Wednesday, October 27, 2004

Reverse Mortgages In Trusts and Life Estates

Many senior homeowners are planning ahead in order to protect or enhance their legacy. When implemented properly, the use of a Trust or Life Estate can be an effective means through which a home, typically their largest single investment, can be transferred to their beneficiaries prior to the seniors’ passing. The seniors retain the right to live in the home for as long as they wish, but they may still need, or want, additional funds to do so. A reverse mortgage program can be utilized within a revocable trust or a life estate to provide this extra money. When the beneficiaries ultimately take over the property, the reverse mortgage must be refinanced by the beneficiaries, or the property can be sold, the reverse mortgage repaid and the remaining equity belongs to the beneficiaries.


Blogger hacknsackman said...

I have a crazy situation and an equally crazy question and I am hoping you
can answer it and maybe we can do some business.

My Step mother lives in a home that is in Roslyn NY (Long Island) that is
worth approximately $900K at last appraisal about 1 year ago. The home is
all paid for and has no mortgage on it. My father left the home to my
brother and I. We both live in Atlanta GA.

My father also left my step mom a life estate which gives her the right to
live in the home until she dies or gets married (and believe me - she is
not getting married anytime soon). She is 73 years old.

So, my brother and I are remaindermen on the property.

My brother is kind of ill right now and we both can use some money. I was
thinking - is there anyway of getting a reverse mortgage on the home where
the money would come to my and my brother?

Before you answer, let me state a couple of other facts.

1. My step mother is also known as our "evil step mother"
2. As such, our relationship with her is strained.
3. We have previously made her offers to sell the home and for the three
of us to share in the proceeds - to which she has declined.
4. We have tried to get a home equity loan - however, she is uncooperative
and will NOT allow an inside appraisal to be done. We can only do an
outside appraisal.
5. She will not give us any permission to refinance or anything.

The problem is waiting for her demise and letting almost 1 million dollars
sit idle without it being able to enhance our lives and the lives of our
children is definitely not what my father would have wanted and it just is
a crying shame.

So, I am trying to see if a reverse mortgage might be the answer. If you
have any input or any other suggestions, I would greatly appreciate
anything you might have to say on the matter.

We are still trying to negotiate with her and it is not working. We are
in a slight desperate situation and need to do something.

Please contact me at your earliest convenience.

11:01 AM  

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