Parents taking a reverse mortgage

[Zoe]

The accountant knows how to do it and then they get a lawyer to do the paper work. It is not that expensive. You can afford the accountant and the lawyer.

The sooner you get the accountant, the better to try to protect your parents assets. The accountant will tell you these are your options to protect the equity in your parent's home.

A really good real estate lawyer could help you too. Accountants are better at some things than real estate lawyers.

I have a strong feeling your parents trust you very much and that will play a huge roll on how the accountant directs you to protect their assets.

If your parents trust you very much, it opens the door for the accountant and the lawyer to help protect their assets.

 

[Zoe]

Accountant and lawyer can help you give your parents any money they need out of their assets. Your parents would have to agree.

I'm a hillbilly and you are barking up the wrong tree on an appraiser's forum. You asking the question points to like they trust you very much.

Load them up. Get quotes on a CPA. You can get free consultation from a CPA in many cases. Say, Okay, I am bringing my parents. This is free consulation.............right?

If your parents are all in, they can help them with YOU. Reverse mortgage not needed here if you trust your daughter.

Sign these papers. Now, do you want to sell and give daughter as trustee over the assets or do you want to keep and let daughter manage the funds?

Understand is biggest fear is they have to go in nursing home and then nursing home will go after every asset your parents have.

It depends. They could die in a day.

We as appraisers appraise real property rights. Your best bet is a CPA with your parents or a very good real estate lawyer.

Personally, I would choose CPA because you can share things with CPA that will help tell you how to proceed. You know things about your parents, that the accountant don't know. The CPA or lawyer is bound to some confidentiality agreements with you personally.

Whatever you or your parents know will help them direct you. You will be their client.

Mom and Dad, what do you think based on what the CPA told us?

 

[Zoe]

I am holding on to the fact based on your opinion your parents may have $500,000 in equity.

I don't know that. You need to get your parents to a professional where you all are there together.

I am not your client and you can't afford me where your parents live. I say that, but I would be hard pressed to take your money and give market value appraisal on your parent's home.

It could possibly take me 2 weeks to appraise their home plus expenses. You will be happy with certified public accountant and free consult.

You could hire the appraiser personally with your accountant or a lawyer that is local. A local appraiser knows the market.

It has to do with liability insurance with both a CPA and a local real estate lawyer. I can't really help you on how much equity your parents have or any tax consequences for your parents.

To make it blunt, I am incompetent for your situation.

 

[Elliott]

Rather than ask appraisers the same question, why don't you consult a financial planner or attorney? There might even be an honest mortgage broker who could tell you the advantages and disadvantages.

 

[Zoe]

Rather than ask appraisers the same question, why don't you consult a financial planner or attorney? There might even be an honest mortgage broker who could tell you the advantages and disadvantages.

Yeah, they just need mom and dad to go with them so the CPA, financial counselor or lawyer can explain it to them all. The mom and dad need to be of sound mind. If the mom or dad have granted power of attorney to someone, they need to be there too.

 

[Mark K]

My first advice is to not take advice from someone who needs six posts to convey a point.

2nd, the RM isn't the devil; it can be useful but looking down the road, my guess is that it won't last long enough and they'll do it again and again until they run out of equity. After all, they made it this far in life living check-to-check and never saved any money so this windfall will be gone in no time. The first RM loan will be gone like a f#art thru a fan.

Its their life, their money and unless you can have them ruled incompetent by a court, all you can do advise and pick up the pieces at some point in the future. Just don't co-sign ANYTHING no matter the crisis.

Been there, done that, it's not fun.

Good luck.

 

[Zoe]

I would not cosign their mortgage or their credit cards. The only way advice would work is if they deeded the property to the child and them be like trustee over their accounts and be willing to help them with the any money they may need. Many many foreign people live in nice houses where the home is in the name of a trust. Certified public accountants and real estate lawyers know how to do that. It protects the assets from a bank or another creditor.

The trust dictates where the money can go from the house. Some people sell the house and give the cash to the child or someone else and the child promises to take care of the parent. It is a way of keeping a nursing home from getting the funds or another creditor.

The parent can even have rights to draw money from the trust. Many rich people live off money that comes out of a trust that someone created for them.

I knew some twins whose granddad was biggest barge manufacturer and shipper in USA. All the boys had to do was go get like a $10,000 to $15,000 a month out of a trust he created for them.

All they had to do is go to mailbox for the check. They were in college. That wasn't their college money. Their college was paid for. That was spending money. $10,000 to $15,000 a month.

Each one got $10,000 to $15,000 a month in mail. Sign the check and take it to bank.

 

[Zoe]

If the child cosigns the debt with the parent, it obligates the child to the debts of the parent also. I am not saying do that at all.

That would be stupid when parent has a huge equity in their home.

IRS rules are very tricky how to protect the assets the parent has worked for all their life and know where they want the money to go when they die.

 

[Zoe]

Social Security will take care of a dying person in a nursing home in USA if they have no other assets the nursing home can attach..

Many people say no, you are staying with me. You are not going in nursing home. I will get you to hospital before you die or you will go in hospice.

My mom got my Dad on hospice the day before he died at home. She had already deeded the house to my siblings a few years ago. I am in the will.

If you are on hospice and die at home, it is easier than if you die at home and not on hospice. When you go on hospice, your doctor knows you are fixing to die soon.

If you are not on hospice, people want to investigate cause of death.

Some people would rather die at home than in a hospital.. Nothing wrong with that.

 

[KHS445]

Social Security will take care of a dying person in a nursing home in USA if they have no other assets the nursing home can attach..

Many people say no, you are staying with me. You are not going in nursing home. I will get you to hospital before you die or you will go in hospice.

My mom got my Dad on hospice the day before he died at home. She had already deeded the house to my siblings a few years ago. I am in the will.

If you are on hospice and die at home, it is easier than if you die at home and not on hospice. When you go on hospice, your doctor knows you are fixing to die soon.

If you are not on hospice, people want to investigate cause of death.

Some people would rather die at home than in a hospital.. Nothing wrong with that.

Before offering advice and making suggestions you should know and understand the appropriate regulations.

First, SSI does not and will not pay for anyone’s nursing home stay. Social Security is supplemental income, not life style/end of life support. Second, in order for the Government to pay for your nursing home stay you MUST qualify for Medicaid. Medicaid basically limits your cash accumulation to $2,500 and also restricts one’s income from all sources to a limited amount and will require that the patient and/or their family pays for part of their care with the excess income. This is a hard dollar amount and does not allow the homeowner to accumulate money for repairs and maintenance, taxes, insurance utilities, loan payments, etc. There are limits on the value of other types of assets which have to be divested in order to qualify. When it comes to a home there is no limit on the value of a primary residence that you would return to if you were able to do so. However, when you pass Medicaid will look back at (currently 5 years) any divestiture of assets including your dwelling. So even if the parents deed their home to a child, a minimum of five years must pass before the home is not considered to be the parent’s asset. The same goes for stocks, bonds, bank accounts etc. Like a dog on a bone, Medicaid will investigate any transaction that they feels violates their transfer restrictions.

My recommendation to the OP is to schedule appointment for you and your parents with an attorney who specializes in Medicaid issues and solicit their advice and guidance. The cost of an hour or two of consultation with an expert may save you hundreds of thousands of dollars in the long run if you either do nothing or do something wrong.

In my opinion a reverse mortgage is not the best route for your parents to go. If your dad’s health issues are more mental than physical an assisted living arrangement may be a better option. Assuming they trust you they may want to transfer their home or the sale proceeds to you to administer their financial matters. Whatever you do please, please, please seek advice from a competent professional.