Can a house be sold when one joint owner has lost capacity?

What happens when a husband and wife own a house jointly and one of them has lost mental and physical capacity? Can the house be sold? I'd like to share this reader's question with all of you because it asks about a very common situation that many of you will recognize.

"My dad was diagnosed with Alzheimer's disease and recently suffered a stroke.  He does not have a POA set up.  My parents have joint tenancy of their house in Ontario.  Is it true that we cannot sell the house to fund his nursing home expenses?"

 

The fact that you're asking whether "it's true" tells me that someone has already advised you that the house can't be sold. I have no idea whether that information came from a lawyer, realtor or just a friend, but I agree with them. The house can't be sold based on today's facts, but this can be fixed.

 

The fact that the house is held in joint tenancy by your father and mother means that the house can't be sold without signatures by both of them. It sounds as if your mother is capable of signing documents and is willing to do so, but she is only one half of the owners.

 

The question is what to do about getting your father's signature. From what you've said, he is not capable of understanding legal documents. This is not surprising given that he has Alzheimer's disease as well as the after-effects of a stroke. He cannot and should not be asked to sign anything. If he isn't capable himself, we have to look at whether anyone has the legal right to sign on his behalf.

 

Many people seem to think that a spouse can automatically sign things on behalf of the other spouse in difficult situations like this, but they are completely wrong.

 

The best solution at this point would be to use a Power of Attorney. If properly drafted, your father's chosen representative could use that document to give your father's consent for him, and to sign for him. However, you've already said that your father didn't set up a Power of Attorney, so that option is out.

 

There is another option. Someone can apply to the court to be appointed as your father's trustee. This would give someone the right to act on behalf of your father, with similar rights and responsibilities as that person would have under a Power of Attorney. Obviously going through this procedure is going to take longer and be more costly than simply using a Power of Attorney but in the absence of your father's planning, it's likely the best option.

 

It's essential that when you or your mother make this application to the court that you ensure that the power to sell real estate is included. It's not automatic in all jurisdictions.

 

If you need help getting started, any lawyer who does estate planning should be able to work with you. If you want to look into doing it yourself, you could always check out my book called Protect Your Elderly Parents: Become Your Parent's Guardian or Trustee.