad it is but in certain circumstances the state could condem the property and give you money for the property and they own it and demolish it. Dad did that to the place we lived in when we were young and we got a great new home and neighborhood! The land has value!!! I'm speaking from experience here, you don't want to be a landlord miles away. You have enough going on with your Mother and you will be called on to do more, much more! Paperwork to be a landlord and the upkeep of the building? Insurance? Filing paperwork every year for renters credit? Who knows what else can happen? I'm sorry,I read that sometimes renters refuse to leave and they could have squatters rights? Sent me overboard. You don't need that!!! You are in a mess you didn't ask for,no one here asked for the responsibility we've encountered. MC and I'm going through hospice for over a year. I've got to have my moms room locked because other residents come in and freak her out. I finally got a key to her room and don't have to bother the staff. It's very costly but it's her money and when it runs out,I have the paperwork to show that she's broke. She did nothing wrong, she spent $6,307.00 per month out of her pocket! Yeah, it's not going to get any better, sorry. Good humor,did you know that my mother was talking to the science museum about a 16 foot fish in her freezer?
I looked at her and said,I see ice cream. You don't need to do anything but clean it up and be there for her. Too much to do and little time. . I'm a year with my mother and hospice, do you have the energy to keep doing what you're doing? Everyone here has been there,done that. You can be a warrior like most and suffer burnout as we all do. You have to decide to move on and do what your heart tells you. You already did. Listen to people who have been there and feel with your heart. You and I came here for help, good people! MC happens when they decide not to help themselves. They don't want to do puzzles or memory games or enhance their hearing. It's not your fault! They will continue to do whatever they want. It's the way of life. We need to accept it and they will continue to blow our mind. Let everything go and forge onward. Do what you need to do! You can't help them when you are weak. You know the feeling. We all do. Been there, done that. Pain! More pain! I'll never be ready for her final hours. You can't be a landlord, your time is with you having a fairly stable life and having time with your mother. Look into selling her property if need be. You can't be helpful if you're not stable in your life. You can't help, sometimes It's inevitable that we don't have all the answers. We just go with what we have and wing it. Love
Please see a certified elder attorney. You are possibly confusing what the IRS allows as gifts to what MediCAID allows. MediCARE could care less. They don’t pay for long term care beyond a short rehab, only medical bills. MediCaid does not allow gifting for at least five years back in most states.
I hope your DM has enough for five more years should she need help.
But I agree best to get it taken care of.
the money made with the sold items payed for the clean out.
the junk filled three industrial
sized bins that had to be hauled away by trucks
You aren't close by--hire someone to do the haulout & cleaning. After you've picked through it as quickly as you can.
Any repairs necessary can be made when the house is empty, before you rent it out.