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    Home » Elder Law » HECM Can Be Response To Long-Term Care Costs

    HECM Can Be Response To Long-Term Care Costs

    August 17, 2011Elder Law

    A lot of people think that retirement planning involves looking forward to a time of travel and leisure, and indeed this is part of the equation. But there is also a time that many people experience after their active retirement years that you must take into consideration if you want to be properly prepared for all the eventualities of aging.

    Many individuals are not cognizant of just how likely it is that they will someday need long-term care during their twilight years. At any given time 25% of people 85 years of age and older are living in nursing homes. According to statistics provided by the United States Department of Health and Human Services 70% of Americans who reach the age of 65 will indeed require long-term care at some point in time. The costs associated with this care are very high at the present time and they are expected to continue to rise.

    There are a number of possible solutions for funding long-term care, and one of them would be to take out a home equity conversion mortgage. These are federally backed reverse mortgages, and to qualify you must be at least 62 years of age and have significant equity in your home or own it outright. Because no payments are expected you can’t default and your credit and income are not a factor. You can continue to live in the home for as long as you want to, and the loan becomes due when you either move voluntarily or pass away.

    You could utilize monies derived from the loan to fund ongoing in-home care if you needed assistance with your day-to-day needs. Another option would be to use the funds to purchase long-term care insurance. If the time came when you needed to enter a long-term care facility, the expenses would be covered by your insurance and the reverse mortgage loan would become due. You could then sell the house, use a portion of the proceeds to satisfy the debt, and do whatever you wanted to do with the rest of the proceeds from the sale.

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    Alan Augulis, Estate Planning Attorney
    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.
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    About Alan Augulis, Estate Planning Attorney

    Mr. Augulis founded his Warren, New Jersey law firm so that he could focus his practice in the areas of advanced estate planning and tax law. Mr. Augulis has invested considerable time and energy helping to educate others on the topic of estate planning and has become a sought-after speaker in the tax and estate planning arena because of his informative and entertaining seminars.

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