My father suffers from dementia and he ‘wrote off’ my brother’s $200,000 home loan. The nursing home’s notary said he was of sound mind. What can we do?

My parents made many improvements, including replacing windows, siding, and fencing. They paid all taxes and insurance premiums. According to the loan, my brother should have paid it. They managed the farm, including cattle and hay, and improved the fields.

They also signed a document in 2016 stating they would pay “rent” on a loan for use of the property. My brother paid $150,000 at the beginning of the loan but nothing after that. He said he would repay the money when my parents died and he inherited the inheritance.

My father, who is in his late 90s, suffers from early-onset dementia and delirium due to a urinary tract infection. My brother made me sign a certificate saying he had paid off the loan. I have power of attorney over my father and am the executor and trustee of his estate. I looked at the loan terms. My brother owes $205,000. I hit the ceiling.

The state was prepared to investigate financial exploitation. I believe the nursing home that provided the probate was wrong to rule that my father was of sound mind, given that they knew I had power of attorney and were concerned about my father’s cognitive health.

Dad said that over time, he would give the same amount to his other siblings. My sister got angry and said that my siblings should not accept cash gifts. Although property values ​​have more than doubled, he still feels cheated. I consulted with an attorney who agreed that written documents should prevail.

oh my god?

betrayed brother

Dear traitors,

If your father left $205,000 to another child and deducted that amount from this brother’s inheritance, that would seem like the path of least resistance. It would be cheaper and easier than challenging a notary’s assessment of your father’s statutory competency.

Giving you $205,000 over the years will be a more difficult proposition due to your father’s declining health. The annual exclusion amount, or the amount you can give to a third party without using your annual gift or estate tax exemption, is $17,000 for singles and $34,000 for married couples in 2023. Otherwise, you must file a gift tax return with the National Tax Service.

The 2023 lifetime gift and estate tax exemption is $12.92 million for singles and $25.84 million for couples. If Congress doesn’t act, these tax rates will expire at the end of 2025, reverting to levels prior to the Tax Cuts and Jobs Act, which took effect in 2018.

The notarization process is flawed

“Notarization is excellent evidence for some things, but it’s less reliable for other things,” says Mike Fiffik, a partner attorney at LegalShield in Pittsburgh. “But in all cases, notarized documents can be challenged.”

A notarized document indicates that the signer acted without duress and understood what he or she was signing. However, it has a flaw. “In practice, notaries have little to no training or experience necessary to assess a signer’s mental capacity,” says Fiffik. “Notaries can look for ‘red flags,’ such as when a signer is communicating inconsistently, is under obvious physical pressure, or is using excessive drugs.”

“The fact that it was notarized will not prevent a document from being challenged if there is other evidence that raises doubts about the signer’s mental capacity at the time the document was signed,” Fiffik added. “Notaries will definitely be witnesses in court proceedings.”

Risks of lending to family

Your father has fallen into a trap. Giving one child preferential treatment over another. If the child in question is trustworthy, he may do so, but he may end up saying something unwise. In this case, my parents lent my younger brother money to buy a house. and You have paid rent for the property. Bad combo.

In a recent CreditCards.com survey of more than 2,000 adults, nearly 60 percent of people who lent money to family members said it was not a good idea. Moreover, 42% said they did not get their money back and 10% said their credit score suffered.

Never lend more than you can afford to lose. Know that having a friend or family member owe you money can change the nature of the relationship, create an unequal balance of power, and ultimately cause irreparable damage to the relationship.

But there are options. Consider the risks and proceed with caution.

See more works by Quentin Pottrell:

Would it be okay if my new boyfriend asked me to share some money? ‘I don’t want him to get used to me paying for his meals.’

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