Globe Syndicate

 

For release Friday August 12, 2005

 

 

The Sandwich Generation . . . Helping Your Aging Parents

 

by Carol Abaya, M.A.

 

 

            REVERSE MORTGAGES CAN HELP MAINTAIN

QUALITY OF LIFE

 

Question:  My parents (late 80s) only have a small stock portfolio and a house worth $200,000.  Their income has been reduced because of the stock market.  Now they need more care (paid care).  If they sell their stock, their income will be further reduced.  They don’t know what to do.

 

Answer:  A two-point solution combines identifying and utilizing community/government programs and leveraging the house’s equity.

 

COMMUNITY HELP:  Seniors in many cities are entitled to either a reduction of real estate taxes and/or a government rebate (currently available in New Jersey).  Seniors with low income can also obtain discounts from utility companies and food stamps.  Food stamps is one of the country’s most underutilized programs by seniors.  Use of food stamps can help maintain better health and nutrition.  There are also senior and sliding-scale fee services, which include transportation, meals on wheels and home care.  Investigate all of these avenues.  It will take numerous telephone calls, but the time spent will help your parents in the long run.

 

REVERSE MORTGAGE:  Income can be increased with a reverse mortgage.  This is exactly what it seems to be.  The homeowner receives money each month, based on the value of the house and life expectation. 

            When the house is sold (either before or after the death of the owner(s)) the amount owed the mortgage company is claimed and the remainder then should go to the heirs.  A clause in the mortgage MUST say that the house MUST be sold “at fair market value” and the “the remaining money is given to the heirs.”

            An attorney should carefully read the mortgage document BEFORE the owner(s) sign it.  Also, you should deal with a local bank or mortgage company.  DO NOT deal with a company in another state or get the name from the internet.  There are scam companies out there, and the National Consumers League constantly issues warnings.

            If a sandwich generationer (adult child) has money, a private reverse mortgage will provide income to the elder, yet maintain their sense of pride.  This also reduces the value of the house for estate fees (in states where probate fees are based on asset value.)

            By inheriting the house, the sandwich generation gets a stepped up basis value (value of the house on date of death of the parent), and when the house is sold there are generally no capital gains taxes.

            Private reverse mortgages can be tricky when there are several children.  But the one who “gave” the mortgage will be compensated first, and the remainder divided among all the heirs according to the Will.

            A qualified attorney should be used.

 

WARNING:  Herbs and vitamins can be just as toxic as prescription drugs.  Latest warning comes from Mayo Clinic, which warns that Kava can cause serious liver damage and should be avoided.  Kava is banned in Canada and some European countries because of the negative impact on the liver.  Kava is found in many dietary supplements, so labels should be carefully read.

 

 

Are you juggling doing errands for your aging parents, your children, yourself and working at the same time?  Are you tired, stressed out and upset that your once vibrant parent is now frail and needy?

 

Do you feel alone?  Rest assured you are not alone!  The Sandwich Generation is dedicated to the 50 million Americans who may have elder/parent care concerns and/or responsibilities.

 

 

 

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Do you have a question? Send it in. Although letters cannot be answered individually, appropriate letters will be answered in this column whenever possible. Letters may be edited. Send letters to Ms. Carol Abaya, mail direct to her at PO Box 132, Wickatunk, NJ 07765-0132 or contact her through her web site: thesandwichgeneration.com.

 

Carol Abaya is an international-award-winning journalist and creator of the unique magazine The Sandwich Generation: You & Your Aging Parents.

 

NOTES TO EDITORS: text = 567 words; other material = 160 words

 

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