Understanding Reverse Mortgages
Precautions to Take When
Considering A Reverse Mortgage
If you are at least 62 years old and have equity in your home, you may be eligible to use that equity to generate additional income during your retirement years. The arrangement is called a reverse mortgage. You borrow money using your home as collateral and make no monthly payment as long as you live in your home. When you die or move out of your home, the loan, plus interest and fees, becomes due.
If you are considering a reverse mortgage please do your due diligence in regards to the following points:
1. Don’t underestimate the closing cost fees.
2. Determine if it disqualifies you for Medicaid and Supplemental Security Income program eligibility.
3. If long term care is required, you may have to leave the home and move into a nursing or care facility.
4. Determine if the amount loaned is limited requiring payoff sooner than expected.
5. In the event your heirs are not able to pay-off the loan upon your death, it would result in home foreclosure.
In addition, ensure you protect yourself by receiving consultation on the pros and cons by a trusted professional or elder law attorney, and only contacting a lender approved by the Federal Housing Administration (FHA), a part of the US Department of Housing and Urban Development (HUD).
Reasons Why People Avoid Estate Planning & Why Not To
Why Avoid: They don't have the time.
Why Not To: Stop procrastinating you may not get another chance.
Naming beneficiaries and an executor are two musts. Take the time to think this through. If you're married you probably think your spouse will get everything. While that may be true, you don't want your relatives and your spouse fighting over your stuff. If you are single, then it won't be as obvious as to who gets what, especially if your siblings and parents survive you.
Why Avoid: They don't want to think about dying.
Why Not To: Estate planning is uncomfortable but necessary.
This is probably the most common reason people don't do some estate planning. Nobody wants to think about their own mortality, but we all will leave this earth someday. Why not do it while you are healthy? Estate planning can challenge your thinking. You will have to consider things like, who will get custody of your minor children, who gets your money, and where you'll want to be buried. It makes you think about not being here and how your family will cope.
Why Avoid: They don't understand it.
Why Not To: Make sure you get an education.
You must find a financial planner and/or estate planning attorney that can analyze your estate and educate you on your choices. You may not have an estate large enough for a complicated trust, but that doesn't mean you don't need a will with certain provisions in it. For example, if you become incapacitated from an accident, who will pay your bills? Do you want to be kept on life support?
Why Avoid: They don't think they have an estate to worry about.
Why Not To: Make sure you do some estate planning today before things get complicated.
Some of you may be thinking that you don't have enough wealth to worry about estate planning. You have an estate if you own pretty much anything. Something as simple as owning a car or a home can be a problem if you don't decide who will receive it when you pass. If you don't have a will or a named beneficiary such as on a retirement account, then the probate process could be a nightmare for your survivors.
Free Will and Trust Guide Kit: Request by e-mail to Frank.Nico@CBN.org
Choosing a Donor Advised Fund or Private Foundation: Compliance Requirements
A PF has more extensive filings and tax return information than compared to the DAF. Examples of possible filings include: Form 990-PF, excise tax returns, gift receipts and Form 8283. A PF’s tax returns are pubic record, so donors who are interested in privacy may prefer DAFs, which as part of a sponsoring organization do not have separate filings, although the sponsoring organization often imposes some fees on the DAF to cover compliance costs. Next Week: Control & Legacy Planning.
Secure Your Future
If you are like many people, you have watched your investments fluctuate with the markets. There isn’t much security in knowing that your future can be tossed around like the wind. You might be wondering if there is any way to create true security for you and your loved ones. The good news is that with a charitable gift annuity, you can receive fixed payments that never change with payments made to you or your loved ones for life. Contact CBN Planned Giving for more information on a Gift Annuity.
Charitable Deduction Rules for Gift Annuity
Most gift annuities are funded with cash, and the deduction may be taken up to 50% of adjusted gross income. If the annuity is funded with long-term capital gain property, the deduction may be used to 30% of adjusted gross income. Any excess over these amounts may be carried forward and deducted over as long as the next five years. In addition, annual payouts are partially tax-free during the annuity contract life expectancy period.
Charitable Tax Reference and Deduction Calculator
Gift Law Pro is a complete charitable giving and tax information service. The Gift Law Calculator is a planned gifts calculator for determining charitable gift annuity or charitable remainder trust rates, payments and tax savings. Either can be found at www.CBNLegacy.org website. Select For Advisors from menu.
Create a Legacy
Please let us know if you have considered CBN for a Legacy planned gift. We want to personally thank you and let you know how much we appreciate your support. Your gift will help CBN continue its mission to impact the world with the Gospel of Jesus Christ.
“A charitable bequest or beneficiary form designation are excellent ways to create a lasting legacy.”
Your legacy gift supports the CBN Family of Ministries through mass media, primarily television broadcasts and digital media, and humanitarian projects: The 700 Club and other CBN TV programs worldwide, CBN News, CBN prayer centers, Superbook animated Bible series, Orphan's Promise, CBN Israel, U.S. and international humanitarian and disaster relief aid through CBN International and more.
If you are at least 62 years old and have equity in your home, you may be eligible to use that equity to generate additional income during your retirement years. The arrangement is called a reverse mortgage. You borrow money using your home as collateral and make no monthly payment as long as you live in your home. When you die or move out of your home, the loan, plus interest and fees, becomes due.
If you are considering a reverse mortgage please do your due diligence in regards to the following points:
1. Don’t underestimate the closing cost fees.
2. Determine if it disqualifies you for Medicaid and Supplemental Security Income program eligibility.
3. If long term care is required, you may have to leave the home and move into a nursing or care facility.
4. Determine if the amount loaned is limited requiring payoff sooner than expected.
5. In the event your heirs are not able to pay-off the loan upon your death, it would result in home foreclosure.
In addition, ensure you protect yourself by receiving consultation on the pros and cons by a trusted professional or elder law attorney, and only contacting a lender approved by the Federal Housing Administration (FHA), a part of the US Department of Housing and Urban Development (HUD).
Reasons Why People Avoid Estate Planning & Why Not To
Why Avoid: They don't have the time.
Why Not To: Stop procrastinating you may not get another chance.
Naming beneficiaries and an executor are two musts. Take the time to think this through. If you're married you probably think your spouse will get everything. While that may be true, you don't want your relatives and your spouse fighting over your stuff. If you are single, then it won't be as obvious as to who gets what, especially if your siblings and parents survive you.
Why Avoid: They don't want to think about dying.
Why Not To: Estate planning is uncomfortable but necessary.
This is probably the most common reason people don't do some estate planning. Nobody wants to think about their own mortality, but we all will leave this earth someday. Why not do it while you are healthy? Estate planning can challenge your thinking. You will have to consider things like, who will get custody of your minor children, who gets your money, and where you'll want to be buried. It makes you think about not being here and how your family will cope.
Why Avoid: They don't understand it.
Why Not To: Make sure you get an education.
You must find a financial planner and/or estate planning attorney that can analyze your estate and educate you on your choices. You may not have an estate large enough for a complicated trust, but that doesn't mean you don't need a will with certain provisions in it. For example, if you become incapacitated from an accident, who will pay your bills? Do you want to be kept on life support?
Why Avoid: They don't think they have an estate to worry about.
Why Not To: Make sure you do some estate planning today before things get complicated.
Some of you may be thinking that you don't have enough wealth to worry about estate planning. You have an estate if you own pretty much anything. Something as simple as owning a car or a home can be a problem if you don't decide who will receive it when you pass. If you don't have a will or a named beneficiary such as on a retirement account, then the probate process could be a nightmare for your survivors.
Free Will and Trust Guide Kit: Request by e-mail to Frank.Nico@CBN.org
Choosing a Donor Advised Fund or Private Foundation: Compliance Requirements
A PF has more extensive filings and tax return information than compared to the DAF. Examples of possible filings include: Form 990-PF, excise tax returns, gift receipts and Form 8283. A PF’s tax returns are pubic record, so donors who are interested in privacy may prefer DAFs, which as part of a sponsoring organization do not have separate filings, although the sponsoring organization often imposes some fees on the DAF to cover compliance costs. Next Week: Control & Legacy Planning.
Secure Your Future
If you are like many people, you have watched your investments fluctuate with the markets. There isn’t much security in knowing that your future can be tossed around like the wind. You might be wondering if there is any way to create true security for you and your loved ones. The good news is that with a charitable gift annuity, you can receive fixed payments that never change with payments made to you or your loved ones for life. Contact CBN Planned Giving for more information on a Gift Annuity.
Charitable Deduction Rules for Gift Annuity
Most gift annuities are funded with cash, and the deduction may be taken up to 50% of adjusted gross income. If the annuity is funded with long-term capital gain property, the deduction may be used to 30% of adjusted gross income. Any excess over these amounts may be carried forward and deducted over as long as the next five years. In addition, annual payouts are partially tax-free during the annuity contract life expectancy period.
Charitable Tax Reference and Deduction Calculator
Gift Law Pro is a complete charitable giving and tax information service. The Gift Law Calculator is a planned gifts calculator for determining charitable gift annuity or charitable remainder trust rates, payments and tax savings. Either can be found at www.CBNLegacy.org website. Select For Advisors from menu.
Create a Legacy
Please let us know if you have considered CBN for a Legacy planned gift. We want to personally thank you and let you know how much we appreciate your support. Your gift will help CBN continue its mission to impact the world with the Gospel of Jesus Christ.
“A charitable bequest or beneficiary form designation are excellent ways to create a lasting legacy.”
Your legacy gift supports the CBN Family of Ministries through mass media, primarily television broadcasts and digital media, and humanitarian projects: The 700 Club and other CBN TV programs worldwide, CBN News, CBN prayer centers, Superbook animated Bible series, Orphan's Promise, CBN Israel, U.S. and international humanitarian and disaster relief aid through CBN International and more.
The Leave A Legacy estate planning presentation by
attorney Suzanne Pennington can be viewed at www.CBNLegacy.org Frank T. Nico, CAP®
ChFC® CASL®
If you have a question or
would like more information please e-mail me at Frank.Nico@CBN.org
or call our toll free number at 1-800-333-2373.
or call our toll free number at 1-800-333-2373.
