A reverse mortgage is a mortgage you can take out when you’re 62 years or older. This plan lets you stay in your home as you age. The Federal Trade Commission says that it’s turning your equity into cash without having to sell your home. However, the FTC warns that reverse mortgages can be tricky, so you need to do your homework.
wfmz.com’s article, “Life Lessons: Reverse mortgages: When are they dangerous,” reports that Elder Law attorneys have had adult children come to their offices wondering how they were named in a foreclosure lawsuit, when it was the mother’s reverse mortgage.
When parents pass away, their homes are commonly inherited by their children. In the case of parents with a reverse mortgage, however, the children could also be named in a foreclosure. This can come as quite a shock to adult children. Seniors also may not understand that they have to keep paying for the upkeep of the home. If you’re married and there’s just the one name on the mortgage, it could also spell trouble for your spouse.
The rules state that if you’re out of the house for a year, the reverse mortgage company is allowed to foreclose. In addition, a reverse mortgage may not provide enough cash to assist you, especially if you need around-the-clock at-home care costing as much as $12,000 a month. Despite these dangers, a reverse mortgage still may be right for you.
A reverse mortgage would be a good option, if a person insists on staying in the home and they have a family caregiver.
There are also Medicaid programs that may help pay for nursing home care as well as waiver programs through Medicaid that may help pay for assisted living and home care with the ability to keep your home and can leave it to your children or spouse.
If you have more assets, talk to an Elder Law attorney to develop a plan that protects those assets. For example, in some states you can pay a relative to be your caregiver.
Reference: wfmz.com (January 24, 2017) “Life Lessons: Reverse mortgages: When are they dangerous”
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A Checklist for Veterans
“This checklist is designed to provide Veterans/retirees and their loved ones with some help in preparing for the future.”
The Wadena Pioneer-Journal recently put together a checklist for veterans in the article, “What survivors should know; A veteran/retiree checklist.” This checklist isn’t all-inclusive and should be used with other tools you should discuss with your estate planning attorney. Be sure to create and maintain these files:
- Military File. This should include your retirement orders, your DD 214, separation papers and medical records.
- Military Retired Pay File. Make sure you have the claim number of any pending VA claims, along with the address of the VA office being used, a list of current deductions from benefits, and the name, relationship and address of the beneficiary for any unpaid retired pay at the time of death.
- Annuities File. Be sure to include information about the Survivor Benefit Plan (SBP), the Reserve Component Survivor Benefit Plan (RCSBP), the Retired Serviceman's Family Protection Plan (RSFPP) and your civil service annuity.
- Personal Document File. This should have your marriage records, divorce decrees, adoption records and naturalization papers.
- Income Tax File. Retain copies of all of your state and federal income tax returns.
- Property Tax File. This should include copies of tax bills, deeds and any other related information.
- Insurance Policy File. Keep your life insurance, property, accident, liability insurance and hospitalization and medical insurance records here.
- Important Contacts. Maintain a list of banking and credit information in a secure location. This should include bank account numbers, the location of all deposit boxes, savings bond information, all stocks, bonds, and any securities, credit card account numbers and mailing addresses and 401(k) accounts.
- Memberships. Keep a membership listing of all associations and organizations with their contact and membership fee information.
- Family and Business Contacts. Create a list of all friends and business associates and their contact information.
After preparing all of this, make sure to address the following:
- Burial. Have a discussion with your next of kin about your wishes for burial and funeral services. Include the cemetery location and type of burial. You should also consider pre-arranging your funeral services at your local funeral home.
- Will. Once your decisions have been made and you’re comfortable with them, have a will prepared outlining specifics by an estate planning attorney.
- Notifications. Be sure that your will and all other important documents are kept in a secure place, and let your family know where the documents are located. Some of the organizations to be notified in the event of a retiree death include:
- Defense Finance and Accounting Service;
- Social Security Administration (for death benefits);
- Department of Veterans Affairs (if applicable);
- Office of Personnel Management (OPM);
- Any fraternal groups of which you are a member; and
- Any previous employers that provide pension or benefits.
Reference: Wadena (MN) Pioneer-Journal (January 21, 2017) “What survivors should know; A veteran/retiree checklist”