This is like a morality check for some people. In other-words, is it irresponsible of me/us to spend a portion of the kids ‘expected’ inheritance? I haven’t read the Bible or the Quran (just to name a few) enough to know if this is a moral matter or not but, I certainly doubt it. This is probably more of a socio-economic matter that families have to resolve more than anything else. Here are the typical hemispheres of thought people fret over:
Benefits; Enjoy a portion of the savings you have netted for all the past hard work you’ve performed. Sometimes this money is just used to survive on or, it’s used for medical purposes, neither of which can be deemed as unreasonable.
OR
Negative; Reduce the amount of inheritance the child/children receive thereby minimizing some of their debts and potentially provide for a less stressful lifestyle for them and their children.
Hmmm. Decisions as such can be daunting.
If there is any comfort in knowing some facts when weighing this decision, here’s a few tidbits to stew over. First; You are limited in how much a family can draw out of the house so you are most likely to leave a significant amount to the kids after the house is sold anyway. Two, you can pay it back if you want. Three; if you pull out a $100,000 in equity from the house then, regrettably the worst case scenario occurs, but there is still $75,000 in the bank - you haven’t spent nearly as much as you possibly could have hence, this all goes back to the estate.
Reverse mortgages have many other benefits. Read this article by C. Robert Vernon - www.practicepro.ca/LAWPROMag/ReverseMortgagesVernon.pdf I communicate the facts on them and there are certainly many more as you would have read in Mr. Vernon’s article above. If you are interested in learning more or pursuing an equity take out with no monthly payments for seniors, I can answer them for you (at no cost or commitment to you), no problem.
By Greg LaBella
www.greglabella.com
