Are reverse mortgages worth it?

You’ve seen the commercials with Robert Wagner extolling the wonders of a reverse mortgage. Is he trying to sell you a bill of goods? Is a reverse mortgage worth it? That depends.

What exactly is a reverse mortgage? Reverse mortgages are available to homeowners who are 62 and older. To be eligible, you must live in your home as your primary residence.

Reverse mortgages work in a different way than traditional mortgages. With a traditional mortgage, you make payments to a lender. In a reverse mortgage the lender makes payments to you. The exact amount you receive will be based on the value of your home. Also a reverse mortgage allows you to keep your home.

Getting paid.

There are few ways to get paid with a reverse mortgage. You can opt for a lump sum payment, a credit line, a monthly payment, or a combo of the three.

Which you choose depends on your situation and how you want to use the money. Some just want it as a supplemental income. Some need it for a one time expense and others want to use the money as sort of a rainy day fund for emergencies.

A reverse mortgage is only viable if you have a big chunk of equity in your home. If you still have a small mortgage you will need to talk to a financial adviser to figure out your best options.


Where the reverse mortgage sort of matches up with taritional mortgages is with fees. There are closing costs like in regular mortgages. Then there are loan originiation and appraisal fees. The lendr may charge loan servicing fees an mortgage insurance premiums.

Know what the funds will be used for. 

Have a plan. Before you embark on a reverse mortgage it is important to have figured out what you will use the funds for. If your in your early 60s you’ll have to make sure you don’t spend your money too frivolously to make sure you don’t run out later in retirement.

Check out other options 

If you’re short on dough, don’t have any family that wants to inherit your home, and you don’t want to leave it, then a reverse mortgage might be for you. If you have other  assets or income other solutions might be a better fit. You can sell your home to your kids or refinance your mortgage.



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James Gandolfini’s estate mistake

The late actor, James Gandolfini died and left an estate worth an estimated $70 million. Now thanks to bad estate planning, the IRS may take up to 50% of that estate.

The larger-than-life actor gave $1.6 million dollars to various friends and relatives. He split the rest up among the following people: his two sisters-30%, his wife-20% and 20% to his daughter. His son was the benefactor of a life insurance policy which is not subject to taxes.

The New York Daily News quotes William Zabel, the estate lawyer for the stars, as saying,

“It’s a nightmare from a tax standpoint.”

Zabel said the “big mistake” was leaving 80% of his estate to his sisters and his 9-month-old daughter. That makes the money subject to death taxes at rate of 55%.

You can read Gandolfini’s will here.

So, even being a rich celebrity doesn’t mean you can’t get bad advice.  With that in mind, here are six tips that will help you pick the right probate/estate planning attorney.

  1. Look for an estate attorney with a customized web site, rather than one with a prepackaged generic site with lots of pretty pictures. Pick a custom site loaded with informative wills, trusts or probate articles about the area of law that pertains to your situation. Content-heavy sites are prepared by experienced wills and trust lawyers, not web masters. Avoid those slick sites with lots of flash. You want an old-school law firm with knowledge, not glitz.
  2. Look for an estate planning law firm that specializes in the area of law that you need. A general law firm that says they do everything cannot possibly do everything well. The content on the web site will give you an indication of what the firm does best.
  3. Contact the NY estate lawyer directly and try to speak to the probate attorney who will be handling your case. Don’t settle for being diverted to a paralegal or an assistant. If the estate planning lawyer is too busy to speak with you initially, ask for a call back. If he or she is too busy to give you the attention you need, maybe you should try someone else. When you speak with the estate lawyer, make sure he/she is a good listener. They can’t help you if they don’t listen. It is important that you feel comfortable with your estate planning lawyer. First impressions are critical.
  4. If the New York probate attorney has client reviews on their site, read them all. You will be able to differentiate between honest reviews and canned ones. Don’t be put off by a single bad review; it will only legitimize the others. After all, you can’t please everyone all the time.
  5. Ask the NY probate lawyer to explain the entire process to you. Do not be shy; you have the right to know. A good estate lawyer should be able to explain even the most complex matter in simple, easy to understand terms. Remember, you are the boss since you are paying the bill.
  6. Finally, go with your gut. Picking the right wills, trusts or estate lawyer can be a challenge. Once you find the right person, the rest of the process will be much easier.

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Is estate planning still needed?

Last year Congress passed the Tax Cuts and Jobs Act of 2017 which pretty much killed the aptly named death tax. It didn’t actually kill it just exempted those who leave less than $11 million to their heirs.

Since the idea of no leaving a federal tax burden to their heirs, many people are questioning the need for estate planning since one of the main reasons to estate plan is to lessen the tax burden. But there is more to estate planning than tax issues. has a very useful piece by Tracy Craig. Craig is a Fellow at the American College of Trust and Estate Counsel.  She has some useful info on estate planning beyond taxes.

To read more click on the links below:

State Estate and Inheritance Taxes Exist for Many

Probate Can be Costly

Many Beneficiaries Have Issues

Blended Families are Common and Can Be Complicated


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What happens to your pets when you die?

Over 80 million people in the U.S. have at least one pet. That’s 65% of all households. Cats are more popular than dogs, but that’s still a ton of pets. There is a very good chance that they are treated as family members. Unfortunately, many people don’t include their furry loved ones in their estate planning.

A good way to plan for your pets is to create a living revocable trust. That way you can leave instructions and money so your trustee can provide for your pet. In that tust you can also assign someone to take care of your pet, but you should make sure they are willing to take on the task.

If you don’t create a living trust, you can always leave what they call a letter of instruction to your loved ones. While the letter is not legally binding it does spell out your wishes as to the care of your beloved pet.

Another option is if you move into an assisted living facility. You can find one that allows pets.

It is a good thing to remember that although your pet might be like family to you, legally they are just property. That is why it behooves you to include your pets in your estate planning just as you would your humans.

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Ultra rich and Dynasty trusts

The new tax law doubles the amount that can be passed to heirs without them having to worry about estate and gift taxes. The amount works out to about $22 million for a married couple, but is only in place until 2025. Due to this, the uber-rich are turning to what are called dynasty trusts, which secures inheritances of their grandchildren, great-grandchildren and beyond.

 Joan Antoniello, of Mazurs USA Wealth Advisors told Bloomberg News, ““For the mega wealthy, it’s really a window of opportunity that’s limited.”
Dynasty trusts let the richest Americans protect and preserve wealth for generations, while minimizing tax bills. Treasury Secretary Steven Mnuchin appears to have used one prior to assuming his government role. They can be funded tax-free with assets up to the exemption limit, which was $10.98 million in 2017 for couples, even though complex tax-planning techniques can get around that threshold.

Blloomberg reports that about a dozen of the nation’s top wealth planners say they’re seeing “increased interest in the trusts as clients look to capitalize on the additional $11 million they can now easily shift over. Some families want to transfer money out of their estates into the trusts in case Democrats take back control of Congress and pull the limits back down before 2025, while others say it’s best to move assets before they appreciate even more.”

Estimates are the new rules affect fewer than 2,000 families per year, but billions of dollars are at stake. A University of California, Berkeley study found that 0.1% of families control a growing share of U.S. wealth, from an estimated 7 percent in 1978 to 22 percent in 2012. The net worth of the wealthy has zoomed even higher in recent years as values of stocks, real estate and private businesses have climbed.

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