Reverse Mortgages: Generating Cash Flow for Seniors

Just as a Living Trust has become an important part of financial planning, a reverse mortgage can play a role in generating extra revenue for retired seniors. Reverse mortgages have been arounds since 1961, and they’ve always been somewhat controversial. Yet a reverse mortgage can be a real difference-maker for seniors who need cash flow to supplement their retirement income.

In its simplest form, a reverse mortgage is a loan
Warning signs. A broker who:

• Uses high-pressure tactics to talk you into a reverse mortgage.

• Won’t disclose the fees, conditions and risks that come with taking out a reverse mortgage, including the possible loss of the home, which serves as collateral.

Do your research if you’re considering a reverse mortgage: Look to HUD, FTC

• HUD and theFederal Trade Commission have plenty of excellent information.

• Talk to a trusted financial adviser or attorney before you sign anything.

• If the reverse mortgage is a federally insured Home Equity Conversion Mortgage (HECM), as most are, you are required by law to meet with a government-approved counselor.

• Be wary if someone selling home-improvement services suggests taking out a reverse mortgage to pay for renovations or repairs.

• Be very suspicious of claims that a reverse mortgage will get you free anything–income or a free home. You should know by now that nothing’s free.

• Do know that you usually have the right to cancel a reverse mortgage within three days after closing.

Don’t:

• Sign any loan paperwork that you don’t completely understand.

• For married couples: Don’t take out a reverse mortgage using just one spouse as the borrower. A reverse mortgage in one borrower’s name comes due when that person dies. The consequences for the surviving spouse could include collection proceedings and loss of the home.

• Listen to scammers telling you that reverse mortgages are a way to avoid foreclosure or get out of debt.

A Living Trust is an important part of financial planning  

A reverse mortgage lets you access the equity you’ve built up in your home. As a borrower, you get a tax-free advance on your own home equity. You can choose how you want to receive this advance—it can be a line of credit, fixed monthly payments or a lump sum.

For most reverse mortgages, you must use the proceeds to pay off your existing mortgage; the remainder of the loan comes due when you move, sell the house or die. Reverse mortgages are somewhat complicated, and they can be risky. Because the audience is older Americans, the industry seems to be populated with more than its share of scammers who can’t wait to take advantage of older homeowners.

While a reverse mortgage can be an important source of income for many seniors, a Living Trust is a critical part of financial planning. Our Trust package includes a Power of Attorney, an Advance Healthcare Directive and a Will. We guide you through the process and we prepare the legal documents. Schedule an appointment with Guideway today.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

What if Your College Kid is Sick or Has an Emergency?

If your kids need help, these are the healthcare documents you may need

Sending kids off to school in the fall has always been an important ritual that marks the changing seasons. It’s an exciting time for kids: A time for learning, social development and a growing independence. Parents are just glad to get back into familiar routines.

Nothing’s normal anymore: Be prepared with health care documents

Anxiety over COVID is forcing new conversations as kids return to college campuses this fall. At 18 or more, these students are officially adults, but they still depend on their parents for food and shelter. Parents declare them on their taxes and pay for their health care. While these kids may be testing their independence, they remain closely tied to their families.

It may seem morbid to talk about health care documents for robust young people, but accidents and illnesses happen to young adults. COVID infects every demographic, and young people are vulnerable too. Nothing is normal anymore. If your kids are away at college and something happens to them, you want to be the one making decisions for them.

 

If there’s a medical emergency with your child, these three forms will help you come to the aid of your child.

 

1. Advance Healthcare Directive

Also referred to as a Healthcare Agent or Medical Power of Attorney, a Healthcare Power of Attorney. By signing this document, you are appointing someone to act on your behalf to make medical decisions if you become incapacitated. Your agent will have access to your medical records and your permission to talk with your health care providers. In this case, your son or daughter would sign this document, giving you, as a parent, permission to act in your behalf. At California Document Preparers, we include an Advance Healthcare Directive in our Living Trust package, along with our Power of Attorney.

 

2. HIPAA (Health Insurance Portability and Accountability Act) authorization (also called a HIPAA release)

This is a more narrow document that permits healthcare providers to disclose your health information to anyone you specify. A standalone HIPAA authorization (meaning that it is not incorporated into a broader legal document like an Advance Healthcare Directive) does not have to be notarized or witnessed; however we include Notary on our form.

This document alone will often suffice for you to get information from the health care institution treating your child. In a HIPAA authorization, young adults can stipulate that they don’t want to disclose information about sex, drugs, mental health or other details that they prefer to keep private. As with the broader Advance Healthcare Directive, a HIPAA release can also be included in a Living Trust, but it is always included as a standalone document in our estate planning package to conform with particular California rules and so that your agent doesn’t have to share your Trust document just to get health care information.

3. Power of Attorney 

A Power of Attorney enables a designated agent (in this case a parent) to make financial decisions on the student’s behalf. The POA can begin immediately after signing the document or only if your child becomes incapacitated. As the designated Power of Attorney, the agent can sign tax returns, access bank accounts, pay bills, make changes to a child’s financial aid package or figure out tuition problems.

Fortunately, most families will never need these forms, but it’s always a better idea to be prepared in case you do.

What else changes at 18?

As teenagers turn 18, they’re adults according to the law. They can now vote, serve in the military and on a jury, sign a contract and get married without parental consent. They still can’t legally drink alcohol and car rental companies usually will not allow them to rent cars, but their legal status is decidedly different than it was at 17. All males with U.S. citizenship must register for the selective service upon reaching the age of 18.

 

COVID has created urgency on so many levels

As the COVID crisis drags on, many more of our clients are scheduling appointments to create or update their Living Trusts. Our Trust package includes a Pour Over Will, and for those families with children under 18, it means that they can name a Guardian rather than having the court appoint one for them. Creating a Trust helps provide some peace of mind during these uncertain times. Best of all, we guide you through it and we prepare the legal documents.

Our Trust package includes a Will, Power of Attorney, an Advance Healthcare Directive and Incapacity Planning. At California Document Preparers, for most of our services, we charge one flat fee. We’re helpful, compassionate and affordable.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

ER Workers Worry: If They Die, Who Will Care for Their Son?

Dr. Adam Hill, an emergency room doctor, and Neena Budhraja, a physician’s assistant, both work in New York City public hospitals that are overwhelmed by the coronavirus. They sat down one night to address a growing concern: Determining who would be their 18-month son Nolan’s legal guardian if they became infected and died. These ER workers worry about who will care for their son if they die.

These aren’t just anxious parents. They work in two of the city’s busiest public hospitals

The couple spends their days and nights intubating terrified patients, navigating stretchers in crowded hallways and searching for clean equipment. The pandemic is putting unimagined strain on medical workers, exposing them to dangers and emotional stress unlike anything they have ever experienced. Among the deaths are those of their colleagues.

They talk to their colleagues to find out how others are keeping their families safe. Some send their children to live with relatives. Another doctor has moved to his basement, Facetimning with his children upstairs. One doctor is living at an airport hotel.

Adam and Neena don’t have those options

They take turns at their hospitals and return home to their young son. Neena has thought about quitting, yet feels a responsibility to her team. This is what she trained for. Yet both have lost colleagues to the virus, and their biggest fear has been infecting their families.

Neena and Adam were married in 2017, and they lived the kind of high-adrenaline life typical of those who work in emergency rooms. They trekked to Machu Picchu and climbed Mount Kilimanjaro. ER doctors are accustomed to the predictable unpredictability of ER life. But the coronavirus transcends everyone’s imaginings.

Adam knew by early March that something was very wrong

Adam recognized that something was seriously wrong when men in their 30s and 40s, otherwise healthy, were showing up at the ER with fevers or were having trouble breathing. They would deteriorate rapidly, gasping for air within a few hours. He kept waiting, thinking that his team would get a handle on these cases and turn a corner.

The hospitals began retrofitting the facilities for the virus

They installed huge fans in the ER to suck out dirty air to try to keep the virus from spreading. The fans are loud, so alarms go off constantly from equipment monitoring the breathing of patients on ventilators. The entire team is hoarse from yelling over the noise of the fans and the alarms. It’s chaotic, exhausting.

Taking precautions to stay safe

Neena covers her scrubs with a gown that hides her wrists. She wears an N95 mask, a face shield, a cap and gloves. She uses the same face mask for two straight shifts, instead of changing it between patients as standard protocol calls for.

When her shift ends, she tapes her N95 mask to the inside of her locker and wipes down her face shield and stethoscope with alcohol. She changes out of her scrubs in a bathroom, leaves her sneakers and takes a packed subway or bus home. The trains are crowded now because of virus-imposed service cuts. Arriving home, Neena quickly turns away from Nolan, throws her airtight bag of dirty scrubs into the laundry room — where they will sit for at least 48 hours before she washes them — and takes a shower.

COVAD takes a personal toll on healthcare workers

Adam is not sleeping well. Late at night, he scrolls through a Facebook group of fellow ER doctors. One doctor wears gloves and a mask at home to protect his family. For Neena, a colleague’s death was a turning point–the overcrowded emergency room, the lack of isolation rooms, the hallways jammed with people on stretchers waiting days for a spot in intensive care to open up. She thought about quitting. One day, Adam found himself “crying uncontrollably, just finally letting out all the emotions from the past month.”

Choosing a guardian for Nolan in case something happened to them

As Adam and Neena worked on their Living Trust, a key part of this was deciding on a guardian for Nolan—if something happened to them they wanted to make sure that they were choosing the person who would care for their son—not the court. Because of the virus, everyone’s life has become a little more uncertain–Adam and Neena named three backup guardians.

Despite the stress, long hours, sleepless nights and concern for the health of their families, both Neena and Adam had always planned to spend their entire careers practicing emergency medicine. Dealing with the pandemic has strengthened this commitment.

Doctors worry that if social distancing stops, the rate of infections will spike again

Over the course of ten days, they have seen a steady decline in new virus patients at their respective hospitals. The fear that they will get sick has not gone away, and colleagues continue to test positive. Doctors are realists; they worry that if people stop social distancing too soon, a second wave of cases will inundate the hospital.

During this health crisis, many are feeling an urgency to create a Living Trust 

Our Trust package includes a Will, Power of Attorney, an Advance Healthcare Directive and Incapacity Planning. We guide you through the process and prepare the legal documents. At California Document Preparers, for most of our services, we charge one flat fee. We’re helpful, compassionate and affordable. Schedule an appointment today at one of our three Bay Area offices in Dublin, Walnut Creek or Oakland. 

Note that our offices are open and we’ve instituted stringent sanitation procedures. We can also provide our services virtually.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

This story is based on a story in the New York Times by Jesse Drucker.

COVID Heroes: Scientists Are the New Rockstars!

Europe’s new heroes aren’t actors, musicians or politicians. The new celebrities are epidemiologists and virologists. These are the people who are drawing huge virtual crowds around the world during their regularly scheduled briefings. There’s a good reason for their popularity. COVID Heroes: Scientists are the new rockstars!

In a time of political disinformation and delusional happy talk, people want the truth

We need to know what to expect, to be able to make plans. We’ve learned that we can rely on these scientists—not necessarily our politicians–to provide accurate information.

In Italy, Dr. Massimo Galli, an avuncular director of infectious diseases

In a hospital in Milan, Dr. Galli quickly became a familiar face on Italian current-affairs TV shows, delivering no-nonsense updates about the virus. He called social distancing “the mother of all battles”. He understands the way Italy’s multigenerational families and geographical density made Italy’s infection rate so steep. Between broadcasts, Dr. Galli creeps back to his laboratory to help his colleagues with research.

In Greece, Prof. Sotirios Tsiodras, addresses the nation every day at 6pm

Professor Tsiodras’ delivery is flat, and he relies heavily on his notes as he provides the latest data on the confirmed sick, hospitalized or deceased. He offers practical advice—such as using a solution of four teaspoons of bleach per liter of water for disinfecting surfaces, including our hands. This church-going father of seven has been frank, proactive, alert to dispelling misinformation. Greece has fewer than 100 deaths since the start of the outbreak.

Dr. Christian Drosten has emerged as the voice of scientific reason in Germany

Long respected for the depth of his knowledge and willingness to share it with peers, Dr. Drosten has never sought the limelight. Colleagues have described him as an unlikely hero. Germany has had a relatively low death rate. As chief virologist at the Charité University Research Hospital in Berlin, Dr. Drosten is a sought-after guest on talk shows and the star of a daily podcast. He makes it clear that he “is a scientist, not a politician”.

Here in the U.S., Dr. Anthony S. Fauci is a highly respected immunologist

Dr. Fauci is the head of the National Institute of Allergy and Infectious Diseases. He has had a brilliant career, advised six presidents and received numerous awards, including the Presidential Medal of Freedom. He has been instrumental in developing treatments that enable people with HIV to live long and active lives. Dr. Fauci has been outspoken on the need for social distancing and being cautious about not reopening our economy while COVID cases are still on the rise. His honesty and forthright delivery have made him a hero of the left while angering those on the right who see his efforts attempting to undermine Trump. He now has security guards.

In Spain, Dr. Fernando Simón has become an endearing scientific hero

The director of Spain’s health emergency center, Dr. Simon delivers COVID updates. He acts as a counselor for anxious citizens who have peppered him with questions online, including whether people should take off their shoes before entering their homes (not necessary). Dr. Simón tested positive for the virus in late March, prompting a nationwide outpouring of sympathy and well wishes.

Legitimate COVID information will be coming from Dr. Fauci, the CDC or the WHO

It’s important to remember that developing a vaccine for this disease is going to take much longer than we would like. Making sure that it’s safe will take time, manufacturing it will take more time. And remember that we’re all part of this big global community—everyone must be vaccinated.

During this health crisis, many are feeling an urgency to create a Living Trust 

Our Trust package includes a Will, Power of Attorney, an Advance Healthcare Directive and Incapacity Planning. We guide you through the process and prepare the legal documents. At California Document Preparers, for most of our services, we charge one flat fee. We’re helpful, compassionate and affordable. Schedule an appointment today at one of our three Bay Area offices in Dublin, Walnut Creek or Oakland. 

Note that our offices are open and we’ve instituted stringent sanitation procedures. We can also provide our services virtually.

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Single, No Kids, No Sibs. Who Gets Their Assets?

Shelly and Doris were retired flight attendants who lived in Lafayette. They’d never met during their careers, but now that they were retired, they’d become great friends and loved to laugh and share stories over a glass of wine.

When Shelly went into the hospital for routine surgery and died from complications, it left Doris shocked and lost without her best friend. Shelly was only 64, and she’d left a handwritten Will but no Living Trust. Shelly had lost her sister and brother-in-law in a terrible skiing accident 15 years ago, but she was very close to their four children, especially her niece, Karen, and she’d named Karen the Executor in her Will. But without a Trust, the family would have to go through Probate.

Doris was shocked to learn that Shelley had more than $320,000 in a Fidelity account

Over the years, Shelly had made smart investments in Apple, Wells Fargo and Microsoft. The Fidelity account had no named beneficiaries, so it would have to go through Probate. As Executor, Karen would oversee the estate’s distribution among her designated family members.

Karen was a teacher who knew nothing about Probate, so she contacted a Probate attorney to help manage her aunt’s estate. After 18 months, when the court finally awarded the money to the family, the attorney charged nearly $10K for managing the Probate.

After this experience, Doris felt some urgency to create estate planning documents

Doris didn’t have kids or siblings. She had Social Security and a great pension, but she didn’t have family or close friends she could ask for help if she became incapacitated. Shelly’s niece Karen and her husband Kevin had moved in to Shelly’s condominium, and they’d become close, so she asked Karen for advice. Karen said she would be glad to be there for Doris, and Kevin agreed to be her backup.

Doris created a Living Trust with California Document Preparers

Doris came in to the Walnut Creek office to create her Living Trust. As part of her Living Trust package, she also created a Financial Power of Attorney, an Advance Healthcare Directive and a Will. Notary is included in the fee. Doris is leaving Karen and Kevin 20% of her estate; the balance will go to the church she has been attending for more than 20 years, Lafayette’s St. Elizabeth Seton Catholic Church.

During this health crisis, many are feeling an urgency to create Living Trusts 

Our Trust package includes a Will, Power of Attorney and an Advance Healthcare Directive and Incapacity Planning. We guide you through the process and prepare the legal documents. At California Document Preparers, for most of our services, we charge one flat fee. We’re helpful, compassionate and affordable. Schedule an appointment today at one of our three Bay Area offices in Dublin, Walnut Creek or Oakland. 

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy, Hayward and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Protect Your Family with a Living Trust and Guardianship

Every family right now is frightened by the magnitude of the coronavirus. They may be thinking about whether or not they should create a Living Trust. For those families with children under 18, an important part of our Trust package is the Will, where you can name a Guardian to care for your children if something should happen to you.

Naming a Guardian and a Creating a Will are parts of our Living Trust package

If both you and your spouse should die, your children will need a Guardian. If you do not leave instructions in the form of a Will, the court will not have any guidance from you, the parents of the children, and will therefore choose the Guardian. While it is painful to think of leaving your children, it can be reassuring to know that in the case of this unlikely eventuality, they will be properly cared for by someone you love and trust.

Using a Trust to control your children’s inheritance

Sometimes it’s not simply a matter of ensuring that your children inherit your estate after you are gone. You may want to guide and control that inheritance–especially if your children are still young. That’s where a Living Trust comes in.

A Living Trust can manage any assets the children receive if their parents die. If you’re worried about your children getting a large sum of money when they are too young to handle the responsibility, as might happen with a Will. You can identify the age at which they will gain control of the funds.

Rather than getting the entire amount at 18, for example, they would gain control of the money when they are older and better prepared to inherit a large sum of money. It’s reassuring to remember that most parents of young children live long enough to see their kids safely to adulthood. But sometimes the unexpected happens. Having a Will or Living Trust in place now can provide peace of mind about your children’s future.

During this health crisis, many are feeling an urgency to create a Living Trust 

Our Trust package includes a Will, Power of Attorney and an Advance Healthcare Directive. We guide you through the process and prepare the legal documents. At California Document Preparers, for most of our services, we charge one flat fee. We’re helpful, compassionate and affordable. Schedule an appointment today at one of our three Bay Area offices in Dublin, Walnut Creek or Oakland. 

We service the entire East Bay and North Bay areas

Berkeley, El Cerrito, Richmond, Pinole, Alameda, San Leandro, Castro Valley Newark, San Lorenzo, Concord, Alamo, Danville, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Pittsburg, Antioch, Brentwood, Oakley, Discovery Bay, Pleasanton, San Ramon, Livermore, Tracy and Fremont. Our clients also live in the Napa Valley, Benicia, Vallejo, Martinez, Fairfield.

Is it Time to Check Your Beneficiary Designations?

This is the time of year when we see a lot of new clients who are following up on their New Year’s resolutions to create or update their Living Trusts.

But when was the last time you checked to see whom you named as the beneficiary on your retirement account, life insurance policy, or annuity? You’d be surprised at the number of people who have prior spouses or deceased relatives still named as beneficiaries on retirement accounts at former employers, or on life insurance policies purchased long ago and forgotten.

Updating a beneficiary designation: It supersedes your Will or Trust

The beneficiary designation is a legally binding document that supersedes your Will or Trust; neither will override the person you have named as your beneficiary in a life insurance policy, annuity or retirement account.

If something had happened to our client, his ex-wife would have inherited most of his assets

This story, unfortunately, is not that uncommon. It illustrates the importance of periodically reviewing your Trust allocations. Our client hadn’t reviewed his Trust in more than eight years, and he was shocked to discover that if something happened to him, all of his assets, exclusive of the home he held with his current wife, would go to his ex-wife, who was still identified as his Successor Trustee, his Power of Attorney and Agent for his Advance Healthcare Directive. We scheduled an appointment to completely rewrite his Living Trust. 

A forgotten 401k plan beneficiary update results in husband’s receiving all of wife’s assets

Another client’s wife had worked for a large multinational for many years. It was a second marriage, and when she became seriously ill with cancer, she created a Living Trust. She wanted her two children and husband to each get one-third of her assets. However, she failed to update her beneficiary designation for her 401k plan, so that sizeable account went directly to her husband. He wanted to honor her wishes, but if he cashed in the 401k and paid it to the kids, he would have taken a huge hit on his taxes.

He and the kids set up an IRA in his name, and the kids were named as the beneficiaries. They agreed that, with each distribution he made to them, he would withhold enough to cover the taxes. While this ultimately worked out, it would be an ongoing administrative hassle. It could have been avoided by updating the retirement plan beneficiary form at the wife’s employer. When identifying your primary beneficiary, you should also name a contingent beneficiary. In this way, if the primary beneficiary predeceases you, you have already specified who should inherit the account.

A Living Trust is an important part of estate planning, and our comprehensive Trust package includes a Power of Attorney and Advance Healthcare Directive. Schedule an appointment today by contacting us at one of our three Bay Area offices. Our dedicated team is helpful, compassionate and affordable.