What is a reverse mortgage?

A reverse mortgage is well named:  it is the reverse of a mortgage.

With a traditional mortgage, you have to pay it to keep your house.  With a reverse mortgage, it pays you so that you can keep your house.

A reverse mortgage can help senior homeowners stay in their home.  Here in New Jersey, the cost of property taxes and home maintenance may be too high for seniors on a fixed income.  One solution to this problem is to get cash from the equity in the home.

If a senior takes a home equity loan to get cash from the home, he or she still must pay that loan back each month thus raising his or her costs even more.

A reverse mortgage is different.  It allows a senior to get cash from the equity of the home without having to pay it back until the house is sold or the senior dies.  Therefore the cash can be used to pay ongoing expenses and stay in the home longer.

Cash from a reverse mortgage can adversely affect other senior benefits such as Medicaid or a veteran’s pension.  So an elder law attorney should be consulted.

The National Council on Aging is a federally approved counselor on reverse mortgages. It has written a useful guide for older homeowners entitled, “Use Your Home to Stay at Home.” For more information and to have your questions answered, visit their website here:  NCOA’s website


New Jersey Nursing Homes Get A “B”!

Living in a nursing home is never a first choice.  Most people want to keep their independence as long as possible.

If you are no longer able to care for yourself, one option is to hire an aide to help you in your home.  The aide can work as many hours a day as you need.  If you need 24 hour care, an aide can live in your home full time.  My mother was bedridden during the last few years of her life but she was able to stay in her home by hiring a live-in aide.

Another option is to move into an assisted living facility.  An assisted living facility is like an apartment complex where you can get the help you need to stay in your own place.  So you retain your privacy and as much independence as possible.

If a nursing home is needed, New Jersey’s nursing homes compare well to other nursing homes nationally.  If you check out http://nursinghomereportcards.com/, you will find that New Jersey nursing homes got a “B” on their report card.

What is a Power of Attorney for Health Care?

In a power of attorney, you name a trusted person to make decisions for you.  That person is referred to as an attorney-in-fact or an agent.

In a power of attorney for health care, you name an agent to make medical decisions for you if you are unable to do so yourself.  For example, if you are rushed to a hospital unconscious, your agent would use your power of attorney to make medical decisions for you.  Without a power of attorney, your doctors are legally restricted from sharing your medical information without your written permission.

Some people name their spouse or other close family member as their agent.  Other’s name close friends.  In choosing an agent, consider whether the prospective agent has the social skills and the time to take charge during a medical emergency.  Also consider how far away your choice lives.  A local person may better be able to communicate with doctors and hospitals than someone who lives far away.

Lastly, it is a good idea to name backup agents in case your first choice is unable or unwilling to serve.

What is a Living Will?

A Living Will is a legal document which directs your doctor to discontinue life-sustaining procedures if you are in a terminal condition or a permanently vegetative state.  A Living Will is also known as an Advance Medical Directive.

You have the right to refuse medical treatment.  However, you cannot refuse medical treatment if you are unconscious or otherwise mentally incapacitated.  So in a Living Will you are directing your doctor in advance to honor your refusal of treatment.

The Living Will comes into effect only after you become unconscious or mentally incapacitated.  If you are conscious and can voice your opinion, the Living Will is not used.

If you ever are in a terminal condition or a permanently vegetative state, your family may be asked about withholding treatment. Having a Living Will expressing your wishes will make it much easier on your family to have this discussion.




What is Estate Planning?

Occasionally prospective clients say to me: “I don’t need an estate plan, I just need a Will.”  I know they say that because of what the term “estate” has come to mean.  When most people think of an estate, they think of  a mansion on a large property with a wall and a gate.  So if you don’t have an estate, you don’t need estate planning.  Actually that is true!

But you do have an estate.  You estate is what you own and control.  What is in your estate?  Your stuff and money.  A house, car, furniture, clothes, collectibles, bank and investment accounts, stocks, bonds, retirement funds and life insurance.  Everything you own.

Estate planning is writing down a plan to say what happens to your stuff and money if you become too ill to handle your own affairs or if you pass away.  You also get to plan in advance for what happens to you during an illness.

Estate planning uses Wills and Trusts to plan for what happens to your stuff and money after death.  Living Trusts, Powers of Attorney and Living Wills are your plan for when you are too ill to act for yourself.

Now you know what an estate plan is.  I think that is reason enough to celebrate!