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

Play My Guy

Recently I attended an event at which the featured speaker, an attorney based in the Washington, D.C. area, led off with, “I hate reverse mortgages – I HATE them.”

Well, I’ll say this: if you’re an attorney, there’s nothing like a forceful opening statement.

As a reverse mortgage specialist who has been in the field several years, I am always interested in hearing what people have to say about reverse mortgages. So, after the event I asked the attorney what he hates about reverse mortgages. I thought he was going recite the same-ol’, same-ol’ outdated information, personal bias, and general peevishness toward the product. But I was wrong.

Here was his answer:

He said his firm sees reverse mortgages after a senior’s family has completely spent down savings, burned through assets, and utterly depleted the reverse mortgage. Then they turn to him for help.

I have to say, I have seen the same thing – an unplanned, undirected spend-down of assets which leaves the senior with no money and few options. Needless to say, this can result in a less-than-optimal outcome. And I hate it too.

In fact, I’ve given this approach to handling finances a name. I call it “Play My Guy.”

“Play My Guy” Approach to Financial Planning

I married young, and we started our family before I even graduated college. Consequently, I was still in my twenties when my girls were old enough to start playing video games, and I’ll admit it – I like video games. But as my girls got older and games got more sophisticated, I didn’t keep up my game skills. So every once in a while I’d be walking through the room where my kids were playing with friends, and would hear, “Hey, Mom, play my guy.”

Play your guy? Play your guy? I can’t play your guy – I don’t even know what this game is called.

A couple other things here.

I don’t know the rules to the game – I’ve never played this game. But let’s say I grab the manual and speed-read the rules. I still don’t have any experience. I’m going to get slaughtered. Preservation of self-esteem dictates you don’t just jump into something you’ve never done…even if it’s in the company of a bunch of 13-year-olds.

In much of life common sense prevents us from jumping headlong into certain activities. And yet, many adult children of aging parents plunge right into handling their parents’ finances and legal matters. The parents say the equivalent of, “Here, play my guy,” and one of the adult kids says, “SureI’ll play your guy. I can do this.”

Let’s say for argument’s sake the adult kids put in hundreds of hours on the internet and learn all about wills, trusts, estates, Medicare, eldercare, long-term care. Let’s pretend they’ve really learned all the rules. They still don’t have any experience. They’re going to get slaughtered – and it’s not going to be a roomful of 13-year-old girls laughing at them. In fact, no one’s going to be laughing.

So what this attorney was saying was that he hates mopping up after a slaughter. He hates being called into a situation in which there are few – if any – good options left. However, this same attorney conceded he recommends reverse mortgages when they’re used in strategic retirement planning.

A reverse mortgage is a powerful financial tool when used as part of a comprehensive, long-term retirement plan. It can mean the difference between financial sustainability and a less-than-desirable fallback position.

But just like with many things in life, rarely are deferred planning, poor management, and a piecemeal approach ingredients for a good outcome.

Give me a call or shoot me an email regarding your experiences with finances in an aging population. I always love hearing from you.

Laurie

Laurie Denker 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 · www.middleburgmortgage.com/lauriem

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

The New Version of Old

In preparation for writing this I queried friends on who came to mind when I said “old.”

Four of the five answers? “Granny.”

Being, as my husband says, a “pop-culture illiterate,” I had absolutely no idea about anything relating to the topic, so I googled “Granny.” Wanna guess how old Granny was?

60. As in S-I-X-T-Y. And we’re talking a show that first aired in 1962 – not 1862.

New Version of “Old”

Like everyone else, I know 60-year-olds who are running marathons, starting new businesses, attending their daughter’s high school graduation, and looking forward to at least another quarter century of life, a significant portion of which they plan to spend in retirement.

However – however…

This new version of retirement comes with a price – literally. And just what is that price?

According to Ray Ferrara, head of ProVise Management Group in Clearwater, Fla., as quoted in Forbes.com, that price is about $2.69 million (http://alturl.com/ejre6).

Why so much?

In the first decade of retirement, retirees tend to travel more, make more long-anticipated home improvements, entertain more, and dine out more than they did before retirement.

When you add increased medical costs and a life expectancy of 90, the new version of retirement ain’t cheap.

In fact, by some estimates, over the course of the next three decades seniors can reasonably expect their cost of living to triple.

So what to do?

1)     Have a plan: work with a qualified financial planner who specializes in retirement planning.

2)     Stick to the plan: a plan is only as good as its implementation.

3)     Look into ways to reduce unnecessary spending: most of us have expenditures that deliver appallingly little bang for the buck.

4)     Consider a reverse mortgage.

Remember, reverse mortgage was never intended to be a replacement for a sound financial retirement plan. However, it can play an important role in augmenting what is already in place, and slow the burn-through rate on other retirement instruments.

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

Laurie

Laurie Denker 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 · www.middleburgmortgage.com/lauriem

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

 

 

The Scarlett O’Hara Approach, or Hope Is NOT A Strategy

A friend of mine has a crystal ball sitting on his desk, and taped to its base is a sign that reads, “Temporarily Out Of Service.”

Too bad – because right about now most of us could really use a crystal ball.

Most financial professionals agree that planning for our future is as much art as it is science, and that determining how much money we’ll need to get us through the golden years is akin to trying to predict the future.

This said, however, there is general consensus on what doesn’t work.

The Scarlett O’Hara Approach, or Hope Is NOT A Strategy

Scarlett O’Hara might have been very surprised to learn her approach to bad news – “Tomorrow is another day” – has a name. Optimism bias, also known as unrealistic optimism, is a common trait that causes people to believe they are at low risk of experiencing a negative event. Adolescence is heavily associated with optimism bias, a bias that frequently leads to an increase in risky behaviors. In the medical realm, optimism bias causes individuals to put off measures that contribute to good health.

And for many, optimism bias causes us to believe financial matters will get better on their own as we head into retirement.

Rick Gow, wealth management advisor with Lara, Shull, and May in Falls Church, Virginia, says, “A measure of pessimism is not bad when you’re planning for retirement. You can’t just ‘hope’ you’re going to have enough to get you through the most expensive years of life. A plan is of paramount importance.”

With life expectancies now extending into the 90’s, most of us are eventually going to draw upon every savings “bucket” we have available. And that’s where the FHA Reverse Mortgage comes in.

Reverse Mortgage was never intended to be a replacement for a sound financial retirement plan. However, it can play an important role in augmenting what is already in place, and slow the burn-through rate on investments and other retirement instruments.

If you, or someone you know, would like to look into the potential benefits of a reverse mortgage, give me a call. I always love hearing from you.

Laurie

Laurie Denker 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

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