Skip to content

#55 When Heirs Need Your Help More Than Your House

When Heirs Need Your Help More Than Your House

David Garrison
Home Equity Retirement Specialist
NMLS # 1595194
Serving the State of Indiana
p (317) 644-2595 c (765) 516-0130
e [email protected]

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

You’ve always been conscious of the importance of estate planning. Now, however, in your late seventies and in the aftermath of a couple of health scares, you’ve begun to discuss and gather information about actual funeral planning. In terms of the funeral and burial costs for both, as well as obituary notices, it seems you will need to set aside at least $25,000-$30,000, since it is important to you to have headstones. (You realize you can affect some savings by entering into a prepayment plan). Health challenges notwithstanding, you believe it is reasonable to hope to continue living in your home for the remainder of both your lives.

Because unfortunately, neither of your children is in a position of financial stability, as part of your end-of-life planning, you would like to cover travel and hotel expenses for them in addition to providing for the funeral costs themselves. At the same time, you do not feel you can set apart that much money out of your own resources for end-of-life planning. You’ve followed up on some of the TV ads about no-underwriting life insurance for covering funeral costs, but are reluctant to commit to monthly premium payments of that size. As “morbid” as your preoccupation with death may seem to some of your friends, you are convinced that putting your plans in order now will allow you to move forward with enjoying the years to come, knowing you’ve made things as easy as possible for family members.

Making end-of-life decisions now is indeed a great kindness to your children, reducing their burden from both a financial and a decision-making point of view. Perhaps a reverse mortgage on your home can provide the mechanism to accomplish the goals you’ve described. Since your intent is to remain in your present home, a Home Equity Conversion Mortgage on your home will provide funds you can use immediately for prepaid funeral and burial expenses, without tapping your savings and investment resources. Alternately (or possibly in addition), you can draw from your line of credit to pay for life insurance. Working with an estate planning attorney, you can set up a burial “trust fund” to allow for paying funeral costs upon your death. Meanwhile, your home equity can provide reserve funding for unforeseen medical costs.

Sounds as if your survivors are going to need your help more than your house, and you’ve very kindly and thoughtfully devoted efforts to providing that help and comfort.