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#188 Using a reverse mortgage as part of a charitable giving plan


Now that retirement has become a reality for both of you, you feel blessed to have been able to devote more time to charitable projects, in particular those that relate to medical care for impoverished people around the globe.

As part of the process of preparing to retire, you had your 70-year old home and surrounding property completely remodeled and prepared for you to “age in place”. Your living expenses are covered by pension income along with withdrawals from a jointly held portfolio. 

You have one son and three grandchildren who live in a neighboring state. Your son is professionally secure and he and his wife have not depended on you for financial support.

Years ago, from your own father, you inherited stock of what is now a publicly traded company.  While the dividend income from these shares has enabled part of your charitable giving, you have never sold any of the shares themselves. Originally intending for those shares to be part of your legacy to your son someday, you have lately been considering donating some or all of the shares to charity. At the same time, you want to continue the tradition of leaving wealth to the next generation after you’ve both died.

The secret to satisfying your desire to make an impactful charitable gift, while still preserving an income “safety net” for the two of you while creating a meaningful legacy for your own son may lie within the “walls” of your own home.  

As Part A of this plan, you might discuss with legal counsel the benefits of setting up a charitable lead trust, using part or all of the stock to fund the trust.  Within the trust, assets can be sold without triggering a capital gains tax, with the proceeds put to use in supporting your chosen causes. Whatever assets remain in the trust, though would “lead” back to your heirs. Your attorney can explain all the gift and estate tax benefits of such a trust.

Meanwhile, your own future income stability can be bolstered through a reverse mortgage on your home, set up as a line of credit, allowing you and your spouse to draw on your housing wealth as needed for healthcare needs or luxury spending as you move through retirement.

Let your housing wealth provide the “ballast” for your charitable giving, allowing part of your wealth to “lead” back to your son  while providing a “reserve” source of funding for your own future needs.

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

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. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: | Equal Housing Lender