The Private Reverse Mortgage

The Wall Street Journal recently ran an article about the benefits of having a younger family member provide a “reverse mortgage” to a parent.  A traditional reverse mortgage typically requires the borrower to be at least 62 years old and own and occupy the residence that will secure the mortgage. The private reverse mortgage is a similar type of contractual arrangement, but can be much more flexible.  As a private transaction, the arrangement can be made with a person under age 62, it can be secured by a vacation property, rental property or the borrower’s former residence if the he or she has moved to an assisted living or other facility.  Additionally, a private reverse mortgage is generally much more affordable than a reverse mortgage from a conventional lender.  Of course you will need to weigh all the risks and benefits, but for those who can undertake this type of arrangement it can be very beneficial to parent who will not qualify for a conventional reverse mortgage.

Stepping Up

At some point most of us will have to step up and help our parents with their affairs. A recent Forbes article discusses how difficult it can be if your parents already have some memory loss or dementia when you first enquire about their situation. Since they may not be able to communicate with you effectively, it may take months to ascertain their financial situation because you won’t know what assets they have or where they are located. As the article mentions, a better way to go is to talk with your parents before it becomes necessary. Help get them organized. This task will also help you to find out what bank accounts, insurance policies and sources of income your parents have. And if your parents’ affairs are more complex, it will be even more important to know what’s happening in their financial lives. As with anything, if you prepare early and stay on top of things, you’ll be well served when you do have to help out.

Bothell Chamber Supports Senior Community

Many people who work or reside in Bothell, Woodinville or Kenmore, Washington already know the Bothell Chamber of Commerce has a great website with lots of helpful information and resources. What many people may not know is that the Chamber’s website has a wealth of resources for seniors and their families. The site has information on all manner of non-profit and for-profit businesses that tailor products, services and activities to the needs of seniors and their families. So if you’re in need of an estate planning attorney such as yours truly, an assisted living facility, an adult family home, a home care provider, financial advisor, etc. or want to learn about the various non-profit organizations serving seniors in the area check out the Chamber’s website. And, like the Chamber itself, the site is dynamic. The hard working Chamber staff frequently adds new material to better serve our community.

Heat Wave

As I lay in my bed, unable to sleep, western Washington undergoes an unprecedented heat wave. From Seattle to Tacoma, Bothell to Bellingham the mercury has soared, in many places well past 100 degrees. For those of you in traditionally warmer locales, you may be thinking what’s the big deal? But I can count on one hand the number of 100 degree days in the Puget Sound region in the past 40 years. What does this have to do with estate planning? Nothing really, except to say that this type of weather leads to heat stroke and dehydration, often in the elderly. So check in on your parents and older relatives. Make sure they are drinking enough fluids, have fans to keep air moving and if possible help them get somewhere with air conditioning. Many Senior Centers and libraries in the Puget Sound area are acting as “cooling stations” for people to get out of the heat.

The "Sandwich Generation"

A recent issue of Business Week contained a “Special Report” on retirement. Two of the many articles focused on the challenges faced by the Sandwich Generation. These are the folks who are simultaneously raising their own kids while caring for their aging parents.

Washington's Death With Dignity Act: It's Provisions and Problems

Last November Washington State passed a death with dignity law. The law, which went into effect on March 5, 2009, allows a competent adult and resident of Washington State to end his or her life. The person must be suffering from a terminal disease as determined by the attending physician and a consulting physician, and voluntarily express his or her wish to die.

Here’s the probable order of events:*

  1. The patient makes an initial oral request for the medication;
  2. The patient must then wait 15 days;
  3. Next, the patient makes a written request signed by patient and witnessed;
  4. The attending physician evaluates the patient to determine the diagnosis is terminal, and that the patient is competent and is making the request voluntarily;
  5. A consulting physician makes an identical evaluation, if they concur the request can proceed;
  6. The patient is referred for counseling by a licensed psychiatrist or psychologist if either physician deems appropriate;
  7. The attending physician must then give the patient the express opportunity to rescind the request;
  8. The patient must reiterate orally his/her request after he/she is given express opportunity to rescind; and
  9. The prescription is written, filled and the patient “takes” the prescribed medication.

*The timeline outlined above is anything but clear. The statute could be read to allow an oral request coupled with a simultaneous written request, then a 15-day waiting period, reiteration of the request orally and finally, writing the prescription. Under such a reading, the 48 hour wait period is subsumed into the 15 day period not added to it. This interpretation would give effect to both waiting periods, just not the way most people would probably think.

Washington’s statute is anything but perfect. While there are many safeguards, some problems do exist. One significant problem is the lack of control or guidance as to what happens after the medication is prescribed. There is no prescribed time or location to take the medication, no one has to witness the “self-administration”, and while one must have capacity all through the request process, there is no requirement of capacity at the moment of administering the medication. Moreover, while the language of Washington’s law seems to imply that only the patient can administer the medicine to himself/herself, another party could in fact give the medication due to the definition of “self-administration.”

It is only appropriate that we counsel clients on all ramifications of Washington’s Death with Dignity Law and allow them to decide how to proceed.
 

Know what you're buying with Long Term Care Insurance

Apparently, even rich and famous financial gurus can get sued. According to Forbes magazine, financial maven Suze Orman is being sued for civil fraud, conspiracy and breach of fiduciary duty for selling a long term care policy in the late 1990’s. Allegedly, promotional material used by Ms. Orman’s then financial advisory firm indicated “paid caregivers ‘cannot be a member of your immediate family living with you.’” This fact, among others I’m sure, induced the matriarch of one family to buy the Long Term Care Policy. Mom’s family did not reside with her, but lived nearby. After Mom received care from her family, she submitted reimbursement claims to the insurance company. The company denied the claims, however, citing policy language that barred payments to family members no matter where they lived. The moral of our story: be sure you know what you’re getting before you buy.

Upcoming Events

I will be speaking at Aegis of Bothell on July 28, 2009, from 6:30-7:30 p.m. about estate planning for seniors and the basics of Medicare, Medicaid and Long Term Care Insurance. The event is sponsored by the Bothell Neighborhood Resource Council which consists of a variety of local businesses focused on serving the needs of seniors and their families.

Protect Your Parents - Spotting Signs of Elder Financial Abuse

It’s always been important to protect family money, but with the difficult economy, it’s now more important than ever. One way to help mom and dad maintain money for their retirement, is to avoid losing it to fraud or financial abuse. Learn to recognize signs of potential abuse. Some of the signs are:

  • Changes in banking habits
  • Changes in a Will or other documents
  • Unexplained transfers of assets
  • Forged signatures on checks or other documents
  • Excessive use of ATM or credit cards

Also, review or have an attorney review any document a parent is asked to sign. Recently, a client of mine was selling a piece of land, and the buyer presented a contract with language that could actually have my client paying the buyer instead of the buyer paying the seller!
 

 

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