A wonderful friend of mine, Joan, recently closed her reverse mortgage. She was so excited to finally get a new car, and replace her A/C & Heating unit in her home. Her friend from Arizona left her a message and became worried when she did not call him back. After 2 days of leaving messages, he finally called the police. They went by the house and found her inside after suffering a massive stroke. Joan is now in the hospital but is unresponsive. She had put off getting a living trust for years. She thought she would eventually get around to it. Included in most trusts is a medical Power of Attorney giving a trusted person power to make medical decisions if you are incapacitated. Joan’s family is worried and confused as they don’t have the ability to make decisions on her behalf. During this difficult time they will have to get an attorney and go before a judge to ask for a conservatorship so that they can make medical and financial decisions on Joan’s behalf. If Joan were to pass away, her estate will then have to go through probate, which can take 4 to 6 months and costs tens of thousands of dollars and could take as much as half of her estate between local and federal taxes.
Many people mistakenly think a will is all they need to pass their assets onto their heirs. What they may not be aware of is that even with a will, the estate still has to go through probate and is subject to local and federal fees causing their heirs to lose up to half of the estate. A Revocable Living Trust is a legal document that transfers your assets into a trust for your use and benefit during your lifetime and then control of those assets transfer to your chosen beneficiaries; a living trust avoids probate and all of the fees associated with it. Trusts also typically designate who will make medical decisions for you if you become incapacitated as Joan. They also include a will. A trust can include your desired wishes for a funeral, as well as how you want your assets to be dispersed and when. If you care for any minors, it can designate who you wish to care for them upon your passing. Most people do not want to think about their own demise or unforeseen medical situations, but you owe it to your family to prepare now to make a difficult time a little less difficult for them. You can find online services that will help you with your living trust for around $500, or an attorney for $2,000 and anywhere in between. I highly recommend to any of my reverse mortgage clients to get a trust with their reverse mortgage monies. If you would like references for living trust options, feel free to call or email me. Robert Krepps 877-567-7476 or firstname.lastname@example.org