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My mom is 91, just fell 3wks ago and broke her hip. She was already with other medical issues. My step father has dementia. We have 24/7 care, running us around $6,ooo a wk. Money is starting to run out, we dont want them to be separated or leave their home, my mom has begged me not to do that, I gave her my promise. We are looking at a reverse morgage. I am the POA, but what if my stepfather can not sign the papers? I dont have a lawyer, and wonder if anyone has any advise? I am going to contact a lawyer, what kind do you suggest?

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Graves, welcome!

Is your mom currently in rehab?

An eldercare attorney is what you are looking for. You want one with certification :
https://nelf.org/

and you want one who is familiar with Medicaid in your state.
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There is such a professional as a Medicaid Planner, although I don't know how common they are (I found one in south FL). You may want to also consider an accountant or financial advisor. Unless their home is worth a lot (like at least 1 million) I'm not sure even a reverse mortgage will last long for 2 people needing 24/7 care...and then what? They''d be moving somewhere else (and please -- not your house). At that point a facility will cost less monthly and you won't be worn down to a stub.

Many a loving adult child was made to "promise" against NH care, but IMO this does not stand because they don't have any idea of what they are agreeing to -- and it's mostly based on the elder's past (bad) experiences with NHs or ignorance about modern ones. Many today are so much better. They'd get all the care they need plus social exposure, and the facility will most likely allow them to be together if at all possible. Transitioning them (at some point) to facility care does not mean you don't love them. It's just the reality of the situation and the only real solution based on their finances.

Please do not not not even think about mortgaging your own future in order to appease this unrealistic demand. Do research, talk to professionals and go into it with your eyes wide open. Start by reading posts on this forum under the topic Caregiver Burnout.
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rovana Oct 2021
I agree about such promises. I don't think they are binding because in nearly every instance, there is an element of guilt coercion, which would invalidate a promise. But really, how can anyone promise such a think when the future is unknown?
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Get an elder care attorney. Place them in a facility. Get them the care they need, not what they want.
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Live247 Oct 2021
Yes, you make an important distinction - what they need rather than what they want. The elders can't imagine what they need, they just seem to want nothing to change or at least remain the same as they remember it, which is not possible when their needs are so great and money is so finite.
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A reverse mortgage can be a workable solution IF certain conditions are met. The primary condition is "will the money last". Also, consider the reverse mortgage will be due when they no longer occupy the home. So what happens when one dies and the other needs a facility placement? People in their 90s could still live for another 5-10 years and your step-father with dementia will likely have more difficulty adjusting to a new situation as time goes by. A Memory Care (MC) that allows married couples to share a room might be a better choice allowing each parent to have the care they need while remaining together. Many will allow them to remain on Medicaid after a period of private pay.

If no one has your step-father's POA, someone may need to gain guardianship in order to mortgage the home or sell it.
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$6,000/week = $35.71/hour. Seems very steep to me, but I guess it depends on the area of the country and the level of care. That would pay for a VERY nice assisted living apartment plus some extra help beyond what the AL place provides, assuming the house is worth a decent amount and can be sold. Find some place that allows for transition to a MC unit if/when stepfather needs it or to LTC if either person needs that level.
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I looked at this as a math problem, which it is, then did some reverse mortgage calculations based on current rates and offers.

You say the current living-at-home expense is $6000 / week (!). For one year, that is $312,000. If the house is worth $1.5 million, you can get almost enough out of it to cover that weekly cost in the first year. The second year the house value for the reverse mortgage will run out in about 9 months. So, you will get not quite two years of reverse mortgage revenue to keep them in their home as-is. That is not a lot of time. What is their house really worth? Adjust the numbers from there. There are online calculators to help you estimate. Remember, the reverse mortgage companies have to make money, too, or they couldn’t do this, so consider you are giving up value of the house compared to selling it outright.

Whatever you do, make sure you do the math and read *every single word* of the paperwork. And figure out what you will all do when that money runs out. My mom is your mom’s age, 91. She broke her hip a year ago, and is still doing well. Actuarial calculations from the US government Social Security Administration suggest she could live to be 96. A major insurance company suggested she could live to be well over 100. So, consider carefully the best use of their assets to make them most comfortable and happy for the maximum amount of time, rather than burning through all the resources too quickly in an unsustainable way.

I do understand those promises, though.
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Graves, you're wise to raise these issues before moving forward, and there are a lot of issues.   Get a cup of coffee, or glass of lemonade as this will be long.

1.   Legal issues.    Barb's right; find an elder law attorney.  If you need suggestions on how to locate one who's reliable and experienced, post again.  I spent almost all my working life in the legal environment, private sector mostly but some governmental work as well.

2.   Do research on reverse mortgage firms; compare interest rates, reputations, and as much as you can learn about each of them.   AARP may have some online information to share.  There are some shysters out there.  

3.   Estimate how much money you could get.  Geaton777 raises a good point, i.e., sufficient funding for as long as possibly needed, and as we both know, that could be years or decades.   

4.   If you can't get a reverse mortgage that theoretically would last for the remainder of their lives, what other options would you have?   TNTechie raises good points, as this scenario may actually come into play.   (Have you contacted Medicaid  yet?)

5.   The RM scenario raises the issue of who would be mortgagors (borrowers)?  Your mother would have to sign, but if your stepfather has dementia, based on his cognizance level, he may not be able to execute legal documents.   Do you have medical support or advice for his level of cognizance?  Would he understand the implications?

6.   If you're asked or told by a RM company that you have to sign, individually, be wary. If you sign, it should be only pursuant to authority under a DPOA, not a limited POA.   This could be raised with an attorney to ensure that you do have that authority.   Do NOT sign a separate Guaranty and don't even consider guaranteeing the loan.

7.   You and your family should NOT be co-signers, as that would obligate you to make payments, including after your parents pass, and may affect your credit rating.   Your mother and stepfather should be the only mortgagors, with obligations limited to them.   That would protect you from a payment commitment.  

8.  You queried what would happen if your stepfather can't sign?   The alternatives I can think of are that just your mother would sign, or if he's executed a DPOA and authorized you to sign, you could sign as proxy, but ONLY as proxy for him.  

This is where an RM company could become manipulative, advising that you (and husband?) must guarantee the loan.   That would obligate both of you under circumstances which would be defined in a Guaranty, a separate document than the loan documents.

8.   I'm assuming that your mother is in rehab post hip break?   That's the best way for her to recover, followed by home care through an agency.  

9.   Check out what assistance might be available through your community in terms of home adaptation.    I don't know if this is still applicable in my community, but years ago it annually received a HUD grant to help residents in need with various home improvements.   The County also has a home improvement program.   The interest rate was nominal, and the indebtedness was forgiven on death.

This could help with in-home adaptations, such as grab bar installation, ramp, etc., depending on the current scope of included work.

If you have questions, feel free to ask; nothing is off limit for explanation when you're facing a financial situation such as you describe.

ETA I didn't see the most recent 2 posts until after I completed mine. I was in no way intending to ignore their suggestions.
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I wouldn’t worry on his ability to sign the paperwork as RM tend to be somewhat casual on this. I would be concerned if he could do the required “counseling session” with a Q&A in order for the loan to be completed. Each of them would need to be relatively competent and cognitive to do counseling. If it’s a federally backed RM, those loans are strict about participation. If mom is on pains meds, those often cloud judgement and your are told not to do anything legal till drugs have run their course.

if all this is in reaction to your moms recent fall, just 3 weeks ago, I’d really really REALLY suggest that you give it another few weeks to better determined exactly what her needs will be and just how much step dad dementia increases due to moms change in abilities. That 6K may not be enough $ to deal with 2 elderly per week.

RM imo are generally a bad idea, my thoughts why:
1. Not enough $ to pay for in home care needed
RM tend to actually pay out 50%. How long would that $ last along w/ their current income to pay for 24/7 in home care for TWO elderly? I’d suggest that you find out to exactly what “Value” the RM will use. It could be their current tax assessor $ amount or that the RM will require an appraisal beforehand. If house has lots of delayed maintenance, it could actually come in way under assessor value, as assessor value is based on comparables of recent sales which likely have reno homes in the same zip code. It could be even less $ than initially anticipated.

2. compliance issues for house:
So what shape is their home in? And what is their insurance currently like? RMs require the homeowner to be current on all hazard insurance’s and pay taxes and do whatever maintenance and upkeep needed on the house. Do they have the $ for this and pay for 24/7 caregivers? The insurance will have to be for whatever the value of the house the loan is based on. So if it’s 200k RM on 400k home, they will now need 400K of homeowners insurance plus any other insurance for your area like flood, windstorm, earthquake. If mom was used to paying $678.90 annual for HO on her paid up home, that’s not happening. They will need new peril coverages. RM may offer to wrap this in the loan…. But it will be a more expensive cost.
On the maintenance, they have to keep the house up. So if a hail storm comes thru, they will be required to get roof repairs / replacement done. Should taxes not be paid, or obvious maintenance not done, the RM can call in the loan. Like 90 day demand and if not done, the loan is due in full or RM acquires the home and puts it up for sale.

The RM is guaranteed from the feds whether or not the elder lives there. It is not to their advantage to be all nice and understanding on why maintenance isn’t being done or property taxes were paid late.

3. do you live in the home so need to continue living there after they both die? If so, you have abt 6 mos to come up with funding to pay off 90% of loan & all fees if it’s a federally backed RM. Fees could be quite a bit.

Waiting to sell to family or having elderly live there forever is not in the RMs best interest; they need elder out & then sell asap (usually to flip) & get balance (if still is one) from the feds.

Just what’s the situation with step dad? If mom predeceases him, what are you going to do about his continuing to live there? If he has kids or heirs, they could be quite difficult on this should you want him forced into a NH. His oversight likely ends up being on you.

where is your mom right now? Most of the time they are discharged from a hospitalization directly to a NH for rehab (all r Medicare benefits). Is mom in rehab & if not, is there a medical reason as to why not?
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How much is the house worth, how much is their equity (that's what you're basically getting out of the reverse mortgage) and how long will it last. At 6K per week, current out of pocket cost, that's a little over 24K per month. If they could get $240K out of the house, that's only about 10 months of care. $480K out of the house would last shy of 2 years.

To stretch the money as far as possible, if you're paying an agency about half the hourly wage goes to the agency and not to the caregiver. Do you know any caregivers that would want to work for you at the rate of pay your caregiver actually receives? You could get an atty to help you setting up the employer/employee contract and advise you on reporting employee taxes.
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There are alternatives to reverse mortgages.

I am a financial planner in Canada. The information I am sharing is general in nature, not specific advice for your parents. I am also an Elder Planning Counselor.

A Home Equity Line of Credit, HELOC, acts as a second mortgage, but is not a reverse mortgage. If the home is fully paid off they may be able to get up to 75% of the equity in a HELOC, it would have interest only payments and would be payable when the house was sold.

But depending on their income levels, they may not qualify unless you or another family member co signed. This is not a good idea.

This frees up more funds than a Reverse Mortgage does.

But the bigger issue is your noble promise to your parents. Dad has dementia, he will get worse in ways you cannot begin to imagine. Mum is falling, having care providers will not prevent further falls. Nor will being in a nursing home.

Is the home fully accessible? Bathrooms etc?

What if the choice for your parents us, you can stay together if you move into a nursing home together now, but if you stay here until all the money is gone, you will be placed at the whim of Medicaid and will not have a choice in where you end up?

Are you POA for both parents? Does your POA allow you to enter into a RM or any other debts on their behalf?
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Goddatter Oct 2021
A point to emphasize most strongly: Do NOT co-sign any loan!

A default does not mean taking over payments. It means the entire due balance is called for immediately.
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Given their current conditions, they may not qualify for a RM. I have no experience with RMs, however they seem like a bad idea. Read through this:

https://www.investopedia.com/mortgage/reverse-mortgage/5-signs-reverse-mortgage-bad-idea/

As others noted, unless this is some really special high value home, they won't get nearly enough to cover their needs for very long. 6K/weeks is a hefty price to pay. My mother lived in a VERY nice MC facility (it had IL, AL and MC) for 4 years and only crossed the 8K/month last year. Your/their state isn't listed, but the cost does vary by region. Some places are higher than this, but others lower.

You REALLY need to get some expert advise about RMs. There are sketchy places that would likely sign them up in a heartbeat, knowing full well they won't be able to meet the required payments (mortgage ins, house & peril insurance, upkeep, taxes, etc) and be able to foreclose. They are NOT going to dab their eyes when they hear of the hardships.

As others noted, simple math gives this a poor outcome. Assuming the place *might* get 500K, that's only about a year and a half of care, excluding any other expenses (ins, taxes, food, utilities, etc.) What then?

The old "promise me you won't put me in a home" is the most cruel thing a parent can do to a child. We don't have crystal balls. We don't know what the future holds. We CAN check out other options, such as a smaller place or an apartment, selling the house and using the proceeds to pay rent/care, but this is still going to cost a bundle, given the care they already needed before she broke her hip.

While getting appropriate advice (legal, financial), check out places in your area. The newer facilities today are nothing like NHs of the past. They can likely remain together, even if stepdad needs MC. There was a couple in mom's MC unit. She had been in another facility for physical issues, but when her husband needed MC, they moved into this place together. She didn't need the MC, but it was less expensive than paying for his MC and her AL and they could be together.

If the RM is the plan, please don't sign anything yourself. Signing as proxy, aka DPOA might be okay, but be VERY careful - if not, you could end up responsible for paying.
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kahill1918 Oct 2021
You're very right in saying we must never make such promises to our parents. The only thing we can promise is to do our best in finding the right thing to do even if it is not necessarily what we want but will be what we need.

This illustrates very well why we must think twice before we accept treatment that will prolong our lives which may not necessarily be a good road.
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Even with a house, your parents can apply for Community Medicaid, which provides them in-home care. Contact a well regarded elder care attorney who is versed in Medicaid, as well as reverse mortgages. Many offer free consultations. Ask around for referrals and research online to be sure the attorney has good credentials. He/she will guide you properly one step at a time. Our opinions or advice are minimally helpful - you need a professional who knows the specifics on your situation.
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1.) If you are the POA, you should be able to sign the papers on his behalf!

2.) I know you promised your parents but at some point, as POA, you have to do what is in THEIR best interest (and yours) financially & medically,. You are not superhuman and and they are not in a frame of mind to objectively assess the situation.

If you contact an Elder Care Attorney they can guide you on Medicaid Planning and asset protection and everything you need to know. Make an appt and it will give you a better perspective on your options and what is realistic at this point.

I promised my dad he could come back with me and I am in the same boat. He was living with me and has dementia which I was managing while still working as a single mom with 3 kids. But he recently had a leg amputated and there's no way I can care for him in the manner he needs and deserves without being neglectful. And I can't afford to stop working. It is always a heart wrenching decision.
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Geaton777 Oct 2021
Just a caveat that the FPoA can only carry out certain types of transactions if it is specified in the PoA document. Buying and selling real estate, stocks/investments, businesses, etc. are "line item" authorities that must be allowed or disallowed in the paperwork.
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Im praying for your situation.
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Whose POA do you have? Is it a full POA including care as well as finances? If its just your mother, then you may need to get guardianship for your step father which requires a judge to grant it after hearing the circumstances. Its too late for a POA if he has been diagnosed with dementia. A lawyer is advised. If your POA is for both, you already have the legal right to sign for their care and finances, including a reverse mortgage. BUT don't forget you have a fiduciary responsibility concerning all their finances including mortgage proceeds. If there are any other relatives with an interest in an estate, make sure you keep good records in case any of them want to look into the situation. While talking to a lawyer, be sure to discuss the status of their home. If assisted living or a nursing facility is best, my understanding is the costs will be based on their financial situation, not yours, and their house may be safe from the calculation of care costs. There is a lot to check into BEFORE you get a reverse mortgage and you need expert advise. In spite of all the TV commercials, a reverse mortgage has so many drawbacks and shouldn't be considered the best option. And you could end up responsible for the mortgage once they leave the house. I suspect you'd have a difficult time anyway with getting a reverse mortgage unless there are co-signers. If the money is going as fast as you say, you could be on the line for thousands and little equity left in the house.
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Camerapom Oct 2021
Excellent advice Rick...As just a reader on this question, thank u for ur great info! R u an attorney or just have a lot of familial experience on this subject?? Thx very much!
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Please take the advice below and contact an Elder Care Attorney. They can advise you of your rights. It was the best thing I could do and glad to do it.
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Get an elder care lawyer, pronto!! Ask if they also handle real estate. Neighbor did a reverse mortgage, after living in her house over 45 years, and within 2 years she was told to vacate, they sold the house from under her!!! BE VERY CAREFUL!!!! Do you have DPOA? Maybe you can find a healthcare facility that would let them share a room...while keeping an eye on them. Although usually dementia patients are in a separate area (they need more care, they wander). Check your County's Healthcare system...usually the best. You can always decorate their rooms with their memories. Your mother won't resent you if you explain that it is getting too hard for you to handle. Keep pictures up in their room and visit them often.
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I had good luck posting for caregivers online. $35.70 an hour is NOT going to caregiver - most going to agency.

Agree with all to find Elder Care Attorney.

It is very difficult to find a nursing home that provides remotely decent living conditions. Yes, there is Community Medicaid which will provide money for care, but it is not very much per hour and, depending on state, does not cover overnight. It will pay for modifications to home (like roll in showers) to make homes as safe as possible.

I am very sorry for your trying situation and that of your mother and step father. She deserves peaceful final days.

I personally would rather pass on than enter a nursing home. Seen too much from having relatives in them for 10 years. Unless you have lived in them (I have), unless you have had relatives there not on Medicare rehab wing but in Medicaid wing (very different care)- you have no idea the abysmal level of care and very poor quality of life. According to Centers for Medicare and Medicaid (CMS), most provide under 2 hours a day of direct care. This totals all staff time to include anyone’s hours who is a nurse (even if they are office/administrative only) and nurse aids divided by patients.

Elder Care Attorney can make you aware of the best options in your state.
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Sofatax Oct 2021
You have not been to the newer ones or else did not visit others to compare. We did for my inlaws and we found one that engages with everyone in the bulding as much as they can.
The one my parents are at seems to need to be checked out by us kids as there are issues that need to be addressed. All the kids are long distance at the moment, so we weren't there when they chose their location.
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Unless this home is literally worth millions and millions of dollars, there is no reverse mortgage that will provide 24,000 a month to allow this couple to remain inhome. That is for a start. Reverse mortgages are very tricky. In some if one or both leave the home for care (something that can happen at any moment in this case) the mortgage is fully payable, involving a need to sell the home.
From almost any aspect this not on does not make sense, but will likely also be impossible for any POA to do. It would involve a very very liberal and complete written POA for BOTH owners of the home, both on title, and here you have two who are not mentally capable of doing this.
This is very very dicey and not something to discuss with any forum, no matter how smart you may think any here might be. This is purely and simply a legal question for which you need the advice of a Trust and Estate AND an Elder Law attorney; this is paid for by your POA for your stepfather. Take your papers to your appointment and a list of your questions. Wishing you good luck.
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Hi, I am a Certified HECM Counselor and know a lot reverse mortgages, having been in the field over 20 years. Many people use the equity in their homes for this exact purpose; to generate proceeds to pay for home care and keeping loved ones out of nursing facilities. Best bet is to contact a Loan Officer for reverse mortgages; you can look on reversemortgage.org/find-a-lender or HUD.gov to find lenders in your state. There is no commitment on your part when contacting a Loan Officer. This person will generate some estimates based on the youngest one of your parents, estimated home value and today's interest rates (its a good time to borrow, since rates are low and have tight caps). You will then know how much of the equity you can tap into. If your parents are in their 90's, they may be able to access ~70-75% of the equity. At $6K/week you can figure out how long you can spend the proceeds down. The loan is due after the last one of them passes away or permanently moves out of the home to a facility. If one parent has dementia, and there is a POA in place, you will need a Doctor's letter stating that the POA has to be activated for this purpose. Poke the tires and find out, at minimum, what kind of funds would be available. It takes about 6-8 weeks to process; sometimes the process can be faster if there is an urgent need. Good luck.
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Graves30:
Sorry about your difficult situation. Please contact an eldercare attorney right away in your State and County to discuss the reverse mortgage options BEFORE making any decisions. Unless your parents have sufficient property equity for their care and home upkeep, plus their income will help, their money may run out. Also think about what may happen to their home if your mother and/or stepfather needs to move into a NH and never return home. And do not co-sign any type of loan without careful discussions.
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You need a elder attorney I got the name of a reputable one from my chiropractor they can help you with Medicaid .
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Break the promise and sell the house, or stop the high-cost 24/7 care and replace it with something else.

Reverse mortgage comes due if she leaves the house (vertical or horizontal) and they check every few days at age 91. The property taxes and insurance (especially skyrocketing flood insurance in some areas) can also cause them to act.
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igloo572 Oct 2021
Vertical or horizontal lol!

True RM story, after H. Katrina couple of friends of ours had parents living in Lakeview area of New Orleans. LSS Lakeview stayed flooded 4’-10’ for about 3 mos & lots of homes were slab on grade 1950/60s ranchburgers so water to or above roofline. Science fiction level of mold. For all, the insurance (HO, NFIP) had RM listed as a payee as it is securitized lending. So any insurance checks would have BOTH owner & RM name on checks. Owners signed check and then sent off to mortgage holder and in theory they sign and return. None of the RM released any insurance funds, they kept the checks. RM expected owner to do whatever to secure the property asap & at their own expense (like get blue roof or a dry-in done & mold remediation) and come up with a timeline of repairs & when utilities on & with estimates and only then would the insurance proceeds get released. And if not done pretty quick, RM was within the loan agreement to call in the loan in full. They would use the insurance $ toward the call in too. All had loans called in.

And to make matters even worse, none of the kids knew their folks had taken out RM. The parents weren’t really old, like in their late 70’s - early 80’s, they bought homes when Lakeview was built & owned them outright. They just though of the RM as a easy line of credit to just have. They had proper insurance. There just was no way to get repairs, remediation, power up within the timeframe in the agreement. The RM would not do extensions either. It was totally predatory.
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Graves30: Imho, while they seem like a grand plan, Reverse Mortgages are not what they may seem since this mortgage loan will have to be repaid - when the time comes. That's correct - you would be borrowing against the equity of the home and that loan becomes due by the heir of the RM. It is very wise for you to seek counsel in the form on an elder law attorney about the legal ramifications of a Reverse Mortgage.
Disclaimer: I do not profess to be a seller of RM's, nor am I an attorney as there are some on this thread who are pro RM's. I am merely responding to the OP's question(s).
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Short answer - Don’t do it. I’ve seen more than a few that have turned out really bad - for everyone except the RM company and the loan originator.
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Reverse mortgage has you repay it once house is sold later and the problem is many houses devalue and are not worth what the loan was. Check into house value and the value of surrounding homes selling prices. IF the town is in decline and houses are selling low- then it is going to be a problem.
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igloo572 Oct 2021
If it’s a federally backed RM, it doesn’t matter. RM lender gets the $, it’s guaranteed by the feds. They get the paperwork to acquire the house done ASAP and then sell that dog of a house ASAP (to a flipper / investor) with any difference on the loan and it’s fees paid by the feds.

RM companies don’t loose out.

Now if the family or heirs want to actually buy the place, they have to come up with $ in full and quick. It rarely imo makes sense to do. Might could if the property has appreciated in value beyond huge AND heirs have cash on hard to pay in full the RM amount (I think it’s at 90% for heirs)
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Don’t do it.
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