Silence of the “Silent Generation” extends to finances

Laurie MacNaughton © 2017

Yesterday I met with two couples, one in their 60’s and another in their early 80’s. The younger couple was discussing a reverse mortgage as part of their pre-retirement financial planning. The older couple, retired for years, has encountered serious health issues and is drawing down retirement funds at an unsustainable rate. They’ve also been late on their past few mortgage payments, which is likely to complicate their reverse mortgage qualification process.

Couples in their 60’s, couples in their 80’s – this is a pattern so common I had to reflect for perhaps the hundredth time: where are the couples in their 70’s, members of the so-called “Silent Generation”?

I can only conclude the following: 60 may well be the new 40 – but 80 is still 80. However, when you’re in your 70’s and still in the workforce, long past the age at which your parents retired, it can be hard to fathom that within a decade your finances may be stressed and your health may be less than stellar. A strong work-ethic and an uncomplaining acceptance of circumstances served the Silent Generation well…right up until it didn’t.

And here’s the real rub: if the couple I met who now are in their early 80’s had sought financial help five years ago, odds are they would not be in the straights they’re now in.

A reverse mortgage can help in several ways with financial survivability in retirement: it can pay off financing currently on the property. It can establish a line-of-credit safety net that grows over time. Or, reverse mortgage proceeds can be structured as a monthly stipend that arrives each month for as long as at least one homeowner resides in the home.

Reverse mortgages are not a fit for everyone – no one financial product is. But a reverse mortgage is going to play an important role in many homeowners’ financial health in retirement, particularly when used as part of a sound, informed, long-term retirement plan.

If you would like to explore how an FHA-insured reverse mortgage might help with your retirement plans or with the plans of those you love, give me a call. I always love hearing from you.

Laurie

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Soldiering Through: Men on the Front Lines of Caregiving

Laurie MacNaughton

When my firstborn was barely two she and her best friend, a little boy named Willoughby (really), spent the afternoon playing with an assortment of stuffed toys. While Willoughby practiced drop-kicking the animals against the wall, Jessica sat diapering them. When I fed them peanut butter sandwiches for lunch, Jessica nibbled hers into a rainbow; from his, Willoughby manufactured a gun.

Assertions of my feminist friends notwithstanding, as the mother of girls I firmly believe it is the easy province of a woman to care for the weak, the sick, the young, the aged. And, be it nurture or nature I think these tasks come harder to men. Thus, I have unqualified respect and admiration for what seems to me to be an increasing number of adult sons serving as primary caregivers for aged and infirm parents.

I am just returned from visiting my own mother whose agonizing last chapter is rapidly drawing to a close. Seated beside her, hour after hour, is my oldest brother. A retired Bell Labs particle physicist and former Ivy League professor, this caregiving role is not an easy fit. Yet there he sits, tending her unglamorous, repetitive, relentlessly-increasing needs. I took his place as much as possible during my stay, and invariably he headed for bed in an attempt to catch up on months’ worth of missed sleep.

For my part, when my mother slept I returned phone calls. Back-to-back I spoke with two men, one a prospering real estate broker who, weekends, travels a thousand miles each way to help with his mother’s care; I then spoke with an aging adult son serving as primary caregiver for his advanced elderly father. Not many days earlier an elder law attorney called me in reference to a client trying valiantly to honor his mother’s wish to age in place, despite her degenerative condition.

Then tonight, Thanksgiving night, as I drove home from the airport I took a call. An unspoken universe of sacrifice implicit in the adult son’s one statement hit home in a way he could scarcely imagine: “My concept of normality has gone to pot,” he said simply.

Nothing more need be said, my friend. Well am I aware of what you have forgone to care for your mother. And well I know how meager is the support for a man serving on the front lines in this role as primary caregiver.

Residential managed care has an indispensable function in today’s world. Professional in-home caregivers are invaluable, and hospice a godsend. But rarely are any of these the full solution to aging parents’ needs. It is appropriate that family cares for family – and there simply is no substitute for family.

So men – those of you who diaper and dress and swab and shower an aging parent, who mop and launder and scour and scrub until late into the night: you are an example to all of us privileged to know you.

And if you would like to talk about help financing your aging parents’ needs – or would just like to talk – give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS 506562] is a freelance writer and Reverse Mortgage Consultant at Middleburg Mortgage, a Division of Middleburg Bank. She can be reached at: 703-477-1183 or LMacNaughton@MiddleburgBank.com.

Adult Children of Aging Parents

The vast majority of aging Americans want to remain in their own home as they age. However, making the necessary home modifications and paying for appropriate in-home care can create a serious financial drain on adult children. Increasingly, long-term retirement planning includes a reverse mortgage as a means to make it possible for our parents to age in place, and to address their income shortfalls in retirement.

Following is some helpful information when considering an FHA-insured reverse mortgage (or HECM) for your parents:

• The bank does NOT get your parents’ home once they permanently leave the home.

• The home always remains titled in your parents’ name.

• If the home goes down in value, neither your parents, nor you, nor your parents’ estate can ever owe more than the value of the home when it is sold. If you or your siblings wish to purchase the home, you secure your own financing and buy the home – just as you would if your parents had a traditional “forward” mortgage.

• Proceeds from the reverse mortgage are tax-free.

There are unique challenges that face families as loved ones age. As the daughter of an aging mother, I know first-hand the challenges of helping an older parent, and I understand what you’re going through as you assist your parents with their financial needs.

Call me at any time with questions…or if you just want to discuss needs, as I maintain an extensive list of aging-related service providers. I look forward to speaking with you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com

There is No Stage 5

I don’t know when I dozed off, but it was sometime after watching the mercilessly utilitarian clock above the door turn one. I do know when I awoke.

The petite night-duty nurse, in for her 3:00 rounds, was saying, “Wait – wait, Ms. Jean. Let me unplug you.”

Unplug? Unplug? Scary things come to mind when that word is uttered in a hospital room.

And as I stirred to wakefulness I saw the unbelievable: my mother, not 10 hours out of surgery – and who had not eaten for two weeks – was struggling to get out of bed to use the restroom. “Lollipop,” she said, using a nickname I probably last heard when I was three, “Lollipop, can you grab the blanket so it doesn’t touch the floor? And see if you can find my robe and slippers.” No wristband ID confirmation necessary here.

My mother has Stage 4, primary-site pancreatic cancer; there is no Stage 5. She has multiple, large liver lesions, “hot-spots” on her bones, and a spot on one lung. When I arrived last Friday she was slipping in and out of consciousness, so jaundiced and gaunt she resembled the figure in Edvard Munch’s The Scream, if someone had taken a yellow highlighter to it.

Four o’clock Wednesday she was rushed into surgery to have a stent inserted into the common bile duct in hopes of making her more comfortable. Now here she was, not just intent on getting up, but on doing so under her own power – and with attention devoted to tangential issues. I half expected her to ask me if there were fresh guest towels in the bathroom and roses in the guestroom.

This woman, my mother, needs no urging from Dylan Thomas: she goes not gentle into that good night. I flew to Arizona assuming I would plan a funeral. Instead I have had truly intimate hours with a woman to whom intimacy does not come easily.

But no matter how feisty, how determined, how strong – or strong-willed – the person, pancreatic cancer always wins. Additionally, her cancer came as no surprise: my mother is a Wasserman, and it’s always cancer that kills Wasserman women.

The surprise came, rather, in what preparations remained unaddressed, issues that almost assuredly would have created unnecessary distress if she had slipped away last weekend as roundly anticipated by doctors and family alike.

The following is not intended to be a complete list of vitally-important documents, but it includes some biggies which can be easy to overlook.

1)      A professionally prepared, recently updated will. My parents have had a will for decades, but it was last updated 10 years ago and was woefully out of date.

2)      Trust documents.

3)      A professionally-prepared power of attorney.

4)      An advanced medical directive, prepared by an attorney.

5)      A letter of competency, prepared by a medical doctor who has known the patient dating back to the time the patient was mentally competent. I highlight this because this letter of competency can be almost impossible to obtain once the patient has lost mental competency – whether it’s due to the onset of dementia, a coma, or any other condition that might render the patient unable to make his/her own legal, medical, or financial decisions. I have included two samples, below.

6)      Home mortgage information.

7)      A list of bank and brokerage accounts, life insurance policies, annuities or other managed accounts, along with user-names, passwords, and account numbers.

8)      The whereabouts of the key to the safe deposit box.

9)      The whereabouts of any handguns. When my father died I thought ours was the only family who struggled to locate the handgun. I have since heard from many others who have had similar issues.

10)   Funeral and burial instructions, and documents for any pre-paid arrangements.

There is not much one can do to make the loss of a parent easier. But, there are many ways to make it harder – and a frantic search for crucial items can be a monumental source of distress.

Against all odds, against all professional assumptions, my mother came home today. But we all know the day is hard upon our heels when she will not come home at all.

But now at least we can devote these last days to her, rather than to a mad scramble to assemble critical documents.

If you have stories or experiences you would like to share, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com

Below are sample letters of competency. I typically encourage family members to print these off for the attending physician so s/he is sure to include necessary elements:

Physician’s Letterhead Here

Date

To Whom It May Concern:

Jane Doe (DOB 06/06/30) has been a patient under the care of this medical practice since 19**. She has been seen on a regular basis throughout this time. Medical records indicate that at no time during her care has she lacked capacity to make independent legal, medical, and financial decisions.

Ms. Doe was diagnosed in (month, year) with _________. However, it is the professional opinion of this medical practice that this has in no way impaired her ability to make her own legal, medical, and financial decisions.

Feel free to contact me at (000) 123-4567 if you require further information.

Sincerely,

­­­­­­­­­­­­____________________________________

John Brown, MD

Or:

Date

To Whom It May Concern:

Jane Doe (DOB 06/06/30) has been a patient under the care of this medical practice since 19**. She has been seen on a regular basis throughout this time. Medical records indicate that until (month, year) she had mental capacity to make independent legal, medical, and financial decisions on her own.

Ms. Doe was diagnosed in (month, year) with dementia. It is the professional opinion of this medical practice that she no longer has the ability to make independent legal, medical, and financial decisions.

Feel free to contact me at (000) 123-4567 if you require further information.

Sincerely,

­­­­­­­­­­­­____________________________________
John Brown, MD 

Did you hear the one about the lawyer?

Laurie MacNaughton

Friday I ran into the office to pick up some papers when the phone rang. It was a Virginia attorney with a knotty case involving a profoundly handicapped, aging client. “I’ve looked at many options,” the attorney said, “and I’m wondering if a reverse mortgage might be a solution.”

After describing the situation, the attorney mentioned, “This person has no one left who cares, and for my part, he’s really become more family than client.”

Not the first time

This was far from being the first time I have heard a similar story, so perhaps it was the direness of the client’s situation that made me reflect – reflect on the unwavering, unflagging, relentless effort Elder and Disability Law attorneys expend advocating for their clients. Reflect on the extraordinary measures attorneys go to in seeking justice for the vulnerable. Reflect on the care and concern – at times without pay – attorneys pour out protecting the seemingly forgotten members of our communities. I probably know a hundred Elder Law attorneys, and I can honestly say I can’t name one I would not entrust with the affairs of my own family.

I’m not naïve – I know there are bad lawyers, just as I know there are bad doctors, teachers and clergy. We all know there are bad loan officers – I’ve known some of them. Heck, over the years I’ve worked with some of them. But as a group, I would have to say lawyers get a disproportionately bad rap.

So here’s an open letter of thanks to the attorneys of our communities, those who spend time, talent, and at times even their own treasure, advocating, protecting, interceding on behalf of those whom many of us will never meet.

As one who also spends countless hours working out solutions for our seniors, personally I thank you. And please know I consider you among the unsung heroes of our age.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant, President’s Club · Middleburg Mortgage · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · Laurie@MiddleburgReverse.com

   Visit me on Facebook at www.facebook.com/MiddleburgReverseMortgage

Harland, Hindenburg…and Harney

Laurie MacNaughton

April 15, 1912, while on its maiden voyage, the RMS Titanic struck an iceberg and sank within three hours. The ship carried far too few lifeboats, and 1,502 passengers and crew died. Harland and Wolff, who hired the naval architect, was not available for comment for this blogpost.

May 6, 1937, German airship Hindenburg caught fire, exploded, and plunged to the ground at Lakehurst Naval Air Station. Thirty-six people died. The German dirigible had not been designed to use hydrogen; rather, the Nazi government switched to the alternative gas when helium was not available. Neither the Hindenburg’s pilot nor its designer was available for comment for this piece.

Let’s add another historical tragedy:

According to a July 19, 2013 Washington Post article by Kenneth R. Harney, in 1997 Sarah C. Hoge took out a proprietary reverse mortgage. This private-label mortgage was not the FHA-insured reverse mortgage overwhelming represented by today’s reverse mortgages. The terms of Ms. Hoge’s mortgage were apparently horrendous, and her estate is still seeking resolution of issues caused by this terribly-designed product.

Early private-label, non FHA-insured reverse mortgages were filled with structural peril and some left true devastation in their wake; few reasonable minds differ on this point.

The Post’s Mr. Harney, however, appears either remarkably biased against today’s reverse mortgages, or woefully uninformed on their basic tenets, as evidenced by his statement, “Reverse mortgages…can be…potentially costly for [elderly borrowers’] heirs.” I respectfully refer him to the FHA HECM website http://www.hud.gov/, specifically section 6 which states, “No debt is passed along to the estate or heirs.”

Mr. Harney, if you are seeking a crusade, let me recommend you turn your sites toward the proliferation of hard-money lenders, the financial source some seniors seek out when scared away from the FHA-insured reverse mortgage – by articles such as yours, as self-reported by seniors themselves. This scaremongering is unbefitting a contributor to a reputable publication, and is a tragedy in its own right.

The historical movement of tragedy is regulation, redesign, redress and remediation – whether we’re speaking on topics of engineering, medical techniques, political systems – or financial products. As it has matured into the mainstream of financial products, reverse mortgage has gone through these selfsame stages, and has come out far better for it. I believe I am not alone in wishing journalism would go through its own maturation process, moving from sensationalistic pieces to well-researched reporting.

The FHA-insured reverse mortgage is never going to be the full solution to financial needs in retirement. However, when used as part of a comprehensive financial plan, it is going to be an increasingly important part of funding Americans’ ever-increasing longevity. Irresponsible or ill-informed reporting does no one any favors – not seniors, not their heirs, and not an esteemed publication.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · 20937 Ashburn Road, Suite 115 · Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgReverseLady.com

Visit my Informational Blog at https://middleburgreverselady.wordpress.com/

Adult Children Supporting Aging Parents – The Gift That Keeps on Taking

A question I get asked a lot is whether I run into greedy adult kids who don’t want their parents to do a reverse mortgage.

Answer? Yes. But rarely.

More common by far is the family I met with Sunday – a wonderful, functional extended family which includes two adult sons and their widowed mother. Since their father’s passing three years ago the sons have been supplementing their mother’s meager income. However, each son has children approaching the college years, and the mother’s medical expenses are on the rise. They know they cannot continue supporting their mother at the current pace.

The gift that keeps on taking

We all have heard one thing or another referred to as “a gift that keeps on giving.” I have come to call the financial support of an aging parent by an adult child “the gift that keeps on taking.” Money the adult child should be setting aside for retirement is instead being gifted to an aging parent to augment insufficient income.

A short aside about gifting

Currently you can gift another person $14,000 per year before hitting a tax liability. This is called the annual gift exclusion.

In addition to what you can give per year, there is a lifetime exclusion. In 2013 the lifetime exclusion is set at $5.12 million. Gifts that exceed the annual $14,000 limit count against the lifetime exclusion. Frankly, for most Americans this is not an issue. However, if you do go over this amount, the tax liability packs a wallop.

And just exactly how big a wallop? Up to a cool 35%.

Gifting among family members is often under the table. However, make no mistake: this is not a gray area. The IRS requires you to keep tabs on your gifts – and to report these gifts – so it will know how much of your lifetime exclusion has been used up when you die. If the Internal Revenue Service catches you exceeding the annual amount, you will pay taxes, interest, and penalties.

Meanwhile, back to…

Sunday’s family. Not only are the two sons are supporting their mother with after-tax earnings, but over the past couple years they have found themselves having to watch the annual gift exclusion. This is a pricy fix – and one that has long-term implications.

For the average family, the biggest financial boon an aging parent can give an adult child is financial self-sufficiency. This increases the likelihood adult children will head into their own retirement with savings intact.

Life is long and getting longer. Medical costs are high and getting higher. And few people get 10 years down the road into retirement and find themselves financially better off.

Reverse mortgage is not a fit for everyone. But for many, not only is it a good option – it is an excellent option. It lifts the burden on the upcoming generation and allows seniors to live out their final years in dignity, comfort and independence.

If you are – or someone you know is – considering a reverse mortgage, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank ·  20937 Ashburn Road, Suite 115 · Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem