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Reverse Mortgages and Your Heirs

A reverse mortgage is a non-recourse loan that is available for homeowners who are at least 62-years of age. Homeowners with equity may be able to take a loan on the home’s equity without any obligation to pay it back during their lifetime, as long as they continue to live in the property.

When the last borrower dies, the estate has no obligation to repay the loan, even if the loan amount exceeded the property’s value. The difference is made up by reverse mortgage insurance guaranteed by the Federal Housing Administration (HUD) through a Home Equity Conversion Mortgage.

A reverse mortgage can be a good idea under some circumstances. If the homeowners are in considerable debt, then the loan may be used to pay these debts in full. or the homeowner could choose the option to receive monthly payments and use these payments towards their monthly living expenses.

When the surviving homeowner dies, the heirs have a few options. Some heirs may be unaware of these options; the lender should notify them that the loan payments have ceased and the loan must be paid back within twelve months.  After the twelve months, the lender will have the home appraised. The heirs should have 30-days from the time of the appraisal to decide on one of these options:

  1. Pay off the loan at no more than 95% of the appraised value; or
  2. Sell the house and recoup any remaining equity after paying off the loan balance, or
  3. Turn the home over to the lender after signing a deed in lieu of foreclosure and walk away with no further obligations

If the heirs elect to buy the property, they must arrange for their own financing if they are not paying cash. This process should be expedited, if possible, since the premiums to HUD and the interest on the balance of the loan will continue to accumulate and cut into any remaining equity.

The heirs only have to pay 95% of the appraised value. For instance, if the property is appraised at $100,000.00 and the loan is $200,000.00, the heirs need only pay $95,000.00 with the remaining sum payable by the federal insurance fund.

If you or your parents are considering a reverse mortgage, consult with an experienced real estate attorney who can assess your situation and advise you on what to expect and how to proceed.

Consult Real Estate Attorney Patricia Bloom-McDonald

Patricia Bloom-McDonald is more than just a real estate attorney. She has been representing and advocating for the rights of the elderly since 2003. A reverse mortgage can help some homeowners, but they need to be aware of all the ramifications. Contact Attorney Bloom-McDonald for a free, one-hour consultation if you are contemplating a reverse mortgage or for estate planning matters.

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Long Distance Caregiving What You Need to Know

We all want our elderly loved ones to live near us, but that is not always possible due to where our jobs are located or other circumstances.  We often find ourselves many hours or days away from where our parents are living. Our loves ones may also be living in a facility. In any case, we want to remain connected and to take charge of, or be well-informed of, the care your loved ones are receiving.

This can be a difficult undertaking if impromptu visits are not possible. But there are several things you can do if long distance caregiving is your reality.

  1. Be well-informed. Know all you can about your loved one’s medical condition and needs. Gain access to your family member’s medical records or obtain Power-of-Attorney in situations where it is advised by your elder law lawyer. A Health Care Proxy with Advance Medical Directives, with HIPAA designations, will give you the authority to speak to the medical providers and to make medical decisions if your loved ones cannot make them themselves. If there are other siblings, have one person take the lead and be the one who talks to the medical providers and accumulates the medical records. Be organized and have them readily accessible to other family members for review. This can be valuable for all caregivers such as social or geriatric care workers.
  2. Plan your visits. Try to make visits on a set schedule such as once or twice per month, if possible. You will want to make the most of your time together by finding out what your family member may need such as new clothes, furniture, new appliances, repairs around the house, or whatever else is a priority. You can plan on seeing certain movies, going to a concert, hairdresser, visiting a favorite restaurant, seeing a play, art gallery, bookstore, or any other event that your family member would like to see or experience. You may also want to plan your visits when your family member has a medical appointment or will be undergoing a medical procedure. Take the opportunity to make other appointments as needed when you are visiting.
  3. Stay in touch with the care facility. If your loved one is in a nursing home or assisted living facility, schedule periodic teleconferences with the staff to get a progress report on your relative’s health, social interactions, and other activities. If there are concerns, make notes so you can discuss it with other family members. If your parent is still at home, stay in touch with a friend who lives nearby who can regularly visit or stay in touch with your parent and who can give you an honest assessment of how they are doing
  4. Is other assistance needed? There are many services for your elderly parent such as meal services and grocery stores that have online sites where you can shop online and have groceries delivered free of charge. Local Elder Affairs, Social workers who work with the elderly, or geriatric care managers can help facilitate this and other services.
  5. Be aware of signs of trouble. When visiting or talking on the phone to your loved one, be cognizant of changes in mood or memory. Nursing facilities can make mistakes, such as how medications are given, or not maintaining a clean environment, or ignoring signs of dementia or other illnesses, like UTI’s or low grade fevers. Instances of verbal and physical abuse are not uncommon. You know your parent better than anyone and can likely tell if your loved one is beginning to show signs of cognitive decline. If so, immediately contact the primary medical provider. If you notice signs of bruising on your loved one’s arms or legs including restraint marks, or that the room is not being cleaned, or your loved one appears withdrawn or fearful of staff, it is time to make serious inquiries and report your concerns to the Ombudsman.

Caring for an elderly loved one, whether they live nearby or not, takes time and dedication. You cannot do everything on your own but if you are organized, well-informed, have other professionals involved,  know what services are available, and carefully plan out your visits, then even long-distance caregiving can make it seem that you are much closer and your visits more rewarding.

Consult Elder Law Lawyer Patricia Bloom-McDonald

With more than 28-years of legal experience dealing with issues that primarily are of concern to the elderly, Attorney Patricia Bloom-McDonald can counsel, advise, and represent you in estate planning, probate, real estate, and other elder law issues. Call Attorney Bloom-McDonald for a no cost, one-hour consultation, to discuss any of these matters.

8 Rules for Writing a Holiday Letter While Caregiving

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The holiday letter has traditionally been a way of letting extended family and friends know what’s going on in your life and the lives of your immediate family. While not everyone decides to send a December dispatch, many people do, particularly when an elderly loved one who is ill or can’t travel is involved.

The key to a well-written holiday letter is maintaining a delicate dance between truth and embellishment, reality and aspiration. Achieving this balance is a tricky task regardless of your circumstances, but it becomes even more difficult if you’re responsible for taking care of an aging loved one.

How do you tell friends and family about Mom’s declining health? Do you have to feign optimism for the sake of appearing calm and in control? What do you say to family members who you feel have abandoned you? If you feel compelled to write a holiday letter to friends and family this year, keep the following pointers in mind.

Make Your Own Rules This Holiday Season

Your first step is to stop, take a deep breath and decide whether you really want to write a holiday letter. Even if your yearly missive has been a fixture of the family festivities, you shouldn’t feel as though you have to keep doing it just because it’s a tradition.

“The holidays are a great time to stop and reflect on life,” says Cindy Laverty, caregiver coach, radio talk show host and author. “The year I chose not to get caught up in all the hype, everything changed for me. I began making my own rules.”

As a caregiver, you have enough on your plate already. Tweaking your holiday responsibilities so that you can actually enjoy this time of year is not just understandable, it’s often necessary. If you decide to go through with this plan, make sure you’re writing your letter for the right reasons. In other words, you’re doing so to update family and friends, to reminisce about the events of the past year, and to re-connect with people you may have fallen out of touch with. Letters that arrive with a wholly negative spin, even though they may be honest and heartfelt, are not likely to be received well or reciprocated.

What Story Do You Want to Tell?

Before putting pen to paper (or fingers to keyboard), Laverty says you should ask yourself one question: “What would I write about my life and caregiving if this was the last holiday I spent with my loved one?”

Use this question as a starting point to determine the purpose and tone of your letter. It also helps to brainstorm some highlights or events that you want to mention in your letter before you begin writing.

Dos and Don’ts for Holiday Letters

Laverty offers the following suggestions for how to appropriately address sensitive caregiving topics in a holiday letter.

  • Do: Discuss Your Caregiving Responsibilities
    While it’s important to realize that you are more than just a caregiver, it’s equally as important to acknowledge the valuable role you play in safeguarding your loved one’s health and wellbeing. As long as you feel comfortable talking about the caregiving aspects of your life, don’t hesitate to include them in your letter.
  • Don’t: Engage in a Gripe Session
    According to Laverty, it’s essential to avoid using a holiday letter to lash out at those who may have been less than supportive of your caregiving. “This is not the time to try and make people feel guilty for not being there for you,” she says. However, this doesn’t mean you have to make caregiving sound like a breeze. Just be honest and keep things light.
    Laverty offers the following example of how to tackle this tricky subject:
    “As many of you know, I’ve been my Mom’s caregiver for the past year, and it hasn’t been easy. The good news is that I’ve learned a lot about Mom and about myself. Truthfully, some days are easy, others are more difficult, and some days I’d rather forget. If you ever become a caregiver, I’d be happy to share some of the tips and tricks I’ve discovered along this journey.”
  • Do: Talk about How Your Loved One Is Doing
    Friends and family—especially those who don’t communicate with you very often—will appreciate being updated on how a loved one is faring. Is Mom attending a new adult day care center that she enjoys? Has Dad made some progress in his rehabilitation since his stroke? Share the milestones and little victories that you and your loved one have had over the past year.
  • Don’t: Overshare
    Toeing the line between being honest and bogging down your readers with unnecessary details can be challenging. Because you are the one on the front lines, it can be hard to take a step back and figure out what to share and what to leave out. Laverty suggests keeping things simple. Share a few updates from the past year, mention something that you and your loved one are looking forward to over the holidays or in the new year, and emphasize that it would be nice to reconnect via phone or in person. If you want to give family and close friends an easy-to-understand update on your loved one’s overall condition (i.e. mood, memory, eating, sleeping, finances, etc.), you may want to consider filling out a care report and sending it along with your letter.
  • Do: Send Your Letter to Family and Friends
    After you’ve drafted your letter, you may be stumped when it comes to putting together your mailing list. The best way to determine whom to send your holiday letter to is to ask one simple question: Would you enjoy reading a holiday letter from this person? If the answer is yes, then they’d probably be a good addition to your list.
  • Don’t: Include everyone
    When it comes to holiday updates, close friends and family members should make up the bulk of your audience. If you really want to send a gesture to let someone know you’re thinking of them this season, but your full update seems like overkill, just opt for a themed or blank card with a short greeting inside.
  • Do: Reach Out
    One great thing about sending out a holiday letter is that it can help you reconnect with people you may have fallen out of touch with. Laverty suggests sending a personal note along with your letter to certain people, saying that you’d like to talk on the phone sometime or catch up over a cup of coffee. It can also provide you with the perfect entrée to casually ask for help or support.
  • Don’t: Assign Blame
    While it may be tempting to do so, a holiday letter is not the appropriate place to vent. If it helps, you may want to join an online caregiver forum or local caregiver support group to get any bitterness out of your system before sitting down to write your letter. As Laverty says, “If there is bad blood between family members, a holiday letter is not the place to express these feelings.”

Out of any good ideas for Holiday Gifts? This season we suggest that you give your family a gift that can, and will, last generations!

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The holiday season is upon us, and as others rush about the malls and the internet looking for gifts, we can recommend a unique, useful and memorable gift that will be perfect for any loved one: An Estate Plan!

Why is this the perfect gift?  As parents, adult children, and grand-parents, we often wish there was more we could do to protect those we love. Completing our own Estate Planning can provide security and ensure a lasting legacy for the generations that follow. Another way we can extend protection to our loved ones is to encourage them to complete their own estate planning.  After all, everyone over the age of eighteen needs the key documents for healthcare, legal and financial decisions.  In today’s busy lifestyles, they may not have had the time to think about or initiate planning.  They would love to have a great estate plan, but just have not “gotten around to it.” By giving them a gift certificate towards Estate Planning, you could help them realize the following benefits:

· Avoid probate delay and cost

· Name financial and medical decision makers (avoiding guardianship and conservatorship court proceedings – in the case of incapacity)

· Name guardians for minor children

· Hold children’s inheritance for their benefit until they reach a certain age

· Protect assets from divorce and creditors and keep money in your family

· Minimize estate tax

Gift Certificates for Estate Planning are an unexpected gift that shows you care.  It’s easy.  It’s unique.  It’s useful and will send your loved one in the right direction.   They would be the client, not you, so they can be rest assured that their estate planning choices will be honored.

This year, don’t give a gift that will impress for a moment and be forgotten within a week; Instead, give the gift that will protect your loved one—and their loved ones!—and will last for years to come. Give the gift of estate planning.

We are offering gift certificates in increments of $500.00, PLUS we will include a FREE one-hour initial consultation, valued at $285.00. Call our office today and learn more about the greatest gift you can give your loved ones – Peace of Mind.

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The Different Ways to Own Real Estate With Other People

Are you aware of the various ways real estate can be owned?

Tenancy in Common (TIC)

In a TIC, each owner has a percentage interest in the property, which does not have to be an equal interest. For instance, one person may own 60%, another with 30% ,and a third at 10%. As a TIC owner, you are free to transfer or leave your percentage interest in your will to whomever you wish. When you do pass away, your interest goes to your named heir or, if you left no will, the State Statutes will determine inherited ownership interest.  Any of the owners can request the court to partition the property into separately owned parcels if disputes arise.

Joint Tenancy (JTWROS)

With this type of ownership, Joint Tenants with Rights of Survivorship [JTWROS} each of the owners have joint equal ownership interest.  When one owner dies, his or her interest automatically transfers to the surviving owner without the need for probate. It is important that the joint tenancy is explicitly stated in the deed.  If it is not specifically stated then the default is TIC.

If the JTWROS owners die simultaneously, the property converts to a TIC. And when the last remaining owner passes away, (even if by one minute) it transfers to his or her heirs.

You cannot transfer your interest in a joint tenancy in a will to anyone since the Deed takes precedence by the recorded deed, and your interest passes to the surviving owners.  A debtor may be able to force the sale and partition of the property to collect on a debt even if only one owner is the debtor.  This is why a Declaration of Homestead should be elected by all owners of real estate residing in the property.  Owners can also ask the court to partition the property into separately owned sections as they can in a TIC.

Tenancy by the Entirety (TBE)

Only married couples may hold this type of real estate interest. The property cannot be sold or mortgaged without the consent of both spouses. When one spouse passes away, it will transfer automatically to the surviving spouse without the need of probate. Massachusetts law protects a tenancy by the entirety from being sold to pay off a debt or partitioned into individually owned sections without the consent of both spouses.

If a creditor does place a lien on the property, it can ONLY collect when and if the property is sold. If the debtor spouse dies and the property goes to the surviving spouse, the creditor will not be able to collect, and the debt is extinguished.

A TBE can only be terminated by death, divorce, or by the parties’ agreeing to convert the property to a TIC or JTWROS.

Consult Real Estate Lawyer Patricia Bloom-McDonald

Whether you are buying or selling real estate, having an attorney to advise you on the transaction can prevent costly mistakes in the future. How you create or obtain an interest in real estate is equally important. Consult real estate lawyer Patricia Bloom-McDonald about all your real estate concerns to ensure that any transaction is performed with full knowledge of your legal rights and options.