Perlin Estate Planning

Is a Reverse Mortgage the Right Call for You?

“Seniors are living much longer these days, and many face the prospect that their financial resources will grow thin. If you’re one of these folks, a reverse mortgage could be part of your retirement plan.”

A reverse mortgage lets you take tax-free cash equity out of your home, as you continue to live in it. You don’t make any mortgage payments, and the loan doesn’t affect your Social Security income or Medicare benefits.

But, as The Observer News warns in the recent article, “Reverse mortgages can be a key component in retirement planning,” there are pros and cons.

Many people like reverse mortgages because it’s really a loan option that can help homeowners ages 62 and older with equity in their homes enjoy a more comfortable retirement. You’re still able to live in your home and retain the title.

You can also receive cash at the closing and open a line of credit to access the rest, as needed, after a year. You receive monthly payments for a set period or for your lifetime. You can also choose any combination of these options.

Even if you have an existing mortgage, you may still qualify.

 However, there are some disadvantages. Because you’re not making payments and receiving income, the loan balance increases as interest and fees accumulate. In addition, because your equity is decreasing, there’ll be less of an inheritance to leave your heirs. While they can still inherit your home, they must first pay any outstanding balance that you owe.

The reverse mortgage must be for your primary residence, and if you permanently move away or no one on the title is living in the home, the reverse mortgage is due immediately.

The closing costs and fees on reverse mortgage loans are significantly higher than on conventional loans. These are deducted from the loan proceeds and are offset by the fact that you’re not making mortgage payments.

Reference: The Observer News (February 15, 2018) “Reverse mortgages can be a key component in retirement planning”

Should a Widower Add His Kid to the House Deed to Avoid Probate?

“Medicaid utilizes a five-year lookback to determine if you gave assets away within five years of your application for benefits. Transferring the home could make you ineligible for a period of time.”

It’s not uncommon for a senior who’s a widow or widower to want to help his or her children with the estate, by re-deeding their mortgage-free home to include a child or children.  However, there’s a specific way to do this.  It is important to be aware of the effect of this action on government benefit programs, like Medicaid.

nj.com advises in its recent article, “The risks of changing your home's deed,” that to avoid the probate process, a person could change the deed to the home to add an adult child as Joint Tenant with Right of Survivorship. In that way, the home will avoid probate, when the senior passes away.

There can be some potential negative consequences.

If the home has unrealized capital gains when he passes away, only his half of the value of the home would be eligible for a step-up in basis. If a senior goes ahead and sells the home while he’s still alive, he can exclude up to $250,000 of capital gains from tax, if it was his primary residence in two of the five years directly preceding the year it was sold.

 However, if the daughter lives out of state, adding her to the deed will mean that her half won't be eligible for the exclusion because her primary residence is in another state.

In addition, if the daughter has creditors to whom she owes money, those creditors could attach a lien to her half of the senior’s home.

One other thought is whether the senior owns other assets or has long-term care insurance or other resources to pay for long-term care, should it become necessary.

If the senior in our scenario transfers half of his home to the daughter, it could be an issue if he needs long-term care and needs to qualify for Medicaid. Medicaid has a five-year lookback to determine if you gave assets away within five years of your application for benefits. Transferring the home could make the widow here ineligible for a time.

Speak to an experienced elder law attorney about your specific circumstances to be certain you understand all of the consequences of taking such action.

Reference: nj.com (January 29, 2018) “The risks of changing your home's deed”

Changes Made to Reverse Mortgage Process: Big News for South Florida Seniors

“A recent change added two steps to the process of obtaining a reverse mortgage.”

The goal of the change in the reverse mortgage process is to reduce defaults on reverse mortgages by making sure borrowers have the wherewithal to pay property taxes or home insurance.

A recent article in the Houston Chronicle’s, “Mortgage: What reverse mortgage financial assessment means to you,” discusses the steps to determine reverse mortgage eligibility. 

First, conduct an assessment of your finances, especially your credit history and income; then set aside part of the mortgage proceeds (based on that financial assessment) to help cover estimated tax and insurance payments over the expected life of the youngest borrower. These changes are effective for reverse mortgages issued on or after April 27, 2015.

These requirements are designed to decrease the default rate on reverse mortgages. Roughly 12% of reverse mortgages were in technical default in 2014, so borrowers hadn't paid taxes or insurance or both. In addition, borrowers had no proceeds remaining from their reverse mortgages.

A recent 2016 study from Boston College found that the new rules could reduce reverse mortgage default rates by as much as half.

The financial assessment includes an analysis of the borrower's credit history, including any foreclosures, defaults, late mortgage payments, and late payments for property charges. 

Research reveals that a prospective borrowers' credit scores are big predictors of their likelihood to default on reverse mortgages. It examines income from employment, self-employment, Social Security, alimony, child support, military income, pensions and retirement accounts. If the lender sees that the borrower isn't willing or able to make tax and insurance payments, a portion of the mortgage proceeds will then be set aside to cover these future costs.

Do you live in South Florida? Have you been considering a reverse mortgage? Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: Houston Chronicle (Sept. 16, 2016) “Mortgage: What reverse mortgage financial assessment means to you”

Divorce After Age 50 and the Impact on Miami, Florida Retirement Plans

“Divorce can be painful emotionally and financially for anyone. But when the split happens later in life, the less time you have to recover from the economic hit. And, far more is at stake.”

There’s an increasing number of older adults who must address this issue. The divorce rate among U.S. adults 50 and older doubled between 1990 and 2010, and about one in four divorces include someone over 50. The data through 2014 found the rates have been about the same in subsequent years.

ABC News’ recent article, “Keeping Some Green in Gray Divorce,” says the reasons for the rise include longer lifespans, more women in the workforce, changing notions about marriage and higher rates of remarriage, which boost your odds of splitting.

Here are some things to consider when divorce suddenly becomes part of your retirement plan. The issues involved in a "gray divorce" are much like those of a divorce at any age, but things like limited working years ahead, complicated assets and adult children may make the process much tougher.

Be sure you have a team of professionals to guide you through the process. This should include an attorney, mediator, financial planner, accountant and a therapist. In a gray divorce, a financial expert is important because you have a lifetime of assets built up. Retirement finances are critical and complex, and you should seek the advice of professionals.

A big issue with an older couple is who gets to keep the family house. You should be receptive to alternatives that will leave you in a better position. Selling a home or choosing other assets in the settlement may give you the income you’ll need in the future. Plus, downsizing can significantly help manage your expenses.

The biggest challenge for individuals going through a gray divorce is making certain that there's enough money to provide a comfortable retirement. Consider and reexamine your options based on the settlement. You might need to delay retirement, return to work, downsize or make other adjustments.

Remember that healthcare can be expensive in retirement. If you’ve been married 10 years or more, you may qualify to receive spousal Social Security benefits.

Make sure you update all the legal agreements and accounts you've set up during the course of your marriage, especially wills, estate plans and beneficiary designations for retirement accounts.

Do you live in South Florida? If you are considering a divorce, or are recently divorced, it's essential, and well worth the cost, to have an estate attorney on your team. Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: ABC News (September 7, 2016) “Keeping Some Green in Gray Divorce”

“I Do” Means Sharing Financial Info Too in Coconut Grove, Kendall and Pinecrest, Florida

“More than 40% of couples recently shared that they don’t know how much their partner earns.”

A sound understanding of your financial status is critical to planning, budgeting and saving toward retirement. Many couples who share their lives together have no idea what their total household income is but still maintain that they regularly have open conversations about their finances. Huh?

Wjbf.com’s article, “9 Questions to consider in planning your financial future,” reports that the Couples Retirement Study by Fidelity Investments revealed that many couples need a better understanding of their joint financial lives. That said, many elect to divide up the tasks of money management, bills, assets and debts. Although a seemingly equitable idea, it can leave one or both without all of the important financial details.

Both partners need to collaborate when it comes to financial planning, money management and decision-making. That means sharing the responsibilities of building and protecting their financial future.

To help with this, here are nine questions to consider when thinking about your financial lives:

1. What’s your philosophy on money? Consider your values and whether you’re a spender or a saver, how you use debt and what the role of money is in your life.
2. What’s our budget? Understand the cost of living and if you are able to save for future goals.
3. What do we own, and what do we owe? Take stock of your collective assets and liabilities—that’s anything that involves money.
4. Do we have an emergency fund? See how much you have and whether it’s titled in both names so you’ll both have ready access if needed.
5. What are our plans for our savings? Determine if you’re funding a college education, buying a cottage on the lake or preparing for retirement. Fix your short- and long-term priorities and save for them as a team.
6. How much will we need to live comfortably in retirement? Think about how each of you envisions the future so that you can plan, save and invest to meet that goal.
7. What are we saving for retirement and where is it located? Keep track of all 401(k)s, IRAs and CDs dedicated to retirement. Also, know the amount you’re contributing and whose name is on each account.
8. Where do we keep our important documents? Make certain estate planning documents are up-to-date and stored in a secure spot—along with tax records, insurance policies and other valuable documents.
9. What will happen when one of us dies? Take the time to do your estate planning—including writing a will, powers of attorney and health care directives—so your family is cared for after the loss of one or both of you.

If you need help answering these questions, sit down with an experienced estate planning attorney.

Do you live in South Florida? Getting married isn't just about exchanging rings and lots of love. It's about exchanging financial information and ensuring a secure future together. Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: wjbf.com (August 24, 2016) “9 Questions to consider in planning your financial future”

Before You Panic and Sell the South Florida Family Home, Talk with an Elder Law Attorney

“Think of a couple in their late 80s with the husband needing nursing home care right away. They own a home and have about $210,000 in the bank. An elder law attorney can help the wife stay in the family home and preserve most of the remaining assets to keep her comfortable, while helping the husband receive Medicaid benefits.”

Let’s look at a difficult but very common scenario where a husband or wife has an immediate need for nursing home care. Unfortunately, the couple is financially unprepared and clueless regarding their options on long-term care. Many times a couple in this situation will think they have no choice but to sell their home to pay for that care. But before they do this, they should consult with an elder law attorney.

The Boston Globe, in its recent article, “Seniors have more options than selling their home,” says that an experienced elder law attorney can be the key to protecting your family’s health and financial well-being. This includes such assets as the family home.

An elder law attorney can show the senior couple that they have options—in most cases, they don’t have to sell their home to pay for emergency long-term care.

A couple’s money is often tied up in their house, so to fund the long-term care, they go ahead and sell it. When they sell it to qualify for Medicaid, which will cover the cost of long-term care, they exhaust the proceeds of the sale—in addition to the rest of their money. This leaves the healthy spouse—who can still live independently—with little in the way of financial security. This outlook can potentially compromise that individual’s health as well.

Before taking any action, talk with an elder law attorney and explore the options that would best meet the family’s needs. It’s critical to plan ahead. An elder law attorney will help you plan for the future to ensure your wishes on housing and health care can be satisfied.

Studies show that 55 percent of Americans die without a will or an estate plan, according to the American Bar Association. An experienced elder law attorney can offer assistance at any stage of a person’s life.

Don’t panic and sell your family home—speak with an elder attorney first to save it.

Do you live in South Florida? Are you thinking about selling your parents home to pay for nursing home care? You may not need to! Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: Boston Globe (August 19, 2016) “Seniors have more options than selling their home”

Sharing a Miami Home with Another Senior Friend Can be a Win-Win

“Shared housing is not uncommon in retirement, and for good reason.”

NJ 101.5 says in its recent post, “Buying a retirement home together,” that more seniors are looking into shared housing options for financial reasons—as well as for friendship and companionship. Many of these retirees have discovered that sharing expenses and experiences can improve their quality of life. Nonetheless, there’s a bit of estate planning that you’ll need to consider if you move ahead with this arrangement to make it a great experience.

There are two major issues: (i) what happens if you don’t want to live together, and (ii) what happens when one of you dies.

Titling the property is critical in eliminating potential problems in the future.

There are two ways to title the property— “Joint Tenants with Rights of Survivorship” or as “Tenants in Common.” With Joint Tenants with Rights of Survivorship (JTWROS), each party owns the property equally and undivided. Depending on state law, if one party wants to transfer his or her share to another person during his or her lifetime, the other owner has to consent and sign the resulting deed. After the death of one owner, rights of survivorship mean that owner’s share is transferred automatically to the surviving owner. These survivorship rights trump the deceased owner’s will or state inheritance laws.

Tenants in Common (T-I-C) is where owners own equal or unequal shares of the same property. Each owner has full control over his or her share. The one owner can transfer his or her share to another person at any time without the approval of other owners. If an owner dies, this individual’s share of the property can be passed along to a person named in his or her will.

If you choose T-I-C, it’s important that both owners have a current Last Will and Testament that designates how each share of the property is dealt with upon one owner’s death.

Doing some planning right now will avoid a possible headache in the future. You can enjoy your shared retirement home stress-free. Work with an estate planning attorney to be certain that you understand the issues and have the right estate planning documents created to meet your wishes.

Do you live in South Florida? Are you planning a move to South Florida for your retirement? Have you considered sharing a home with a friend (or two)? Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: NJ 101.5 (August 2, 2016) “Buying a retirement home together”

Bonjour! Cross-Border Moves & Retirement Take Planning, Even from South Florida

“Cross-border planning can help you keep as much money as possible securely in your pocket as you move from country to country.”

If you’d like to retire abroad or move back to the U.S. after working overseas, you’ll need to calculate how it will impact your finances. Financial planning means considering tax rules, currency fluctuations and political instability.

Nasdaq’s recent article, “Money Crossing Borders Requires Special Planning,” says the good news is that a new kind of financial planning is emerging to help people navigate the potential pitfalls of such moves.

If you are or plan to be…

• An American with financial interests outside of the U.S.,
• An American who lives abroad,
• An American who has dual citizenship,
• A foreign citizen moving to the U.S., or
• The foreign children or spouses of American citizens,

…you can definitely benefit from cross-border planning.

You need to make sure you protect your financial interests.

Financial and legal issues around the world can be very complex and change frequently. When you’re talking about money internationally, there are questions of immigration, taxes, labor, real estate, securities and other topics of concern. Problems can pop up in cross-border financial transactions such as penalties for failing to pay taxes or financial institutions refusing to transfer your money between domestic and foreign accounts. That said, here are some of the most important components of cross-border planning to consider:

Cash management: Remember there are disclosure requirements and regulations governing the movement of funds in and out of a country that can tie up your money, and if a U.S. citizen doesn’t disclose accounts overseas on the annual Report of Foreign Bank and Financial Accounts form, he or she could get hit with a $10,000 per violation penalty (or more!). Plus, currency exchange rates can really affect the value of your money.

Income taxes: American citizens living abroad still have to pay U.S. income taxes—plus any taxes from the income they earn in the country where they live and work.

Retirement planning: Every country is different as to their laws on the taxation of retirement savings. Failing to adhere to the rules may mean overpaying taxes on retirement funds, underpaying and being subject to penalties, or missing out on the government benefits for which you’re eligible. For instance, an employee who wants to rollover a U.S.-based retirement plan such as a 401(k) to Canada could find those accounts becoming taxable as soon as they are rolled over! However, if you do your homework and understand the tax laws of both countries, you should be able to handle the transfer mostly tax-free.

Estate planning: Foreign countries may not recognize and honor an estate plan created in the U.S. Inheritance tax regulations and tax treaties are different with every country. Heirs might inherit tax-free in one place and be hit hard with taxes in another. Talk with an estate planning attorney and make sure that your plan will work effectively if you will be retiring abroad.

Investing: There will be taxes and regulations to contend with when looking at investment income generated or moved internationally.

Insurance: Some insurance benefits may not be 100% transferable from country to country—like your U.S.-based health insurance policy may not pay your benefits in a foreign country. Also, a foreign country may not let your heirs receive a U.S.-based life insurance payout without some taxes. Sound planning may help you avoid these issues.

If you or your money will be moving in or out of the U.S., be careful and make sure you speak with a qualified attorney about cross-border planning before you make the move.

Do you live in South Florida? Are you considering a move to another country? Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: Nasdaq (July 27, 2016) “Money Crossing Borders Requires Special Planning”

How to Solve the Issue of Passing Your South Florida, Miami House to Your Heirs

“You're going to die. Someday, I mean. Probably not anytime soon. Hopefully.”

No one likes to think about passing away, but when you do, you're going to leave stuff behind. If you're leaving behind modest assets, then Uncle Sam doesn't care too much about what happens to them. Your heirs can do whatever they want with them. However, Fox News says in its post, “You're Going to Die—Here Are the Best Ways to Deal with Your Home,” that if you have a home or land you want to leave to loved ones, it can be complicated (even if you have a will).

However, there are a few ways to help straighten things out now.

If you have a couple of kids and a house, as your heirs, the kids will have to wait until after the property passes through probate court. This can take months and can be expensive. Taxes may be levied as well, which can be substantial on a modest home. Once that's done, the kids are then able to take title to the house or sell it; however, there are ways to avoid—or at least minimize—these problems.

1. Tenancy by the entirety. If you're married and own property together, there’s typically not much you need to do to make certain your home is passed on to your spouse. If both spouses have their names on a deed, most states recognize tenancy by the entirety, which says that when one spouse dies, everything he or she owns goes to the other spouse. That's it. No probate at the first death.

2. Joint tenancy. If you're not married or if you want to pass your property to some other relative, you should prepare by transferring part of your interest to that other person to create a joint tenancy. This is nearly identical to tenancy by the entirety, but there is no wedding ring involved. These are the easiest ways to transfer title, but there are downsides. Remember, the other person now owns your property as well. You have now exposed the property to outside control and to the lawsuits, creditors, divorces and other issues of another party. Yes, your property could be lost due to the financial troubles of the person whose name you just added to the title. The better answer may be to create a living trust.

3. Living trusts. If you place property in trust, it means that you’re letting someone else—the trustee—take care of it for the benefit of another person—the beneficiary. However, with a living trust, you can act as the trustee of the property yourself and can elect to pass it on to another person only when you die. You can also change your mind and name a different beneficiary. Trust language can be complicated. This is definitely not a do-it-yourself project. Generally speaking, a living trust will avoid probate, and the transfer is usually smooth and seamless.

4. Land trusts (if valid in your state). Like living trusts, land trusts have the same anonymity and ease of transfer. They also require a setup fee and an annual fee on top of that—though typically this fee is less than $100. Unlike a living trust that can hold all sorts of assets, a land trust can hold only one thing: land. A living trust offers a lot more flexibility. In light of this, land trusts are usually set up when someone wants only to pass down real property or as part of a more complex estate planning strategy.

Ok, we’re all going to die, and our loved ones will be sad. However, if you own real estate, you can make this aspect of settling your estate much easier for your loved ones after you pass.

Do you live in South Florida? Have you considered your house, condo or land in your estate planning? Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: Fox News (July 22, 2016) “You're Going to Die—Here Are the Best Ways to Deal with Your Home”

Making the Move to a New South Florida or Miami Home in Retirement

“For many older adults moving from a beloved family home to a senior community, assisted living or nursing home can be, at best, a daunting thought, and at worst, a traumatic experience.”

The recent article at capecod.com, “5 Tips for Seniors Planning a Move: Think ‘Resizing’ Not ‘Downsizing,’” explains that elder law attorneys are sensitive to the special needs of older clients and their families and that there’s no substitute for experience.

If your loved one is aging, you should seek help from an experienced attorney and implement the following advice to best support your loved ones.

First, it’s important to emphasize that these folks are “resizing,” not downsizing. Moving to a new home is the start of the next chapter in their lives—rather than the end.

Accentuate the positive and get them to think about what they’re gaining rather than losing.

Keep in mind that the seniors, as well as their families, are under tremendous stress. Staying calm and being organized is a big source of support. When you help your loved ones “resize” to a smaller space, start early and allow them the time to go through their things to decide what belongings they want and which ones they need. Possessions in the “need” category take priority over those they want.

It’s nice to get a floor plan of the new home to help determine what furniture they’ll be able to take with them.

Also, by thinking ahead about what to do with the possessions they’ll need to part with, your loved ones might find a worthy charity that would receive their donations. To help with the transition to their new life, encourage them to consider it "giving" and not "losing" their possessions.

Do you live in South Florida? Do you have a loved one who lives in South Florida who may need assistance during a transition? Call me (305-443-3104) right away for peace of mind. I can help!

• I'm an exceptionally experienced Florida Bar Board Certified Estate Planning Attorney,
• I'm a Florida Bar Board Certified Elder Law Attorney, focusing on ALL legal issues related to aging,
• have prepared over 4,000 estate plans in 30+ years in practice,
• have administered over 600 estates through Probate, and
• am a Certified Financial Planner Professional™, plus
• I am also a Florida Certified Public Accountant (CPA).

Of course, if you would like more information about General Estate Planning in South Florida, I have a very informative website you are welcome to visit for more information.

Reference: capecod.com (July 7, 2016) “5 Tips for Seniors Planning a Move: Think ‘Resizing’ Not ‘Downsizing’”