– A reverse mortgage can help older Americans pay for long-term care expenses
– The implications of a reverse mortgage on entitlement eligibility should be carefully considered
– Medicaid is a viable option for long-term care coverage, but a reverse mortgage should also be considered
– Selling the home should be a last resort, as it is a valuable asset
– Medicaid rules vary by state, but in some cases, the primary home is exempt from total assets
– Limitations on other assets could disqualify the parents from Medicaid
– A reverse mortgage can disqualify the parents from Medicaid or require them to spend down assets quickly
– Consult with a qualified and trustworthy estate or eldercare attorney to understand state-specific rules.
A reverse mortgage may be a viable financial instrument to help pay for older Americans’ long-term care priorities, but they — and their implications on entitlement eligibility — need to be fully considered.
A reader concerned about their parents’ cash reserves in retirement wrote to the outlet asking about ways they may be able to cover the costs of long-term care, which they say will be needed by their parents soon.
“They’re not on Medicaid at the moment, but they have a house that has been in a trust for only three years, and their children are named as beneficiaries,” the reader said. “Will we need to sell the house, or can they get a reverse mortgage to pay for their long-term care? Will they need to go on Medicaid?”
While Medicaid may be one of the more viable options, a reverse mortgage is a tool worthy of consideration according to Brian Tully, founder and managing partner at Tully Law Group which specializes in eldercare law.
“You never want a family to run out of money,” Tully told MarketWatch. “You always want them to have some money left, whether it is a retirement account, proceeds from a reverse mortgage they’ve moved to children or a well spouse. You always want to have access to money. Spending everything down is a mistake.”
The column describes selling the home to access equity as an option that “should be the very last resort,” since the home is a valuable asset they need not give up.
“Medicaid rules vary state by state, but in New York, for example, a primary home is exempt from total assets while the individual receiving care is living there, or intends to return there after their time in a nursing home,” the column said.
Limitations on other assets could come into play, however, and selling the home may end up disqualifying the parents from Medicaid. A reverse mortgage could present similar issues, the column said.
“You could get money from a reverse mortgage through a single lump sum, or regular fixed monthly payments, but that again can disqualify your parents from Medicaid eligibility — or require them to spend down those assets quicker than they otherwise would have,” it reads. “Look for a qualified and trustworthy estate or eldercare attorney who can help you make sense of your state’s specific rules.”
Property Chomp’s Take:
A reverse mortgage is a financial instrument that allows homeowners aged 62 or older to convert a portion of their home equity into cash. This can be a viable option to cover the costs of long-term care, but it is important to consider the implications on entitlement eligibility, such as Medicaid.
In a recent column published on MarketWatch, the author compares reverse mortgages to other potential options for covering long-term care costs. They also seek commentary from an eldercare attorney to provide insights into the matter.
The article features a reader who is concerned about their parents’ cash reserves in retirement and their ability to afford long-term care. The reader asks whether they should sell their house or consider a reverse mortgage to pay for the care. They also inquire about the need for Medicaid.
According to Brian Tully, founder and managing partner at Tully Law Group specializing in eldercare law, a reverse mortgage is a tool that should be considered to ensure that a family does not run out of money. He emphasizes the importance of having access to funds and advises against spending everything down.
The article highlights that selling the home should be a last resort, as the home is a valuable asset that homeowners need not give up. Medicaid rules vary by state, but in some states, the primary home is exempt from total assets while the individual receiving care is living there or intends to return after their time in a nursing home.
However, limitations on other assets and the proceeds from a reverse mortgage could potentially disqualify parents from Medicaid eligibility or require them to spend down their assets more quickly. The article advises readers to consult with a qualified and trustworthy estate or eldercare attorney who can provide guidance on their specific state’s rules.
In conclusion, a reverse mortgage can be a viable option to help cover long-term care costs for older Americans. However, it is crucial to fully consider the implications on entitlement eligibility, such as Medicaid. Consulting with professionals who specialize in eldercare law can help individuals make informed decisions based on their unique circumstances and state regulations.