Listen to Your Elders - Ideas On Surviving an Economic Crisis

I have been working with older folks my whole life, first as a hospital volunteer, then in church and community groups, and for almost 15 years as an elder law attorney.  One of the unique aspects of my work with older people is the wealth of personal history each and every person recounts. 

I can vividly remember listening to my grand father talk about trench warfare in France in 1918, my father witnessing a kamikaze attack in the South Pacific, but the most recurring theme of all the stories from family and elder law clients is money.  These stories inevitably started with the father of the family losing his job, the market collapsing and everyone in the family having to pull together to make the ends meet. 

Yes, even the children worked to contribute to the family's well being. 

Clothes were passed down from sibling to sibling.

Shoes were repaired (one pair for everyday, one pair for Sunday - when everyone went to church).

Meals were simple and shared as a family - candy and ice cream were special treats (few people would ever go to a restaurant, most of those were in hotels and meant for travelers).  No need to diet, since food was for nourishment and not entertainment.  Farmers came in to sell local produce; strawberries were for Summer, potatoes and squash were for Winter

Noone trusted one bank - best to keep money here and there and some "pin" money in cash.

There might be one car that was used until it stopped working - walking to school (even in foul weather) was the only way to get there.

Children shared toys, parents read aloud to their children after homework; women knew how to sew, bake, knit, play the piano and manage household resources; men mowed their own lawn (and maybe a wealthier neighbor's lawn for spare change), disciplined their children, worked two jobs, and respected their wives.

Grandma helped care for the young children (or were the children helping to care for Grandma?)  She lived upstairs and when she died she was waked in the front room.

There were few brands.  What things that were bought at the store were often only available in one color, flavor or style; but were of good and consistent quality.

The message really was simple.  Be simple.  Hold fast to your family.  Find pleasure in your relationship with each other and with your God.  Most of all, don't live beyond your means.

 

Elder Brother Helps Pope 'Accept Weight' of Old Age

Once in a while it's nice to get a little perspective on things.  I mean, we are all aging every day, but at some point you also need to take stock and look inward.  This little news clip really got me, most especially the words "serenity, humility and courage."  These are not merely idol words, but, at least to me, goals worth achieving.  Take a minute. Take stock of your own life.  Be serene.  Be humble.  Be courageous.

(From Associated Press)

VATICAN CITY -  Pope Benedict XVI said he is living out his old age with courage, thanks to the help of his elder brother, Vatican Radio reported yesterday.  

Benedict, 81, mused aloud about growing old at a ceremony Thursday to make his brother, Georg Ratzinger, an honorary citizen of Castel Gandolfo, the lakeside town near Rome that hosts the papal summer residence.  Georg, a priest in Germany, is 84.

"We have reached the last stage of our life, old age," the pope said.  "The days to live are progressively growing fewer.  But even in this stage, my brother helps me to accept the weight of every day with serenity, humility and with courage."

The brothers recently vacationed together in the Italian Alps.  Georg is a former choirmaster who is now nearly blind.

Facebook - Jon & Kate Plus 8 and 108 other friends

One week ago today I joined Facebook on the invitation of one friend from high school. In that short time I have amassed 118 "friends", all people that I have known over the years around town, schools and clients. It is a fascinating way to have just that level of relationship that you want with someone from the past without the commitment of an actual telephone call or awkward drink at a reunion. You control your own photos, so people only see you in the best light and you control the information, so those dark and dirty bits stay in the shade. I think a simple modification of Facebook for elder law situations would be to use it as a communication center for families facing crisis and the issues around crisis management. The "friends" could be the service providers, family members, elder law lawyer and others that need to be 'au current' with goings on in the life of the elder. Hmmm. Maybe I should invent Facebook for elder care??? What would I do with a few billion dollars????

Reverse Mortgage: Reverse Mortgage Mayhem and Irish Redemption

The problems are starting to happen:

  • A loan officer who gets caught pretending to be a borrower at closing.
  • A borrower dead for 15 years - still on the title, so his 48 year-old son with the same name takes a reverse mortgage, and almost gets away with the money.
  • An elderly woman on Medicaid benefits is talked into taking a lump sum  reverse mortgage and her otherwise protected money is taken for reimbursement by Medicaid, leaving her penniless.

Mortgage scams have been around as long as there have been mortgages (as you've learned in past blogs, reverse mortgages have been popular since the Roman Empire - literally "loans until death").

Reverse mortgages are available in Ireland, India, United Kingdom, Australia, the U.S. and other countries in various forms. "Life loan" (Irish/UK term for a reverse mortgage) programs are very similar to U.S. reverse mortgages. Here's a link to a program brochure for Bank of Ireland's life loan program: Bank of Ireland.

There are significant differences in these programs compared to a typical U.S. FHA reverse mortgage. First, the borrowing limits are tied to age and are quite low, generally around 25% of property value. Second, the interest rate is fixed for 15 years and there is a pre-payment penalty for early payment unless it is due to death, moving out of the property for more than 6 months or the sale of the property. Lastly, the program will not lend against property that appraises lower than €200,000 (about $275,000) although reverse mortgage loan limits are quite high at €400,000 (about $550,000).

One big difference between U.S. reverse mortgages and the Irish program (similar to the UK and Australian programs) is the borrower is required to have independent legal advice as part of the transaction. This would be a very positive step for the U.S. reverse mortgage industry, because so many elders do not understand the full consequence of their borrowing and the U.S. counseling certificate program is limited in its scope.

Many experienced elder law attorneys who could affordably advise elders that having each potential borrower retain an elder law lawyer would not be a large economic burden but could reduce the risk of improper loans substantially.

Not only does the Irish reverse mortgage program require legal counsel prior to and at closing, but it contains a unique requirement that would help reverse mortgage servicers recoup loan proceeds more efficiently. The Bank of Ireland reverse mortgage program requires the borrower to have a will and to notify the bank of its contents (as to executor) prior to closing.

The long list of new reverse mortgage products coming to the market reek of the influence of sub-prime lending and of Wall Street's thirst for profits.

These new reverse mortgage programs, for the most part, are not written to make reverse mortgages more affordable or understandable, but rather to make them more profitable to both mortgage lenders and Wall Street.

In the past weeks, Congress picked up the cause of elders with reverse mortgage specific components of the FHA Modernization Bill working its way to President Bush's desk. More important for the reverse mortgage industry, this bill increases FHA lending cap limits, reduces the maximum origination fee and makes the HECM (Home Equity Conversion Mortgage) product more flexible (i.e., allowing a HECM for the purchase of real estate, which can be compelling from an estate planning perspective under the right circumstances).

Watch Congress, HUD and responsible mortgage wholesalers such as Mark Burton at Beacon Reverse and respectable mortgage brokers like Ed Barrett at Your Home For Life and Brett Kirkpatrick at Mortgage Financial Services to continue to be watchdogs for the reverse mortgage industry. They will help guard against it blowing up into a sub-prime-type fiasco, only hurting elders by limiting access to their home equity just when they need it most.

Life's Continuum - Law for Life Means from the Start

It occurred to me as an Elder Law lawyer that I am really a lawyer that handles the concerns of life and death generally.  My occupation is literally about life and death situations everyday.  It is how we came upon our new banner of Law for Life.  But as I reflect on what it means to hold such a responsible and important role I am struck by the spectrum that life is, from the smallest twinkle in an expectant mother's eye to an aged man gasping for his last ethereal breath.  In the spirit of being a steward of the very continuum that makes us human, I offer this powerful poem by Robert Frost that to me embodies grief, love, compassion, Men are from Mars and Women are from Venus, and Yankee reserve.  Those that know me know I am a big fan of late 19th and early 20th century literature.

Robert Frost (1874–1963). North of Boston. 1915.

Home Burial

HE saw her from the bottom of the stairs
Before she saw him. She was starting down,
Looking back over her shoulder at some fear.
She took a doubtful step and then undid it
To raise herself and look again. He spoke 5
Advancing toward her: “What is it you see
From up there always—for I want to know.”
She turned and sank upon her skirts at that,
And her face changed from terrified to dull.
He said to gain time: “What is it you see,” 10
Mounting until she cowered under him.
“I will find out now—you must tell me, dear.”
She, in her place, refused him any help
With the least stiffening of her neck and silence.
She let him look, sure that he wouldn’t see, 15
Blind creature; and a while he didn’t see.
But at last he murmured, “Oh,” and again, “Oh.”

“What is it—what?” she said.

“Just that I see.”

“You don’t,” she challenged. “Tell me what it is.” 20

“The wonder is I didn’t see at once.
I never noticed it from here before.
I must be wonted to it—that’s the reason.
The little graveyard where my people are!
So small the window frames the whole of it. 25
Not so much larger than a bedroom, is it?
There are three stones of slate and one of marble,
Broad-shouldered little slabs there in the sunlight
On the sidehill. We haven’t to mind those.
But I understand: it is not the stones, 30
But the child’s mound——”

“Don’t, don’t, don’t, don’t,” she cried.

She withdrew shrinking from beneath his arm
That rested on the banister, and slid downstairs;
And turned on him with such a daunting look, 35
He said twice over before he knew himself:
“Can’t a man speak of his own child he’s lost?”

“Not you! Oh, where’s my hat? Oh, I don’t need it!
I must get out of here. I must get air.
I don’t know rightly whether any man can.” 40

“Amy! Don’t go to someone else this time.
Listen to me. I won’t come down the stairs.”
He sat and fixed his chin between his fists.
“There’s something I should like to ask you, dear.”

“You don’t know how to ask it.” 45

“Help me, then.”
Her fingers moved the latch for all reply.

“My words are nearly always an offence.
I don’t know how to speak of anything
So as to please you. But I might be taught 50
I should suppose. I can’t say I see how.
A man must partly give up being a man
With women-folk. We could have some arrangement
By which I’d bind myself to keep hands off
Anything special you’re a-mind to name. 55
Though I don’t like such things ’twixt those that love.
Two that don’t love can’t live together without them.
But two that do can’t live together with them.”
She moved the latch a little. “Don’t—don’t go.
Don’t carry it to someone else this time. 60
Tell me about it if it’s something human.
Let me into your grief. I’m not so much
Unlike other folks as your standing there
Apart would make me out. Give me my chance.
I do think, though, you overdo it a little. 65
What was it brought you up to think it the thing
To take your mother-loss of a first child
So inconsolably—in the face of love.
You’d think his memory might be satisfied——”

“There you go sneering now!” 70

“I’m not, I’m not!
You make me angry. I’ll come down to you.
God, what a woman! And it’s come to this,
A man can’t speak of his own child that’s dead.”

“You can’t because you don’t know how. 75
If you had any feelings, you that dug
With your own hand—how could you?—his little grave;
I saw you from that very window there,
Making the gravel leap and leap in air,
Leap up, like that, like that, and land so lightly 80
And roll back down the mound beside the hole.
I thought, Who is that man? I didn’t know you.
And I crept down the stairs and up the stairs
To look again, and still your spade kept lifting.
Then you came in. I heard your rumbling voice 85
Out in the kitchen, and I don’t know why,
But I went near to see with my own eyes.
You could sit there with the stains on your shoes
Of the fresh earth from your own baby’s grave
And talk about your everyday concerns. 90
You had stood the spade up against the wall
Outside there in the entry, for I saw it.”

“I shall laugh the worst laugh I ever laughed.
I’m cursed. God, if I don’t believe I’m cursed.”

“I can repeat the very words you were saying. 95
‘Three foggy mornings and one rainy day
Will rot the best birch fence a man can build.’
Think of it, talk like that at such a time!
What had how long it takes a birch to rot
To do with what was in the darkened parlour. 100
You couldn’t care! The nearest friends can go
With anyone to death, comes so far short
They might as well not try to go at all.
No, from the time when one is sick to death,
One is alone, and he dies more alone. 105
Friends make pretence of following to the grave,
But before one is in it, their minds are turned
And making the best of their way back to life
And living people, and things they understand.
But the world’s evil. I won’t have grief so 110
If I can change it. Oh, I won’t, I won’t!”

“There, you have said it all and you feel better.
You won’t go now. You’re crying. Close the door.
The heart’s gone out of it: why keep it up.
Amy! There’s someone coming down the road!” 115

“You—oh, you think the talk is all. I must go—
Somewhere out of this house. How can I make you——”

“If—you—do!” She was opening the door wider.
Where do you mean to go? First tell me that.
I’ll follow and bring you back by force. I will!—”

Law for (Modern) Life - Be Careful What You Wish For

MY LIVING WILL

Last night my wife and I were sitting in the den and I said to her,

'I never want to live in a vegetative state, dependent on some machine
and fluids from a bottle to keep me alive. That would be no quality of
life at all, If that ever happens, just pull the plug.'

So she got up, unplugged the computer, and threw out my wine.

:)

Elder Law - Mohegan Sun's HALF a Penny for Your Thoughts

A reverse mortgage to feed a slot machine? Can a car alarm reduce depression in elders? What can you buy for half a penny? I have just returned from an estate planning conference in Las Vegas.
This was a conference like many others where we were trapped in a windowless conference room for hours on end as speakers droned on about the latest innovations in avoiding estate taxation and applying new techniques to serve estate planning clients. Yawn. Boring. A far better lesson in estate planning and elder law was available just outside the conference room doors. Those of you that have been to Sin City know exactly what I am talking about; those that don't are better off. Las Vegas, and gambling halls generally, have become the churches of Godless and desperate people. The vast majority of those in casinos are not there to blow off a little steam or throw caution aside for a few hours of distraction. No, the people who are drawn to this Mecca of Neon and Nicotine come out of their own desperation. They come to be winners. The losers in modern American life - the sick, the unattractive, the decrepit, the old, the mentally ill - the losers come to have a chance, just for a little while, to be winners. They come for hope. Hope that the machine will tell them that they are jackpot winners by making noises and illuminating bright lights.

Casinos are ordinarily divided into two main sections, one for table games (blackjack, baccarat, roulette, and craps) and one for slot machines (the infamous "one arm bandits"). Walking around the casinos it quickly became apparent that those playing at the tables were mostly younger and middle aged men, mostly in small groups, making some serious calculations of their potential success. These were men who knew the odds and were consciously putting their money on the line strictly for a speculative financial return. Many of these men lead ordinary lives as lawyers, accountants, managers - people who take little risk in their "day" jobs, but vent their conservative natures from time to time by seeking Lady Luck. These are the same folks who drive Toyota Camry's during the week and Harley Davidson's on the weekend. Put in perspective, these gamblers understand the risks they are taking at the tables and are prepared to lose their grubstake as dues for the release that being a "player" brings to them. Seldom do these gamblers gamble their rent or food money.

Since there were two people who could communicate with each other, there was this type of gambling - "Hey Org, I'll bet you a rock that you get eaten by that saber tooth tiger first!" As an elder law lawyer, I am far more concerned with the other side of the casino. Like a vast sea of buzzing alarm clocks, beeping microwave ovens and unstoppable car alarms - the cacophony of the slot machine areas in casinos sounds like a virtuoso performance to those seeking to be winners. BAR - BAR - BAR. 7 - 7 - 7. With carpal - tunnel - inducing - repetition, the Nicotine induced masses monotonously search for the machines' positive feedback. Most of the people at the slot machines appear to be obsessed by the prospect that they could be winners - some of the machines even say "You're a Winner", never telling you that you are a loser.  Whether by illness, financial distress or merely addictive natures, many people are drawn to spending what remains of their lives and savings fixated on the hope of positive reinforcement from a machine. The real walk-out-the-door payouts are meager. Few walk out of the casino with a surplus - they let it ride, and when they do, they lose. Like the lonely elders who spend all their money on meaningless junk just so they can chat with their favorite Home Shopping Network or QVC operator, casinos provide a sense of community.

This reason is not a good one to keep building casinos. It would seem that the vast majority of the masses in the Las Vegas casinos are there to pass time in an atmosphere where there is a chance of rising from the crowd, where your car alarm goes off, your lights blink and everyone knows that you're a winner. I am concerned that far too many elders are in casinos with funds that they need for their own protection. In fact, I recently became aware of a reverse mortgage company that is promoting their services along side a major casino. Reverse mortgages have an important place in elder law planning. They are a financial tool to protect an elder's standard of living, dignity and sense of place in remaining in their own home. Reverse mortgages are not a remedy of last resort. Advertising reverse mortgages in a context of gambling is mercenary and solicitous of the very people who need sound financial planning and advice from a competent elder law lawyer. A casino in Connecticut that advertises heavily in the Boston market, Mohegan Sun, offers this new innovation: ************[from MoheganSun.com]**********"It's the latest trend in slot machines and only Mohegan Sun has it. The Northeast's premier entertainment destination installs 20 half-cent slot machines in its Casino of the Earth and Casino of the Sky. This makes Mohegan Sun the only destination in the United States to offer this new technology. This latest offering allows customers to wager half a cent instead of the traditional quarter, dollar or even penny it's just another way Mohegan Sun is revolutionizing the gaming industry.********** You read it right. HALF-cent machines.

 Boy, they sure are revolutionizing the gaming industry. And legislators say that casinos are not preying on the elderly? The poor? The uneducated? Apparently the government is so blinded by the voluntary tax dollars that pour into state coffers that they don't see the societal and financial evil brought on by the wholesale distribution of false hope and deus ex machina for sad lives. This government is the same one that cannot provide long term care without impoverishing its people, cannot offer even a remotely intelligible drug benefit for Medicare recipients and is afraid to impose meaningful taxes on the very rich. I imagine there are many casino owners in that category - they are easy to recognize, they are laughing and like a heroin dealer that never shoots up, you won't see them pulling the handle of that revolutionary ha'penny machine. We don't need more casinos. We don't need any casinos. I think we need some new ideas. As many know, I love inventions. My latest invention? The Jackpot Emulator (tm). I see this as a Medicare reimbursable device not unlike a prosthetic or a wheelchair. Like a slot machine in every way, but the JE does not require the payment of any money, nor does it pay out any money, but rather brightly colored slips of paper that exclaim - YOU'RE A WINNER!! For the cost of the machine and a little electricity we could set up Jackpot Emulator (tm) rooms in nursing homes and senior centers where elders could push buttons and hear whirring happy sounds to their hearts' content and then go home with the satisfaction of being a "winner" with no possible way of putting their personal financial security at risk. Now that is revolutionary.

Using Reverse Mortgages in Complex Estate Planning - What Elder Homeowners Need to Know

Reverse mortgages are not just for poor people anymore. I am tired of hearing about reverse mortgages - in the past six months it's as if someone flipped a switch to turn up the noise, not necessarily the quality, of the messaging to elders about reverse mortgages.  

In my practice as an estate planner in Massachusetts I am often called upon to "get creative" on behalf of clients. As one of only a few true legal experts in the reverse mortgage industry, my creativity often opens the discussion with clients about complex uses of reverse mortgages in estate planning.

 I have developed several methods to leverage the equity value of a client's house to enhance either the economic benefit or overall personal security of clients. To explain the concepts in shorthand, Gosselin Law claims a servicemark on the shorthand names of many of our approaches. Here are examples of somewhat magical things that can be done with reverse mortgages as an estate planning tool.

GOLDEN TRIANGLE(sm). The Golden Triangle demonstrates to elders looking to plan for long term care how to use the reverse mortgage as a tool for closing the five year gap provided under the new Medicaid laws. It is a triangle as there is an estate plan, a long term care plan and a reverse mortgage plan coming together to provide for both current and future long term care needs. Here's how it works:

Mary, a 77 year old widow in Boston, has lived in her own home for over 40 years. This is the house that sheltered her family, where her dear husband passed and where she intends to stay until the very end. Although Mary has a good pension from the Commonwealth of Massachusetts, Social Security and adequate short term savings,  Mary is concerned that if she needed long term medical care that she could not afford to remain in her home or pay for a nursing home. Mary also wants to provide as much for her family upon her death as possible; after all she and her husband both worked hard to be able to leave something for their three children.

Mary's good health and family history of longevity helps indicate that Mary will likely grow to be very old. Her home is valued at $450,000 in today's real estate market. Based on her age, current interest rates and the property's values, Mary's HECM line of credit will be about $280,000 at closing. Mary qualifies for long term care insurance, but she feels that the $5,000 annual premium, although vitally important to her ability to remain in her home, is too much to pay on her fixed income. As many elder law lawyer advised her to  transfer the house to avoid exposure to a Medicaid lien - but every technique available requires a 5 year waiting period before she would be elegible for Medicaid.  At 77, Mary could live 15, 20 years or even longer - so even with her fixed income and ongoing inflation, she will no longer be able to afford to stay in her home in the not so distant future.

By securing a HECM reverse mortgage line of credit or similar reverse mortgage product, Mary will enable herself to have access to both a current and ready pool of cash, but also an appreciating line of credit that will be available to her for the rest of her life. Using a $5,000 per year draw, Mary will be able to buy the "Cadillac" of long term care insurance (including extensive home care benefits and high benefit limits) which will also serve to exempt her house from Medicaid liens immediately, without waiting for five years. At the same time, Mary's estate planning will have time to season. After five years, Mary will have had the peace of mind in the form of long term care insurance, lifetime financial security, and in her ever increasing available HECM cash and a now permanent estate plan to carry out her wishes. A Golden Triangle, indeed.

An interesting variation on the reverse mortgage that could work well in the Golden Triangle is the "Retirement Mortgage" from Virgin Money. Essentially a child acts as the reverse mortgage lender, documents the transaction as a loan to ensure that he or she is repaid before any other siblings at the time of the elder's death. I am a big proponent of Virgin Money (full disclosure is that I am working with Virgin Money in developing new and exciting products for the US market), on the principle that families should be helping each other first before turning to often high cost products from the financial services community. 

SNOWBIRD(sm). In the Snowbird(sm) we show reverse mortgage companies how to prospect with sunbelt real estate agents to facilitate the purchase of properties with reverse mortgages, primary residences can be obtained with a reverse mortgage purchase money mortgage, and secondary residence by using a reverse mortgage leveraged primary residence in Massachusetts as collateral for the real estate purchase. Similarly, we show elder homeowners how to conserve cash by using reverse mortgages as purchase money mortgages. Here's an example:

Bob and Cathy, 70 and 68 respectively, haved lived in their lovely 4 bedroom home in Newton for over 30 years. Now retired, Bob and Cathy enjoy playing golf, sailing and visiting with their two children and their families (who both live in the Greater Boston area). As much as they enjoy the New England seasons, they enjoy spending the Winter and long weekends in Florida. They have made many new friends and enjoy the Florida lifestyle, especially in the Clearwater Beach area.

Financially, Bob and Cathy have not fared too well. Bob worked for Polaroid for over 30 years, but because of its collapse, his pension benefits and stock savings (all in Polaroid stock) are meager at best. Bob continues to work part time at The Country Club in Brookline, which also gets him some free time on the greens. Cathy never worked outside the home, but has been doing quite well organizing Ebay sales for her friends and neighbors looking to downsize their homes. The thought of doing this at this point in her life brings Cathy to tears, but she and Bob agree that they would enjoy having a place in Florida during their healthy retirement years.

Based on Bob and Cathy's ages, current interest rates and the $800,000 value of their Newton home, they could borrow approximately $425,000 in reverse mortgage cash. They could draw it all at the closing or take some in a lump sum and leave rest to be available for future withdrawals. Bob and Cathy would very much like to purchase a $200,000 condominium in Clearwater Beach condominiums, not far from their favorite public golf course.

By taking out a reverse mortgage as above, Bob and Cathy will have the best of all worlds. They will have the cash they need to buy the Florida condominium outright (and enjoy its appreciation throughout their retirement), a financial cushion in the form of the remaining credit line on their Newton home, and most importantly, will be able to keep and enjoy their home. Of course, interest will acrrue on their borrowings, but between the expected appreciation of the Florida property and the value they place on the two-home lifestyle, Bob and Cathy will have it all in retirement thanks to the Snowbird.

ROBINHOOD(sm). The Robinhood(sm) guides more sophisticated and larger property value elders on the use of asset leverage by using other financial products, especially second to die life insurance. In simple terms, the reverse mortgage is used to pay premiums and the actuarial analysis results in a positive arbitrage for the reverse mortgage borrower. Here's a simple example to ilustrate the idea:

Mike and Sheila enjoy financial security by anyone's measure. Mike, recently turned 65, and Sheila, 66, just sold their successful software company to a larger competitor - realizing over $10 million in restricted stock in the buyer from the sale. Adding that to their $2 million primary residence in Brookline, $3 million Nantucket home and $5 million in other savings, mainly in qualified retirement plans, Mike and Sheila will pass a large estate on to their five children. Or, will they only fill the coffers of the US Treasury? Based on a $20 million estate, Mike and Sheila's estate planning attorney showed them a potential estate tax of over $6 million if they were to die this year.

If we were their attorneys, we would suggest setting up an irrevocable life insurance trust (ILIT) to hold a survivorship (second to die) life insurance policy. As wealthy as they may seem, Mike and Sheila lack sufficient liquidity to commit to a relatively large insurance premium, although the arbitrage on the numbers clearly show the economic benefit of establishing such an estate plan while they are young and healthy. The solution? A reverse mortgage, either on a line of credit basis where premiums are paid annually or a lump sum cash account where Mike and Sheila can purchase their life insurance (through the ILIT) with a single premium.

By using the reverse mortgage to pay the life insurance premium, Mike and Sheila will get the liquidity they need without running afoul of income tax rules or using restricted or otherwise inaccessible assets to pay for the needed life insurance. Upon the second of Mike and Sheila's death, the overall estate will be liquidated and the reverse mortgage paid in full with part of the cash proceeds of the life insurance policy, the balance to be used for paying estate taxes or direct bequests to their family. Based on a sophisticated side-by-side analysis of their reverse mortgage projections and life insurance guarantees, Mike and Sheila can make an educated arbitrage decision without significant risk of economic loss.

We are not licensed to provide insurance or loan products and any decision to proceed with any of these advanced reverse mortgage plans requires you to work with your trusted advisors. But, Gosselin Law can help our clients evaluate various complex uses of insurance and mortgage tools, as well as suggest reliable sales organizations

Gosselin Law is one of the only elder law firms in the country with a reverse mortgage specialty practice. We can assist homeowners in the states where we are licensed or associated with local counsel with the planning of reverse mortgages, coordination of federal benefits with reverse mortgage loan proceeds and gerneral asset protection and estate planning.

Hold My Hand - Life & Death in New America

Middle class Americans are becoming more and more sheltered from those things that make us all human. Most everything is delivered in hermetically sealed packages, lest we be exposed to germs. Sports for children no longer have winners or losers - we wouldn't want to put such labels on our youngsters. And most notably, there is an alarming trend to shield our youth from those things that reveal our humanity. Despite the nightly news having an agenda of Lipitor sales and fear mongering, it shows us a reflection of ourselves. Crime, civil strife, natural disaster are all common themes. While I am not advocating that children need see the mayhem that is war or some of the more suggestive sexual topics that seem to show up at ratings time, I do believe that our children need to know and embrace those things that make us living beings. I mean death. Not Halloween-Freddy Krueger-Dracula-death, mind you, but death as a natural eventuality of life. Children in the inner cities know death all too well. It is a natural eventuality of living in a place of despair, poverty and civil unrest. At least weekly you see a report of gang violence or random bullets hitting some poor soul just trying to get by. These shootings are followed by the expected outpourings of grief, and in the crowd there are inevitably children witnessing the goings on.  In fact, in many other parts of the world, death is such a familiar sight that children are often an integral part of such funerary preparations as washing the body of a recently departed family member. These children know the measure of one life, its value and its fragility. Which brings me back to suburban America. Experts in child blabbochology tell us that children's delicate psyche cannot process the meaning of death. Bull hockey. From my many years working with families facing the crisis that is serious illness and the natural eventuality of death, children, like adults, need to witness the natural course of life. My fear is that without an understanding, or worse with a homogenization of death and its singular beauty, whole generations of our society will view elders and those with dread illnesses as unworthy of their attention. While I am not suggesting that you bring your young child to the next funeral announced in The Boston Globe obituary, I do suggest that you bring your child to visit an infirm elder or a children's ward in a long term care facility such as the Shriner's Burn Center. But when the time comes in your family or neighborhood for a funeral, bring your child. Hold her hand tightly. Tell her it is right to be a little sad. Explain that the decedent has died and that death is our body's natural end. If you have beliefs about what happens next, by all means pass those on then and there. If you have no belief in anything beyond that coffin - share that belief. My father told me a story that will stay with me forever. He lived in Boston in an apartment with his extended family of his parents, grandfather and two uncles. In the mid 1920's one of his uncles went to Vermont to work in the quarries that were hiring strong Irish backs at the time. Within three days he lay crushed under a two ton block of marble, a victim of corporate America's disregard for the lives of their workers. In any event, his body was brought back to Boston to the front parlor of my father's apartment. My then young father, at about 5 years old, sat with his dear uncle and rest of his family for the requisite two days. My father always spoke fondly of this first experience with death and the beauty and intimacy that it provided him. While I'm not advocating "Take a Child to a Funeral Month", I ask parents to re-consider leaving their children out of the ritual that the human world has wrought for honoring and dispatching our dead. Do it for no other reason to assure yourself attendance at your own funeral.

Clients First - A Mission Against File Numbers

My law firm handles a large number of mortgage closings, estate plans and probate administrations. Honestly, it is quite monotonous, dull work. We input information into the computer and the computer spits out all the magic documents. Then we do it again, and again, and again. As dull as it may be I make a point of instilling in my staff the mission of the law firm.

Our mission, simply, is Clients First. A necessary evil, sure, but we try hard to put a human side to each mortgage closing we push out the door. Each probate involves the death of a loved one, the tension of families revealing their greed to each other, the grieving that makes it ever so hard to hold that green certificate of death in your hands. We see each probate file as something that needs to be handled with great care and respect. Whenever I first meet with a family after a death, the first words from my lips after extending my sympathy is that we are here just to talk about the process and your feelings in divvying up your loved one's affairs. I'm often surprised just how many clients take me up on my free ear and shoulder.

I have been looking around for other monotonous jobs and tried to look a little deeper at what defines excellent service in the face of boredom. It all comes down to people, people make life interesting. My favorite librarian that keeps those books in perfect order is just waiting for a patron to ask her about a good book about Antarctic exploration. My accountant can discuss boats with me until the cows come home, even manages a smile when he tells me that I owe money (I swear the IRS gives him a commission), probably because he is thinking of buying another boat. The firefighters (whose jobs are 95% boredom and 5% adrenaline) I know enjoy sharing current events, recipes and get-rich-quick ideas. What do these boring jobs have in common? People. Good people caring about helping others, but focused on the people they serve. Otherwise they would be easily replaced by machines.

Reverse Mortgage - Primetime for Reverse Mortgages

Until very recently anyone with reasonable credit standing and some form of income could get a mortgage. Mortgage lenders competed to get the worst borrowers - I am not making this up. So-called "sub-prime" lenders are in the business of making high cost loans to borrowers with marginal track records for paying their debts. Why make such loans? Because they could exact high interest rates from these borrowers and then bundle up these obligations on the secondary market Wall Street-style for investors who not only invested directly in these mortgages, but also hedged (i.e. gambled on changes in the market) among other leveraging techniques to go for the big score on these loans. Sound familiar? Internet stocks anyone?

Look in your morning paper, whoomp! There goes another one. Daily these sub-prime lenders are disappearing into the files of the Bankruptcy Court.

The mainstream lenders that dabbled in these markets with products such as "alt-A" (alternative guidelines for people with good credit) and NINA (no income, no asset - also known as "liar's loans") are running for cover.

They are canceling whole product categories and consolidating lending divisions so they don't appear to Wall Street as having ever been in the Internet (oops), I mean sub-prime, business. Sub-prime loans are built on a house of cards, nothing more than pure speculation on the buoyancy of the real estate market and the hope that the historically worst borrowers will re-pay some of their mortgage debt. It's sort of like hoping that your pet crocodile won't eat your cat. Nature is nature.

There is a loan category that is showing real signs of stability and growth - reverse mortgages. Reverse mortgages are tied to actual equity, hard money lending if you will. They are insured by real insurance from the U.S. Government in the event the lenders can't meet their promises. Reverse mortgages are tied to actual human life expectancy - God is on their side.

It's not to say that we won't see abuses in the reverse mortgage arena as the slimy mortgage originators handling sub-prime loans slither to new products, but for the most part elders who understand the costs and challenges of the reverse mortgage will at least get what they bargained for without regard for the whims of Wall Street's unending thirst for new investment vehicles.

Gosselin Theory of Relativity

 

Practicing in the area of probate law in Massachusetts exposes me to so many good people. Well, most all of my clients and their families are good. It's their relatives that cause all the problems. Over several years of practice I have developed a set of baseline rules for dealing with people in probate cases; I like to call it the Gosselin Theory of Relativity. It boils down to this "friends for pleasure, strangers for business and relatives for no good reason at all." Let me share with you some true to life stories (with the names changed to protect the innocent).

Many years back I had written the estate plan (will and trust) of a then elderly woman of substantial means in the area North of Boston. "Mrs. Jones" had two children. "Elsa" was a loving daughter. She visited Mrs. Jones often and was her confidante and companion as Mrs. Jones' health declined. Elsa was more or less the model daughter. "Aurelius" was a greedy, lying, conniving germ of a man that was born to Mrs. Jones but took a wrong turn on the way out of the nursery. Mrs. Jones only saw him when he was on the lam or looking for a "loan." She never turned him away, but had a plan for him at her death. You see, her estate planning made provisions for Elsa, Elsa's children, even Aurelius' children - but it left nothing to Aurelius. Mrs. Jones, as is common, asked me to keep her papers for safekeeping, only telling Elsa and Aurelius that should something happen to her that they should contact me. Aurelius lived in a Mid-Atlantic state and drove through the night to reach my office at 8:30am.

He was waiting with his car idling for me to come in to work. "Are you Mrs. Jones' lawyer? She died yesterday. She was my mother. I want to know what I'm getting in the will." I knew this day was coming. My instructions were clear from Mrs. Jones that I was to give Aurelius any and all notices required under the probate law of Massachusetts, but nothing more. "You must be Aurelius," I said like any good lawyer who only asks questions fully knowing the answer before they are spoken. "I am so sorry to hear about your mother, she was a kind and thoughtful woman. Your mother's property was held entirely in a trust, her will is of no consequence, the trust is a private document and if there is any reason to contact you in the due course of its administration I will contact you, won't you confirm your address?" I succinctly responded.

After a variety of profanity, Aurelius stomped away. Wouldn't you know that when I called Elsa to inform her that I had met Aurelius her response to me was "Mr. Gosselin, why are you sorry about mother? She is right here with me." I'll be coming back to the theme of greed over the coming weeks, it is an unfortunate necessity of being a probate lawyer. [Housekeeping: I just want to let all of you know that this blogging thing is more time consuming than I ever imagined. So, please excuse short posts or gaps of time, it's my goal to produce a new blog every 3 days or less. Also, my webmaster tells me to make sure I use "magic" words in my blog, like probate, real estate, lawyer, elder law, Massachusetts, Boston, etc.", but I promise to use these terms in their proper context and from time to time to create blogs with no words like probate, elder law, Medicaid, estate planning, Massachusetts, real estate. :)]

 

Lipitor Side Effects, Interactions and Information - Surprise Risks to Good Health

Lipitor, among other statin drugs, has a number of side effects and interactions that can cause various problems in an otherwise healthy person. Valium, Morphine, Coumidin, Avandia, Prilosec, Viagra, Cialis and many other drugs also have their own side effects.


As an elder law attorney, I have no idea what the medical side effects may be, but I do know that the pharmaceutical industry is advertising some very risky behavior. I know because I watch the evening news. Well, the evening news is really just filler for the drug commercials. They declare all sorts of side effects from taking their medication. Everyone knows that strong drugs have strong side effects, no surprise there. "May cause shortness of breath, muscle strain and death. Notify your physician if you experience any of these symptoms." Not sure how "death" is a symptom, seems more like the end of the road to me, but heck, maybe they have a pill to sell you for that too.

 My ten year old son watches the news with me from time to time (with a certain amount of parental control). Last night he saw a Lipitor commercial with me and saw several grown men riding rapids, climbing rocks, fishing in the open ocean and riding bikes down a mountain. His comment was that these "healthy" commercial people were engaged in activities that were obviously more dangerous than taking a cholesterol pill - although there were no warnings for hurling yourself off a cliff on a Schwinn Ten speed at age 60. Not to mention spending an evening in some of the erectile dysfunction commercials where "erections may last longer than four hours." If that doesn't kill you, I don't know what will.

 It is a national embarrassment that the pharmaceutical industry is more focused on branding and consumer mind share than on making important drugs available to the public affordably. All too often I hear of my elder law clients splitting pills in half to make them last longer or skipping meals to save money for medications. It's a disgrace. Until and unless the US Government takes a more active role in the development and regulation of new drugs and their distribution, the perky- pill salespeople will prowl doctors' offices trolling for prescriptions.

 A good place to start would be keeping prescription data private. Why should Pfizer or Merck know which pills a doctor prescribes? Doctors should have no incentive to be frequent prescribers of given medications - it's as if there's a frequent flyer program for doctors who push pills.

 Our law office used to be next to a large medical practice that entertains at least a half dozen well-dressed, attractive, sandwich platter carrying pharmaceutical representatives from Big Pharma each and everyday. Between the free drug samples, endless pastries and sandwiches, and the little gifts, it's no wonder why doctors have the incentive to prescribe whatever these co-eds are selling. No one brings lawyers anything for free. Yes, I'm jealous. No one is bribing me to use one brand of yellow pad or file folder over another. We just pick the one that is most affordable and appropriate for the client's case - why can't doctors and Big Pharma play by the same rules? And the public thinks lawyers are out for themselves? Pass the Lipitor.