Aging in Place- the next 30 years
This is a great article written about how our society needs to deal with the aging population over the next 30 years.
The article is timely for people over 55 - their families, realtors, builders, and home care agencies.
I hope you enjoy it!
Diane
Showing posts with label aging. Show all posts
Showing posts with label aging. Show all posts
Monday, March 31, 2014
Tuesday, August 27, 2013
Are reverse Mortgages the Answer for the Elderly?
Is a reverse mortgage the answer for elderly homeowners
Dear Attorney Tully: I am a widow and I see a lot of ads on TV
regarding reverse mortgagees. It sounds great, but I am not sure. I
would like to stay in my own home and am not interested in selling, but
my health is failing. I could use extra money to help with my health
care costs. What do you think?
ANSWER: With any financial and legal transaction you should take your time and consider the pros and cons. Do your homework and don’t let anyone put the hard sell on you. The reverse mortgage program is becoming more popular and accepted by seniors. In a nutshell, a reverse mortgage is a way to use the equity in your home and not have to make a monthly payment as long as you live in your home. Under our “system” of paying for a long term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there’s little public assistance for home care. Most people want to stay home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home.
If you own a home and are least 62 years old, you may be able to quickly get money to pay for long term care (or anything else) by taking out a reverse mortgage.
Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan payments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home or nursing home care if it becomes necessary. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out.
In a reverse mortgage, the homeowner receives a sum of money from
the lender, usually a bank, based largely on the value of the house, the
age of the borrower and current interest rates.
For most loans you need to qualify with your income and assets. This is not the case with reverse mortgages. Homeowners can get money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn at the borrower’s option or in a series of regular payments, called a reverse annuity mortgage.
Although it is often assumed that seniors would want to use the funds from a reverse mortgage loan on health care, there are no restrictions — the funds can be used in any way. For instance, the loan could be used to pay back taxes, for house repairs or to retro-fit a home to make it handicapped accessible.
Borrowers who take a reverse mortgage still own their home. What is owed to the lender — and usually paid by the borrower’s estate — is the money ultimately received over the course of the loan, plus interest. In addition, the repayment amount cannot exceed the value of the borrower’s home at the time the loan is repaid. All borrowers must be at least 62 years of age to qualify for most reverse mortgages.
In addition, a reverse mortgage can be taken out if there is prior debt against the home. Either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt.
Attorney Daniel O. Tully is a partner in the law firm of Kilbourne & Tully, P.C., members of the National Academy of Elder Law Attorneys Inc., with offices at 120 Laurel St., Bristol, (860) 583-1341. If you have a questions for attorney Tully, send it to him at Kilbourne & Tully, P.C., 120 Laurel St., Bristol, CT 06010. He’ll filter through the questions and may use some as the basis for future columns.
ANSWER: With any financial and legal transaction you should take your time and consider the pros and cons. Do your homework and don’t let anyone put the hard sell on you. The reverse mortgage program is becoming more popular and accepted by seniors. In a nutshell, a reverse mortgage is a way to use the equity in your home and not have to make a monthly payment as long as you live in your home. Under our “system” of paying for a long term care, you may be able to qualify for Medicaid to pay for nursing home care, but in most states there’s little public assistance for home care. Most people want to stay home as long as possible, but few can afford the high cost of home care for very long. One solution is to tap into the equity built up in your home.
If you own a home and are least 62 years old, you may be able to quickly get money to pay for long term care (or anything else) by taking out a reverse mortgage.
Reverse mortgages, financial arrangements designed specifically for older homeowners, are a way of borrowing that transforms the equity in a home into liquid cash without having to either move or make regular loan payments. They permit house-rich but cash-poor elders to use their housing equity to, for example, pay for home care while they remain in the home or nursing home care if it becomes necessary. The loans do not have to be repaid until the last surviving borrower dies, sells the home or permanently moves out.
For most loans you need to qualify with your income and assets. This is not the case with reverse mortgages. Homeowners can get money in one of three ways (or in any combination of the three): in a lump sum, as a line of credit that can be drawn at the borrower’s option or in a series of regular payments, called a reverse annuity mortgage.
Although it is often assumed that seniors would want to use the funds from a reverse mortgage loan on health care, there are no restrictions — the funds can be used in any way. For instance, the loan could be used to pay back taxes, for house repairs or to retro-fit a home to make it handicapped accessible.
Borrowers who take a reverse mortgage still own their home. What is owed to the lender — and usually paid by the borrower’s estate — is the money ultimately received over the course of the loan, plus interest. In addition, the repayment amount cannot exceed the value of the borrower’s home at the time the loan is repaid. All borrowers must be at least 62 years of age to qualify for most reverse mortgages.
In addition, a reverse mortgage can be taken out if there is prior debt against the home. Either the old mortgage must be paid off before taking out a reverse mortgage or some of the proceeds from the reverse mortgage used to retire the old debt.
Attorney Daniel O. Tully is a partner in the law firm of Kilbourne & Tully, P.C., members of the National Academy of Elder Law Attorneys Inc., with offices at 120 Laurel St., Bristol, (860) 583-1341. If you have a questions for attorney Tully, send it to him at Kilbourne & Tully, P.C., 120 Laurel St., Bristol, CT 06010. He’ll filter through the questions and may use some as the basis for future columns.
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Friday, November 4, 2011
Medicaid Asset Recovey - Important Information
MEDICAID ESTATE RECOVERY
What Seniors Should Know
What is Estate Recovery?
Not many people are aware of the 2009 Estate Recovery act enacted by the Federal Government that places the largest asset the family owns (their home) in jeopardy of a Medicaid lien. When I tell people about this law they are unaware of it. So I did some research and found this information on the West Virginia Attorney Generals website. This validates the information I've been giving seniors for several years.
"Estate Recovery is a collection program required by a Federal law (42 U.S.C.
§ 1396p). This law requires all States to “recover” money spent by Medicaid on
“long-term care” (nursing-home or home and community-based care) by collecting
it from the estates of people who received such care after reaching age 55. Most of
the money collected goes to the Federal government, not the States. States that fail
to implement Estate Recovery collections can be cut-off from Federal Medicaid
funding, but no State has yet been penalized for failure to properly implement the
Estate Recovery requirements.
% Estate Recovery does NOT create a debt owed by the deceased Medicaid recipient’s
heirs, but rather creates a claim or lien only against the assets in the
deceased’s estate. The State Medicaid agency (called the “Bureau of Medical
Services”) files a claim against the estate and can enforce it in the same manner
as any other creditor of the estate.
% Many assets that were exempt for purposes of determining Medicaid
eligibility (such as the home) are no longer exempt after the Medicaid-recipient
dies, and are subject to Estate Recovery.
% The maximum amount of an Estate Recovery claim is the value of the estate,
or the amount spent by Medicaid on long-term care after the deceased recipient
reached age 55, whichever is less. If the assets in the estate are insufficient to
pay the claim, the remainder of the claim is extinguished and does not
constitute a debt".
As a reverse mortgage specialist I help people "Age in Place". I have worked as a clinician in hospitals and nursing homes. So my personal agenda is to help people stay there by providing the financial means to do so. The Estate recovery act allows state to attach a lien to the property of individuals who receive Medicaid benefits. If a person secures a reverse mortgage they protect at least 60% of that asset against this Medicaid lien. The state can only attach whatever remains after the reverse mortgage is paid. I always ask seniors and family members if they have long term care insurance. Most people do not because it is cost prohibitive. So the only way to protect the asset is with a reverse mortgage.
While I'm not an attorney it seems the message is clear. If someone is unable to pay the $7,000 nursing home fees and goes on Medicaid they are going to allow the government to place a lien on their property. It usually doesn't take long for the equity to evaporate that took a lifetime to build.
What Seniors Should Know
What is Estate Recovery?
Not many people are aware of the 2009 Estate Recovery act enacted by the Federal Government that places the largest asset the family owns (their home) in jeopardy of a Medicaid lien. When I tell people about this law they are unaware of it. So I did some research and found this information on the West Virginia Attorney Generals website. This validates the information I've been giving seniors for several years.
"Estate Recovery is a collection program required by a Federal law (42 U.S.C.
§ 1396p). This law requires all States to “recover” money spent by Medicaid on
“long-term care” (nursing-home or home and community-based care) by collecting
it from the estates of people who received such care after reaching age 55. Most of
the money collected goes to the Federal government, not the States. States that fail
to implement Estate Recovery collections can be cut-off from Federal Medicaid
funding, but no State has yet been penalized for failure to properly implement the
Estate Recovery requirements.
% Estate Recovery does NOT create a debt owed by the deceased Medicaid recipient’s
heirs, but rather creates a claim or lien only against the assets in the
deceased’s estate. The State Medicaid agency (called the “Bureau of Medical
Services”) files a claim against the estate and can enforce it in the same manner
as any other creditor of the estate.
% Many assets that were exempt for purposes of determining Medicaid
eligibility (such as the home) are no longer exempt after the Medicaid-recipient
dies, and are subject to Estate Recovery.
% The maximum amount of an Estate Recovery claim is the value of the estate,
or the amount spent by Medicaid on long-term care after the deceased recipient
reached age 55, whichever is less. If the assets in the estate are insufficient to
pay the claim, the remainder of the claim is extinguished and does not
constitute a debt".
As a reverse mortgage specialist I help people "Age in Place". I have worked as a clinician in hospitals and nursing homes. So my personal agenda is to help people stay there by providing the financial means to do so. The Estate recovery act allows state to attach a lien to the property of individuals who receive Medicaid benefits. If a person secures a reverse mortgage they protect at least 60% of that asset against this Medicaid lien. The state can only attach whatever remains after the reverse mortgage is paid. I always ask seniors and family members if they have long term care insurance. Most people do not because it is cost prohibitive. So the only way to protect the asset is with a reverse mortgage.
While I'm not an attorney it seems the message is clear. If someone is unable to pay the $7,000 nursing home fees and goes on Medicaid they are going to allow the government to place a lien on their property. It usually doesn't take long for the equity to evaporate that took a lifetime to build.
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