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Reverse Mortgage Blog

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April 23, 2020
Traditionally and most frequently we think of our hard earned and accumulated holdings as a pending legacy gift to our heirs after we are gone. 
New thinking is increasingly gaining enthusiasm as better strategy to deliver our gifts now:
Advanced Legacy
Discussions with my clients, surrounding the subject of what they will "leave to their kids' raises questions as to how ones bequest will be used. Will it be used wisely? Will it be flittered away? Will it be spent for immediate gratification? Will it be prudently invested?  Will unworthy recipients be inappropriately rewarded?  How do I know how it would work out?
With Advance Legacy they can influence or control exactly how the transferred wealth will be used. How, when, where, & who.
Many are concluding that it is be better, from their perspective, if they transfer/gift/spend their anticipated surplus wealth now, in advance of their demise? Or a portion of it.
How might I do that and what would be the advantage(s)?
"Acting on my assets now gives me control and choice as to how it is used. Or, at least a portion of my available proceeds. Used just how I would think it best. How I would like to see my years of hard work and careful investment put to use. I can see it put to use while I am here and enjoy seeing their pleasure.'
Here are some actual actions that clients have taken to initiate and Advance Legacy.
  • Pay for college tuition (a "grandpa scholarship") 
    • o  Perhaps for achieving a given criteria
  • Pay off grandchildren's current student debt
  • Make a down payment on a house
  • Take the entire extended family on a memorable vacation (Hawaii, Rome, Paris). Something they will definitely remember you for. And you will remember too.
  • Invest in, launch, a business
  • ____________  fill in the blank
  • Do it before the tax man takes a bite.
In each of these cases, and potentially many others, our clients get to decide that the legacy is well-used and they get to experience the pleasure/joy it provides to the recipients.
Looking into an Advance Legacy raises the question as to how best to make the funds available.
  • Bad idea: Selling assets (investments) could trigger capital gains tax issues and/or 
  • Another Bad Idea; Selling an appreciating assets that, if held, will increase in value.
Many are determining that accessing the equity in their homes offers a grand alternative. 
With a Reverse Mortgage 
Line Of Credit
  • There is no tax consequence. 
    • The asset (the home) is 
      • o  not sold and
      • o  continues to build value. 
  • Other assets are not disturbed
  • Interest is accrued only on the balance outstanding
  • Costs to create the RMLOC are reasonable and financed
  • There are no obligations to pay it back as long as they live there.
  • There is non prepayment penalty
  • Interest rates are competitive

Utilizing accumulated home equity is a new concept when used as an opportunity too
l. Reverse Mortgage is the only product that provides this collection of advantages. Now it is available for conforming loans on conforming properties, and most recently, for 
loans as high as $3,000,000 for jumbo/estate valued homes.
 We have established a reputation for being highly qualified in providing assistance in evaluating all the options available to create a Advanced Legacy via leveraging home equity. 
Jay Kaplan profile picture
Jay Kaplan
This is the place to share. Share news, updates and opinions. The reverse is the most misunderstood item in the lending and financial home ownership arena; we need more exchange of ideas. This area is for questions and, I hope; answers. Please keep the dialogue going in the name of education, and that goes both ways. Please see that I have added two categories from The Educated Retirement show for Nostalgia and Wisdom
About my blog
This is the place to share. Share news, updates and opinions. The reverse is the most misunderstood item in the lending and financial home ownership arena; we need more exchange of ideas. This area ...
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