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FDP Forum / Moe's Tavern (_8^(I) / The Other Side of Reverse Mortgages, etc.

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5Strats
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Edmond/OKC

GospelBilly!
Jul 10th, 2018 08:04 AM   Edit   Profile  

I learned yesterday that my late parents (mostly my dad) spent about around 70% of the equity in their house via a reverse mortgage.

During his final years after my mom passed, I told my dad not worry about spending the equity and to just be happy while he's here (i.e., don't worry about me, I'm good).

My older sister wouldn't be happy about this, but I was told last week that she's too far gone with mental illness to know the difference.

I thank God that I did very well financially during my career and thus don't have to depend on by share of what's left after the probate process is completed.

LIFE is strange!

Leftee
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VA

Jul 10th, 2018 08:36 AM   Edit   Profile  

I’m so sorry to hear about your sister. And I’m glad you’re well through this.

My sister, who passed earlier this year, was a year older than me and struggled, often terribly, to live in a group home after our mom passed in 2016.

Now I’m an orphan, by time, but I too am well. I’m also a life-long struggler with depression. But I see my blessings daily and I keep moving forward in the wonderful life I have now.

Our prayers for you. (-:

5Strats
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Edmond/OKC

GospelBilly!
Jul 10th, 2018 08:44 AM   Edit   Profile  

Thanks Leftee, 2017 and 2018 have been extremely challenging years for me any my wife.

Good thoughts and prayers to you too!

I know what a struggle it can be at times if your depression is chronic like mine. Meds can only help so much.

You have to keep "climbing out of the well," even though you know you'll be back at the bottom sooner or later.

Taildragger
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USA

an acquired taste some may never acquire
Jul 10th, 2018 09:02 AM   Edit   Profile  

Though I haven't had to struggle with depression myself, someone very near and dear to me did, so I have some appreciation of how tough this affliction can be.

Thumbs up to you guys and keep forging ahead!

BlondeStrat
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Las Vegas NV

Can't complain but sometimes I still do
Jul 10th, 2018 09:17 AM   Edit   Profile  

A question I can't help but wonder …

You say he, "spent about around 70% of the equity in their house via a reverse mortgage".

Is that a bad thing?

Did he blow it on a boat he couldn't use and it's upkeep?

Or did he use the wealth he had earned throughout life to support his needs for daily living?

In reading the initial post something about the emotional or attitudinal reference is slipping by me.

I do notice this seems to have become more of a depression thread as opposed to the actual title, but I don't pretend to know much about depression. ;)

Leftee
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VA

Jul 10th, 2018 09:46 AM   Edit   Profile  

I think what Dave is saying is that it's all worked out for the best. And in a way that couldn't have been foreseen.

Maybe?

slacker
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Hawkeye Country

Thread crapping is unbecoming
Jul 10th, 2018 09:47 AM   Edit   Profile  

We were starting to think about a reverse mortgage for my parents in law in May.

Mrs. Slacker's mom was very ill with stage 4 lung cancer. My wife was at their house 12-16 hours a day caring for her and she was getting bad enough that my wife couldn't physically care for her (pretty much completely unable to help so my 85 yo FIL and wife were trying to pick her up and hold her while getting her dressed or cleaning up from a bathroom visit).

My BIL was fighting a nursing home because they don't have much $$ and a protracted stay would be a problem financially. A reverse mortgage was a possible solution (or at least a contingency plan), but BIL is in the will as the sole inheritor of the family farm. He fought the nursing home tooth and nail. Many heated arguments between my wife and him ensued.

Well, they finally contacted hospice and on the first visit the nurse said "this woman should be in a nursing home" and immediately started making calls. The next day they moved her into a nursing home. She passed 4 days later.

Long story short, she should have been in a nursing home at least a month before that and the security blanket of a possible reverse mortgage was there if needed. The relationship of my wife and her brother will probably never be the same.

Sorry for the rambling post...it's been a rough 7 months and I've never really vented about this.


mfitz804
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Staten Island, NY

Our resident rational liberal
Jul 10th, 2018 10:08 AM   Edit   Profile  

"You say he, "spent about around 70% of the equity in their house via a reverse mortgage".

Is that a bad thing?

Did he blow it on a boat he couldn't use and it's upkeep?

Or did he use the wealth he had earned throughout life to support his needs for daily living?"

I'll go the opposite way...whether he used it for living expenses or a new boat, or whatever, it's his money/investment, maybe there's an argument to be made for spending your hard earned money on whatever the heck you want when you get older. Maybe that's what EVERYONE should do.

Not if you are the potential beneficiary, of course.

My parents never spent money for years. Now they have plenty. They haven't done a reverse mortgage or anything, just money acquired/saved/invested. My dad jokes whenever he spends a chunk (like the new boat HE just bought), "I'm spending your inheritance". I told him I'd rather have him here spending it that him not here and me spending it.

Me, at this point I have an 11 year old and can't help but think about leaving something behind to "help her out". But god willing, by the time I go she'll be older, established, and she won't need it. Perhaps then I will have a different outlook.

Hammond101
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So. Cal. USA

Jul 10th, 2018 10:15 AM   Edit   Profile  

This could be a possibility for my Mom down the road. Now that Dad is gone she can make ends meet around her home but physically the property is too large. She loves her yard, her roses and her lawns. Taking care of all this and handling snow in the winter is the issue.

A reverse mortgage would provide plenty to hire professionals to do the outdoor work and she could stay as long as she'd like. The other possibility would be sell the home and buy a condo.

Over the years I've seen so many families torn apart over greed when parents pass away. There are those that feel they are owed an inheritance and all others aside they are going to get one. Selfish greed. These people try to manipulate their elderly parents and their health to get a bigger share. What a waste! I was raised to support myself and to plan for retirement not to wait for Mom & Dad to die to inherit their wealth.

Sorry for your loss Slacker. Dealing with family can be difficult. Your BIL seem like a real piece of work.



mfitz804
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Staten Island, NY

Our resident rational liberal
Jul 10th, 2018 10:25 AM   Edit   Profile  

"Over the years I've seen so many families torn apart over greed when parents pass away. There are those that feel they are owed an inheritance and all others aside they are going to get one. Selfish greed. These people try to manipulate their elderly parents and their health to get a bigger share."

No question. I have seen it happen with clients as well as in my own family.

Since I am local plus an attorney, my parents turned to me for all of this stuff rather than my sister. I have gone out of my way to make sure anything and everything is right down the middle, and to the extent my dad doesn't spend all of it on boats, I will continue to do so.

Actually, you can divide up boats too...

slacker
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Hawkeye Country

Thread crapping is unbecoming
Jul 10th, 2018 10:51 AM   Edit   Profile  

I lost my father labor day weekend 2017. My older sister was in the "get as much as she can" mode with my grandma and made off with a bunch of high end jewelry when she was in her last months.

She told the whole family she wanted nothing to do with us, but came out of the woodwork when my dad died.

When my MIL passed, my wifes sister (whom I really like and is generally a really nice person) started in with "mom promised daughter 1 her diamond ring and daughter 2 her emerald, daughter 3...." etc. This was literally while MIL was on her death bed. I was really shocked.

Shrug, my opinion has always been that I'm not entitled to anything. My sister told me she just wants what she deserves...what she's entitled to...her fair share. I tried to explain to her that what she deserves, her fair share, what she's entitled to, is completely up to the person who drew up the will. There are no rules or guarantees.

Honestly, we're all happier with her out of the picture (as sad as that sounds).

5Strats
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Edmond/OKC

GospelBilly!
Jul 10th, 2018 11:28 AM   Edit   Profile  

BlondStrat - You didn’t read my entire OP. I encouraged my dad to spend the money and not worry about leaving anything. He spent it on various things, nothing extravagant, not that it mattered to me.

Taildragger
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USA

an acquired taste some may never acquire
Jul 10th, 2018 11:55 AM   Edit   Profile  

"Over the years I've seen so many families torn apart over greed when parents pass away."

This is why it's important to have a living trust and clear, written, legal instructions/will as well as health directives drawn up while you are still in good health and of sound mind, etc..

This allows whatever assets you leave to be divided among your heirs in a cut-and-dried, equitable fashion (or however you chose) and it also can keep your estate from being subjected to going through probate (a process which almost certainly gives lawyers and the gummint bureaucrats a bigger chunk of your property).

mfitz804
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Staten Island, NY

Our resident rational liberal
Jul 10th, 2018 12:01 PM   Edit   Profile  

"This is why it's important to have a living trust and clear, written, legal instructions/will as well as health directives drawn up while you are still in good health and of sound mind, etc..

This allows whatever assets you leave to be divided among your heirs in a cut-and-dried, equitable fashion (or however you chose) and it also can keep your estate from being subjected to going through probate (a process which almost certainly gives lawyers and the gummint bureaucrats a bigger chunk of your property)."

I've said this before, but...

I worked for an Estate planning lawyer in law school, and asked him for his single best piece of Estate planning advice. His response? "Three words...die with nothing".

With that in mind, I would add to your statement two things:

1) Proper Medicaid planning would take some assets out of your name, put them into the name(s) of people you want them to go to, and it will protect them from the possibility that you wind up in long term care and Medicaid attaches a huge lien.

2) If there's "stuff" you aren't going to use, give it to people while you're both still alive. If you own your great grandfather's watch and plan to leave it to your son, and its sitting in a drawer somewhere and you never even look at it, give it to your son now. Saves any hassle of fighting over it later, and you get the added benefit of actually seeing the person use/enjoy it.

Leftee
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VA

Jul 10th, 2018 12:03 PM   Edit   Profile  

My Les Paul and my Marshall are the very last two things to go. (-:

BlondeStrat
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Las Vegas NV

Can't complain but sometimes I still do
Jul 10th, 2018 12:05 PM   Edit   Profile  

I rereading the initial post along with some of the additional post I am understanding with more clarity. I think I let the word "spent" sway my interpretation a bit too much. Sorry about that. ;)

By the time my parents had both died there was absolutely nothing there to fight about ... I have to admit though there was a bit of knuckle head activity in the final years before my mother passed in 2009.

On second thought there was some discussion regarding which particular coffin might be most appropriate. ;)

(This message was last edited by BlondeStrat at 02:14 PM, Jul 10th, 2018)

Chris Greene
FDP Host

Idaho, USA

I miss Kelbo's
Jul 10th, 2018 12:07 PM   Edit   Profile  

Generally good advice from mfitz. I like using living trusts but nothing replaces meeting with a CPA and estate planning lawyer.

As to reverse mortgages, I know almost nothing about them but it seems like one of the only financial tools to homeowners who didn't prepare for retirement.

mfitz804
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Staten Island, NY

Our resident rational liberal
Jul 10th, 2018 12:34 PM   Edit   Profile  

"Generally good advice from mfitz. I like using living trusts but nothing replaces meeting with a CPA and estate planning lawyer."

Very true. Any advice on the topic not based on your specific situation is by its nature, general advice. These things are very fact specific.

Professionals will know more than you do. I went to law school and have practiced in a different field for 16 years with only minor forays into Estate planning, and I can say for certain, I know only the basics.

"As to reverse mortgages, I know almost nothing about them but it seems like one of the only financial tools to homeowners who didn't prepare for retirement."

This is very true as well. I have seen them more in the cases of older women who got divorced later in life and "got the house" but little else. often times its been someone who expected their husband to take care of them forever and to plan accordingly, only to find out later that he wouldn't and he didn't. Now they own a home, but have no retirement fund, no job, and either no skills and/or no desire to go to work at that age.

It's not the best thing to happen, but surely not the worst. At least they had the equity in the house.

Chris Greene
FDP Host

Idaho, USA

I miss Kelbo's
Jul 10th, 2018 12:49 PM   Edit   Profile  

OK, *now* can we turn this into a gun thread?

;o)


5Strats
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Edmond/OKC

GospelBilly!
Jul 10th, 2018 12:58 PM   Edit   Profile  

Note - Even with a will and trust and no issues, the probate process takes about 12-months to complete.

Taildragger - I don't think probate process cannot be avoided, at least in most states. My father had everything set up through an estate attorney. Maybe Pennsylvania's estate laws are unique but I doubt it. Without a will, the estate is distributed via intestate succession.

Slacker - Sorry to hear about your tough period.

Mo Problems - I was starting to recover from losing my dad and dealing with everything myself (with my wife's help), but 4 weeks ago we learned that our dog has inoperable liver cancer. She's on chemo now and has been doing well, but this hit us like a truck because we love our dog so much (we don't have children).

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