Reverse Mortgage and Power of Attorney

1. In order to get a reverse mortgage, your parents will need to own the house, but you have stated that you have title to the house now in your capacity of trustee. If you convey the house to your parents so that they have title, they would not necessarily lose Medicaid benefits, but the house would become susceptible to Medicaid recovery after both of your parents die. Further, you would need to consult with your bankruptcy attorney about making any conveyances while you are in bankruptcy although your holding of title as trustee should not prevent a conveyance. You do want to make sure that with your lawyer that bankruptcy is not a bar and that you comply with bankruptcy law. 2. Your power of attorney and health car proxy for a parent will terminate if your parent revokes it or when the parent dies.

It is unclear to me how the house is actually titled. You mention a trust and a life estate. Are you personally named on the deed as a lifetime owner? Was the house transfered to a trust and you are merely being named in your capacity as a Trustee? If so, then you, personally, do not own any portion of the house but rather, the trust does. Are your parents the lifetime owners and a remainder owner who will inherit the property upon the death of your second parent (this is what I see most commonly in medicaid planning situations)? Once the ownership of the property is split in any of the above ways, or any other that can be contemplated, no bank will give a HELOC, Home Equity or Reverse Mortgage. Ownership would need to be unified in one party or H and W, if joint, so that all owners can sign off on any necessary documents. The bank will want to preserve it's right to foreclose if payments are not made. Also, before you take out a Reverse Mortgage, make sure you thoroughly investigate the costs as these products can be quite pricey. They do have their uses, as do all financial products, but they are not a "one size fits all" type solution and should not be considered a hand's down winner of a solution to all problems. Make sure it makes sense before you do it. You need to weigh the costs of the repairs, ability to obtain the financing, your parents medicaid situation and your bankruptcy situation. I recommend you discuss your ownership interest with your BK lawyer to make sure it is disclosed on your petition properly and then also discuss your parents' situation with an elder law attorney to make sure their medicaid situation is properly handled and managed. As to your last question, merely changing ownership of real property, or any other asset, will not revoke either your POA or your HCP. Those can only be cancelled if either your parents revoke them (and give you notice) or your resign your right to act.

First, I would agree with the answer that advised you to discuss this matter in detail with your bankruptcy attorney because she or he needs to know all the relevant facts and is in the best position to help you address the matter. That being said, I would suggest that you also consider finding an alternate or replacement trustee to take over the trusteeship while you work out your own problems in bankruptcy. As trustee you have certain fiduciary duties to both the assets of the trust and the beneficiaries of the trust, and those duties might be compromised as a result of your own personal bankruptcy. At the very least, and subject to the advice of your bankruptcy attorney, that would provide a clean separation between the trust's assets and your personal assets, and would simplify the issues regarding whether or not the trust can obtain a reverse mortgage or can otherwise borrow against the trust's asset - the house your parents are living in.