Is putting my mom in a reverse mortgage situation a good idea?

A financial advisor once told me you only need to know 2 things about money. 1. Its very good to die with money.2. Its very bad to live without it. Huge problem for the middle class,if that even exists today, senior. Will my money last? You love your parents so help them the best you can to live in dignity. As for you haters in the comments. Have a tiny bit of heart. cheers

DNHnana: A few considerations come to mind in regard to your question, DHHnana.
#1 Why does your (assumed) elder still have a mortgage payment?
#2 Your elder has a "conditional ownership of said property," e.g. mortgage lien.
#3 If your elder defaults on her mortgage loan, the property goes into foreclosure as it is owned by the mortgage lender, e.g. the bank.
#4 The applicant of the reverse mortgage (in this case, your mother), will be deemed the home must be her primary residence and it is not.
#5 If your mother deceases and since she still has a mortgage lien, you are responsible for making the monthly payments until said title is deeded over to you, e.g. the home is free and clear.
#6 Who is currently paying the real estate taxes?
#7 If the real estate taxes are not being paid, did you apply for real estate tax deferral?
#8 Who is maintaining utility payments?
#9 Is the house going into a "short sale?"
#10 Who is paying the AL the required $12,530.00?

Sorry, I just read your complete post. A reverse mortgage is not appropriate as your mom has to continuously occupy the property as her primary residence in order to obtain a reverse mortgage. She cannot live in an assisted living facility. Sandy Jolley

There are a lot of things to consider when thinking of a reverse mortgage. The only reason ever to get a reverse mortgage is if a reverse mortgage is suitable for your mom - is it the right financial product or will it harm her? You as the consumer need to determine this on your own or with trusted advisors. Neither the salesperson or the HUD counselor can tell you if it is right or will harm your mom. The borrower has to occupy the property as their primary residence - so if there are any health issues that might prevent her from continuously living in the home it's not right. She will still have to pay property taxes, insurance and maintenance on the property. Reverse mortgages are generally not good for someone in their 60's because they could live for another 20, 30 or more years and it's impossible to know the future that far out. Also at that age she would have access to less of the equity. There are lots of other options and all options should be explored so that the one in her best interest is chosen. In general, a reverse mortgage should provide financial security through retirement, meet financial goals and budget, and meet her wishes for her estate. If you end up getting one it's important for you to have legal authority to speak to the lender when issues come up or when your mom passes. The easiest way is through a trust where you are successor trustee. A POA is only good while your mom is still living and won't be recognized by the lender after her passing. I an not an attorney and not giving you legal advice. My expertise is federal regulations and consumer protections as they relate to reverse mortgages. Sandy Jolley, Reverse Mortgage Suitability and Abuse Consultant

Please do NOT enter into a reverse mortgage. A reverse mortgage is a LOAN the bank gives you. It is only a matter of time when people realize reverse mortgages are another form of predatory lending. Anything paid out must be repaid to the bank. If you are unable to repay the bank the house will be repossessed. Sell the house ASAP and use the funds to pay for mom's care.

Be careful when you sell the home make sure to get the house appraised because you do not want to sell it for less than what the state shows as valued. if you sell it for less than one it's taxed for and don't have it appraised they can come back and show your mom as in a deficit and it could keep her from getting the Miller trust.

IsntEasy--nicely put. I couldn't agree more.

DNHnana – Have a talk with the director of the AL. They've been down this road many times and will have advice specific to your mom's situation. Only they will be able to say how long they can wait for payment. Also, they may be able to find a way to reduce your mom's monthly rent depending upon her needs. You might also want to shop around a little to see if you can find a suitable AL that costs less so her money lasts longer. I don't know where you are in MD, but in the Baltimore area, there's lots of competition and plenty of very nice and reasonably priced ALs. Moving sounds like something you want to avoid, but really, once you've made the move from home to AL, switching communities is not so daunting a task.

RPerkins – Please consider all sides of the situation. When mother's assets are used to pay for her care, she is the one benefitting (not all the 'greedy' parties you disparaged). Parents' assets should NOT be considered a retirement fund for adult children. If they need it, their money is theirs to be used for their care. If instead, you want to inherit their assets, then you should pay for their care or provide it yourself.

Remember that the reverse mortgage has to be paid back.

Was responding to advice given by RPerkins14. I have been through this with my parents and in laws. I am guardian of my aunt and have gone through a sizable trust to take care of her. She is on medicade at this time. I am not unsympathetic to what families go through. My response was not intended to be unkind just factual.

Jinx, I believe Pamela wasn't referring to the original poster as nothing in her post indicated she would be doing that.... the response was to another writer who had posted an answer giving advice to turn over the house and other assets to family members.

Pamela 810 - you are entitled to your opinion, but please don't accuse someone without any evidence that they are trying to avoid paying for their parent's care. Your words are unkind, which is against the culture here.

Hello - To get a reverse mortgage the borrower has to occupy the property as her primary residence. It sounds like she is going to be in assisted living permanently. If that is the case the family should decide what is in her best interest with the home. You can lease it out for income, sell the home, have family members payoff the mortgage or make the mortgage payments if you want to keep the home in the family and lots of other options. It's best if you know all your options and choose the one that works best for your mom and family. Sandy Jolley, Reverse Mortgage Suitability and Abuse Consultant

I am not unsympathetic to those whose assets are running low and are not able to pay for assisted living or nursing home care, but I get a little weary, and yes, even perturbed when seniors and their children scramble to move their assets around so that the "evil, money-sucking" nursing home or government Medicaid program can't "steal my hard-earned money." The nursing home staff who care for our loved ones need to be paid, and the costs of running these facilities is high. Someone has to pay for these services. Is it not disingenuous for everyone to hide their assets and ask the government to pay for our loved ones care, and then complain about or refuse to pay increased taxes? When did it become acceptable, admirable, and "smart" to do this?

RPerkins - can't just "sign over" the house. The mom doesnt own it, there is a mortgage. Mortgage holder will determine IF they even want to continue to deal with the mortgage; they could require old to be cancelled with new mortgage done & the daughter will need to qualify or loan gets called in; or add new person on if they qualify with new paperwork done & I'd bet new mortgage insurance conditions added if the mortgage was older like 20 years into a 30 year. Or they just foreclose. There's been so many Foreclosures, well that IMO for the banks well it's better for the bank to just foreclose as they have a whole system to let the house go onto and not deal with all that drama & 1to1 paperwork with an stroke in a AL resident and their family. Yeah it's pretty ruthless but mortgage system is that in the US.

What law said your moms assets were there to give to children and grandchildren while the rest of us pick up the bill for her care? The assets are there to take care of her when she needs it. The facility and others providing care are not "taking" moms money they are getting paid for providing a service.

RPerkins14, it is not a good idea to sign anything over to grown children or grandchildren as that throws a huge wrench in the works when it comes to having an elder apply for Medicaid within the next 5 years. Anything signed over will be considered "gifts" thus those dollar amounts will be subtracted from the elder's care.... the elder would have to be self-pay for many months or years.

Regarding taking over a mortgage, if a mortgage company gets wind that the home owner herself isn't making the payments, the mortgage could become due in full. One would need to read over the mortgage papers to see if such clauses are in force. If that happens, the person who is taking over the mortgage would need to apply for a mortgage him/herself.

DNHnana, be sure that the house is listed at fair market value, otherwise Medicaid might see a low price as a red flag.

I know all of this is so complex.... wish it was much simpler as you have enough on your plate.

Barb is absolutely right, always get a GOOD elder care attorney. But also plan ahead with a good estate planning attorney. As the old Euripides quote goes: " No one can confidently say that he will still be living tomorrow" and "Arm yourself, my heart: the thing that you must do is fearful, yet inevitable"

DNH - 12k to facility... Is she current on her mortgage or about to default?
I'd bet there are also bills related to her stroke too. My suggestion is for you to contact the Realtor today and tell them mom is a "very motivated seller" and get the house sold ASAP. Mortgage gets paid off at closing and hopefully there is also enough $$ to pay off AL bill and to pay to get with an elder atty to update all moms legal and determine how to get mom eligible for Medicaid. Eligibility could mean she does a medicaid compliant special needs trust for extra $ from house sale $ &/or Miller trust for income overage if a Miller can work for her situation (so can be on Medicaid).

Please remember all $$ must clearly show that it was spent on moms care or moms needs. You probably can't easily reinburse yourself for things you paid for on the house, her care, etc as medicaid tends to assume family just pays for things out of a sense of familial duty without reinbursement and will consider any $ from mom to you to be gifting and will cause a transfer penalty issue for her Medicaid eligibility. So no $$ to you.

If your mom is on the young side it may be an estate atty.who does SNT rather than one who does elder law. You are her DPOA, MPOA already, right? If not and the stroke was intense, there could be guardianship needed to be done as well.

House needs to get sold as mortgage holder will foreclosure if not current. You dont want mom to loose any equity she has in the house. Get it sold ASAP.

Please consult a certified eldercare attorney before you take any action.

We have been through this same situation with my father-in-law and mother-in-law. We sold the house even though we took a loss. We were able to write off the loss with the IRS. My father-in-law passed away and the money's coming in was cut in half. My mother-in-law income has been cut in half and will soon run out. In our state when the person is still in assisted living or a nursing home, the state will take over the cost of caregiving.
Once again this should have been addressed by a good estate planner and attorney. I made these plans when I was in my 50's, I worked in a high-risk job situation and knew that I could be killed or injured and unable to work. I still live in my home but because of good planning we have all situation covered. I am in my early 70's and realized that something could happen to me anytime. My wife is in her mid 60's and she is protected too. We have addressed all situation so there will be no issue for my daughter.

I would do everything I can not to lose your moms house she worked to hard to give all of that away to the bank, state, or anyone who is not related to you. Try to get a family member to take over the mortgage & have your mom sign everything over to her grandchild let the nursing home get her monthly income that's it so many people give up that's how nursing home owners get rich taking advantage of your sad situation. Always try to keep affairs within the family before letting outsiders make decisions for your financial downfall. You should have gotten advice when your mom first took illness I'm sure she wanted to keep her house or let her children benefit not outsiders. I wish your mom the best. If its too late then you will have to let others take over. So sorry

You can wait for the house to sell or deed the property over to the nursing home. You have to know what the home is actually worth. It depends also on what demands the nursing facility is making. Are they going to kick your mom out if she doesn't pay? A reverse mortgage is not a good idea. She would have to die before the home could be sold.

If she is over the Medicaid limit because her income from SS and pension is too high, get to and eldercare attorney to do a pooled income trust, some times called a Miller trust, so that she qualifies.

Like Pam said, mom can only apply for a reverse mortgage if she is living in the house.

You cannot get a reverse mortgage because she is no longer in the house. Sell the house and use the money towards her care at assisted living. When that runs low, the facility will assist you in applying for Medicaid.