Are Reverse Mortgages Good For Estate Planning?

YES

To me this is the biggest no brainer in history. The government has given seniors a mechanism in which they can pull the equity out of their home TAX FREE, and place it in whatever estate instrument they choose without penalty. Then at the time of estate settlement, the government sees the net value of the home as the value of the home MINUS the cost of the reverse mortgage including the equity you removed.

This means that you are able to put the money from your home wherever you want while you have complete control of it. I have heard many stories about the mishandling of estates after the estate owner has died. This is the one single way in which you can put your home equity in the exact position you want. If you want it to go to a charity, you can give it to the charity and make sure the money is used for the purpose you intended WHILE YOUR ALIVE. If you want the money to go to a relative or friend, you can make sure it happens in the way you want. A good example of this is a trust fund that you can set up with the cash and have it administrated exactly the way you want. Even if you primary goal is conservation of capital (NOT GIVING IT ALL TO THE GOVERNMENT), this is the perfect mechanism.

It amazes me that financial planners, estate planners, and CPA's continue to see reverse mortgages as a negative tool for senior citizens, and as something that should only be used in an emergency. The truth is that a reverse mortgage is a good tool for every senior citizen. That's why I am blogging about it, and that is why I am trying to reach every senior citizen with the opportunity before the government closes this entitlement.

Bob
bob@az62.com
www.az62.com
623-214-6663