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I'm curious about the capital gain issue, since it's not the principal residence any more. Are you thinking it would be treated not as your father's principal residence, and therefore subject to a different rate of gain when sold? What about step-up value on sale?

As to your other questions, lots of good comments, on which I'd like to add some thoughts.

1. You can start cleaning it up & preparing it for sale, boxing up, indexing contents in case your father wants something. If you use a spreadsheet, you can easily search for anything, also making it easier to locate something he might think he needs (acknowledging that potential).

If he does agree to sell, or at such other appropriate time, your work is already done for you, and you'll avoid the stress of selling at a more challenging time. Yet you haven't defied his wishes.

2. Hire a cleanout company, but do your homework. The 1-800 junk removers are different than a real cleanout company. The one I hired is Veteran owned, with workers who really know how to dismantle things that can't be disposed of w/o doing so. They're in E. Michigan.

3. Determine if there are any haz-mat items, which in our area includes cans with gas, oil, and similar type substances.

A flexible junk removal company may take these items for you, as it's often hard, for example, to get a propane gas container in a car all by yourself (it is for me).

4. If there are vehicles, lawn equipment, dilapidated structures such as sheds, those require a different approach. I hired a demolition company for one. It was costly, but safer.

5. Something I learned through realtors. Some may offer suggestions or specific references on companies, but there may be a caveat. One of the 5 realtors with whom I spoke was glad to suggest someone for a particularly challenging removal item, but ONLY if I agreed to specifically retain him as my realtor. He didn't get my business.

If you do hire contractors, make sure to get a copy of their insurance certificates. When dealing with clean-outs, it's easy for someone to be injured, especially if there are very heavy items.

6. If the house isn't subject to vacant house insurance, you'll need to have that, but it doesn't cover water damage, such as that from broken pipes. Companies that provide this kind of insurance are limited. In Michigan, Foremost is one that does.

If there are weapons in the house, they won't be covered by a policy unless they're in a gun safe.

7. Commenting on Mincemeat's suggestion, unless you're actually staying in the house, be careful about having sales and avoid responding to inquiries on whether or not the house is vacant. I learned to twist the truth and avoid that issue, as I soon learned that not only the neighbors but someone who drove by wanted certain things.

In one case, a woman came over to dig up plants, w/o even determining first if the house was for sale. And whether or not I lived there or if the house was vacant was ALWAYS asked by contractors, potential buyers and more.

8. Whatever you do (and you may already have taken care of this), have the water turned off by the city/township for the winter to avoid frozen pipes. It cost $30 for me to have the township do this, and will cost another $30 to turn the water back on. But that's far less than the damage of broken pipes and a flooded basement.

9. I was told by a trust accountant that the IRS requires assessment of a house's value w/i a certain period of time after death, and it has to be done by a qualified assessor, not "just" a real estate agent. I don't know if this applies to any sale now, or just those of houses held in trust.
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disgustedtoo May 2020
Save any receipts and copies of payments for any work done and materials - they can ALL be used to help reduce the cap gains.

We could have avoided a lot of the cap gains, if we had waited until mom passed (she's still going) due to it being a life estate (a type of trust.) Problem was between RE taxes, condo fees and utilities, a lot of $$ going out the door for no good reason! Kind of negates any gain we might have gotten!

Meanwhile, I got most of the trekking/doing, and it sucked down over a year and a half of my life! The timing was actually great - not only did it sell quickly (55+ only, none others really on the market in that area), but we had a mini-bidding war and got more than we asked for it!
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I was in your exact situation. I took care of upkeep and bills on an empty house from afar for months, and ultimately argued with dad over every decision as I wanted him to feel like he was in control and making his own decisions. Ultimately it made me resentful. I put in a ton of time and effort in a futile attempt to do what dad wished which was not practical or even possible. I didn’t follow my own advice— “act now and apologize later.” As well, read up on this site about the utility of white lies. You are just heading out there to check up on the place, right?!
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You are the POA, your decision. Seems like because ur the POA, u get the responsibility anyway. Any money being used to keep it up could go to his future care.

Be aware, if you think that Medicaid will be needed within five years, it has to be sold at Market Value. Do not depend on a realtor to know the rules. I wanted Moms assessed. Realtor said she could do comparables. An assessor will give you a better idea. I would sell it "as is" and make sure the assessor knows that. Put it up for sale now. It could take a while.

Yes, go clean it out. My Mom had a 4 bedroom farmhouse she lived in for 60 years. She didn't just have her stuff, she had some of my brothers and my deceased sisters. Better to work room by room. First, though, get rid of clothes he will never wear. Then the junk. I bought storage boxes with lids and put each siblings name on a box. As I found pictures and things I thought they would want, I thru it in their box. I doubt if any of them will drive to Mich. to get furniture so sell it or give it to a thrift shop. Now you should be getting down to the good stuff. Make a list, see if anyone wants anything in particular, if not, sell or donate. Lots of Church yardsales going on in the Summer. I did this pretty much by myself. Husband helped with the heavy stuff. SIL came and took what she wanted. My girlfriend belongs to a couple of groups and cooks/bakes for them so she got all Moms baking dishes. I really enjoy cleaning out.
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We had the very same dilemma - my sister was having to do the upkeep, in addition to her own house. Ultimately, it took two things - my sister told her she couldn't do the extra work any more and my husband told her that she was risking frozen pipes (NY), leaking roof and other items while she was living elsewhere. He told her the house value would decrease as more items needed work. What I wish we'd done when we cleaned out the house was rent a dumpster to make it easier.
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It sounds as though you have answered your own question. If you have POA, then go for the summer and take your time cleaning, sorting, donating and selling. Get a large roll off dumpster, have a garage sale every Saturday, tell the customers to come back every Saturday as you will have new items.

Vacant homes attract trouble. As you remove the clutter and hoard, you will probably find some deferred maintainance issues. Having the luxury of time to roll through this huge project beats the urgency and rush of having to do it in a hurry. As POA you have been chosen for your ability to manage for the best interest of your Dad. Cleaning up his house is most likely not on your siblings list of things they are wanting to do.

Hire a local high school student or retired friend to help you stage your garage sale and enjoy the memories.
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My heart goes out to you.

We have a similar situation. Dad has hoarded for years. Unfortunately he can still get to the house, which is in a trust, and he notices if anything is out of place.

My brother and I are the remainder men to the trust. I would like to tackle some of the mess, my brother does not want to rock the boat.

The property is on an island with no garbage pick up, so we have to pay big bucks or rent trucks to have the garbage removed.

If I were you, I would go ahead, drive cross county and start the clean up process.
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kdcm1011 May 2020
I agree with all you said here.
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I would at least start cleaning it out and when I was done, I would probably sell it too. I would _not_ tell Dad what was going on with the house; I might not tell the sibs either unless you believe one or more might be interested in purchasing the house at fair market value. Clean up the yard and landscaping and take a nice photo for your father (and maybe some interior pics too), when you visit tell him truthfully "I took this/these the last time I was there".

Unoccupied houses seldom maintain value and often develop major repair/maintenance issues or are vandalized. There are usually problems with insurance too. Occasionally these days, empty houses end up with squatters that must be evicted. Paying taxes, insurance, and maintenance fees on a house your father will never be able to live in again does not make financial sense. If your father is having cognitive issues, I believe the POA needs to act in the father's best interest and sale this house while it can bring market value. That might not be until the economy recovers from CV (although I understand some rural homes are selling well as people want to get out of the cities), but you can at least get started with the cleanup.
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Make the goal to get it sold by August, 2021.
use the capital gains as the rationale as to why and then do a quick costs to keep (add on like 20% for inflation and make sure all costs, like repairs, yard, winterizing, insurances) as well, so that financially it costs big time to keep. Legally it sounds like you can do whatever, I’d just go ahead and keep it on the down low. Folks are gonna be pissed & second guess you no matter what, right? Ignore the drama.

If your not billing the trust MIE (Mileage and incidental expenses), I’d start doing that..... but not actually billing the Trust. You hold that lil missive back and if you get blowback, it’s more $$$ that non-decision making is gonna cost dad and the heirs. MIE kinda gives you leverage, Comprende?

Also next August, gives you a Basically a year, which imho Covid concerns will be lessened, and better position to actually get a property sold. You put it on the market next spring, so it shows when weather is best. Then if not sold by July drop price (motivated seller). Really a Realtor will be invaluable for you thru this.

Also when you’re there this summer, I wouldn’t take this on all by myself. I’d speak with either Realtors or if you have any old friends there, as to finding a duo to help get the place “market ready”. Place is huge so plenty of social distancing possible. There might be stuff buried in rooms that actually could work to have it staged “rustic” to sell. There are folks that are pros at staging and editing a house filled to the rafters in short time frame.
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jacobsonbob May 2020
If stuff has been sitting there so many years, there may also be collectibles there that could be sold on eBay or elsewhere.
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