REVERSE MORTGAGE CAN ENABLE TRUE BROTHERHOOD
Your older brother, a widower in his late seventies, had originally been planning to “age in place.” He’d even been going to seminars about reverse mortgages (so that he could remodel the house to make it possible to live on one floor). Unfortunately, following a number of recent health scares, he’s come to terms with the fact that managing a large home, even after remodeling, is no longer going to be feasible. He’s made the decision to buy into a nearby retirement community that has both assisting living and full-care options (should those become needed).
Because you’re the only one of the siblings who lives nearby, you’ve tried to help him with this difficult life transition. Your brother has found the place he wants and would like to get on their waiting list. Problem is, he lacks sufficient means to cover the upfront buy-in for the new place before this one is sold. You agree that community care-type living is his best choice, and you’re more than willing to oversee the listing and selling of his home. However, as much as you’re devoted to helping, you don’t have that much in liquid resources to offer and are reluctant to liquidate assets at this point in the stock market (there would also be severe tax consequences). Meanwhile, for your brother, the pressures are mounting, with many decisions to be made about which furnishings he should sell and which to take with him. It’s all you can do to help him keep up with all those medical tests and appointments!
Since your brother had already been considering a reverse mortgage, you might consider tapping into the equity in your own home in the form of a reverse mortgage, making a lump sum withdrawal from your own equity to pay the continuing care community fee on behalf of your brother. It would be a good idea to consult tax and estate planning advisors (in addition to the reverse mortgage professional) in order to properly structure the “family loan” you’d be making to your brother. The general idea is that when his home ultimately is sold, a portion of the proceeds can be used to “restore” the equity in yours.
David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702.
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