For those considering purchasing the home of elder relatives who are strapped for cash so they can age in place, consider all options first, the Los Angeles Times advises in a recent article—reverse mortgages included.
“A sale of the home or a reverse mortgage may well prove to be a better choice,” says financial advice columnist Liz Weston. “A reverse mortgage wouldn’t completely eliminate their home costs, but would substantially lower them — whoever winds up paying the bill.”
One son-in-law tells Weston his 73-year-old in-laws have gone through their retirement fund, and now owe $325,000 on the home after borrowing against it. The son-in-law and wife are considering purchasing the home home so the elderly couple can remain their house until their final years.
Purchasing the home outright can pose serious risks, including affecting Medicaid eligibility for the elderly couple, pressure from creditors and unforeseen life circumstances can affect ability to pay bills, among others.
“Before you do anything, please consult a tax professional and an attorney with experience in estate and elder law,” she says.
Read the full article here.
Written by Cassandra Dowell