Boston Estate Planning and Probate Lawyer & Attorney : Gosselin & Associates Law Firm : Serving Boston, Winchester, Hingham, Wellesley, Manchester

I admire Roto Rooter. Few other businesses are so financially successful using a single tool - such as the spiraling drain cleaning tool. As an elder law and Medicaid attorney in Massachusetts I am starting to feel like Roto Rooter. New Medicaid regulations and qualifications have made it nearly impossible at the time of nursing home admission to protect an elder's assets. Despite the strict guidelines and pre-planning requirements of the Deficit Reduction Act and interim state and federal regulation, we are still winning the battle of family asset protection.

 Of course, our one tool in Massachusetts is the Medicaid Qualifying Immediate Annuity, also called Single Premium Immediate Annuity (or SPIA). These annuities are quite simple, the Medicaid applicant or their community spouse contributes a lump of funds to an annuity account with an insurance company and the insurance company returns the money to the annuitant over a fixed period of time consistent with their life expectancy under the HCFA life expectancy tables. When the annuitant dies then either the family or the Commonwealth of Massachusetts Division of Medical Assistance gets the remaining funds depending on very specific rules.

 But there are several other options for elders and their families facing long term care financing and Medicaid qualification. There is an exception for the principal residence where the nursing home resident's spouse is still living in the home. This exception also applies to siblings, minor, blind or disabled children. The other major exception is for children who are caregivers for their parents (the "caregiver exemption") in the two years prior to the elder's nursing home admission.

 From an estate planning perspective and for non-real estate assets, our choices are more limited. Besides the Medicaid Annuity, Special Needs Trusts can also be used without disqualification for anyone in the Medicaid applicant's family. Disqualification for Medicaid is the term used by the Massachusetts Division of Medical Assistance (MassHealth) to describe the time period for which a Medicaid applicant or nursing home patient is ineligible for Medicaid benefits.

 Of course, advance estate planning can solve a lot of these Medicaid qualification issues. Generally, if an elder client is in good health,  under 80 years of age and has the wherewithal to pay annual premiums, then Long Term Care Insurance is a great option. Premiums can be costly on a cash basis, but I have never had an elder law client who had has a claim with her Long Term Care Insurance company complain about the benefits. The benefits are generally cash payments for home care and nursing home care. Many people call Long Term Care Insurance "nursing home insurance," but it is really much more than that as it also includes a home- care benefit.

 With the same foresight as an insurance applicant, elder law clients at Gosselin Law are often advised when they are healthy (or as I like to say "when you are still buying green bananas") to set up irrevocable trusts that preserve the step-up in tax basis and remove the elder law client's assets from inclusion in their resource calculation by MassHealth. The "trick" is that after setting up and funding these types of Medicaid trusts, the elder is not elegible for Medicaid for five years. At one time the waiting period was much shorter on transfers and trusts, but now, it is a uniform five years before the trust's Medicaid "protections" kick in.

That's about it for asset protection and Medicaid qualification. Whatever you do, do not apply for Medicaid without speaking with an elder law attorney, no matter how much the nursing home pushes you to sign papers or an application company, such as Medi-Services encourages you to 'just get it done' - keep your pen in your pocket until you speak with an elder law attorney. If you are facing the spectre of paying the outrageous costs of a Massachusetts nursing home from your own funds, please call Gosselin Law for a free telephone consultation to review your Medicaid asset protection options. Our phone number is (toll free) 877-325-6746 or 781-729-0313. We have offices throughout Massachusetts (Boston, Hingham, Wellesley, Winchester and serve Amherst, New Bedford, Barnstable and Pittsfield through satellite and in-home appointments.

 

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Getting to Sure: Legal Capacity and the Elder Lawyer in the Context of Reverse Mortgage Transactions

Introduction: Legal Capacity and the Elderly

 In general, the law presumes that all adults have legal capacity unless proven otherwise. The legal standard of proof is “clear and convincing” which means, in essence, that the law sets the bar pretty high for those wanting to prove that someone is incapable of being a legal person and, therefore, unable to be a client or enter into contractual arrangements. That being said, legal capacity is situational, as is the required degree of mental capacity, both depend on the proposed act. For example, a relatively low level of capacity is required for someone to create a valid will (individuals making a will only need to show that they understand that the document they are creating is a will), while a higher level of capacity is needed for providing informed consent to medical care. The degree of legal capacity necessary to establish a lawyer-client relationship lies somewhere between the capacity of a will-maker and that needed to give informed consent to medical care. In order for prospective clients to ethically be considered legal clients, lawyers must be able to establish that the clients have sufficient legal capacity to both become the lawyer’s client, as well as having the legal capacity to take whatever legal action the client purports to do.

Medical Tests and Legal Ethics: What’s the Standard Measure of Capacity?

When dealing with elderly clients, the law’s general presumption of the client’s capacity may be inaccurate in many situations involving elderly clients. When family members (e.g. adult children), brings an aged person to an elder law attorney, in some instances they may be doing so because of some observed events or behaviors that suggest to them that the person’s mental faculties are declining. Such non-clinical observations while not determinative, they do raise the question of whether the person in question has the legal capacity. How then does an elder law attorney determine a prospective client’s legal capacity? 

According to Veda Johnson, who has been a geriatric nurse for ten years working in nursing homes and hospitals in Orlando, Florida, where the elderly population has been growing rapidly for the last ten to fifteen years, assessing the mental acuity of an elderly patient is not simple. There are several kinds of tools in the form of scales or assessments, like the Glasgow Coma Scale for example, that are used to evaluate how “alert and oriented” an elderly person might be. Unlike nurses, lawyers seeking to determine whether elderly clients have sufficient legal capacity do not have any professional tools available to them. There is no standardized procedure or even a universally accepted legal definition. And in both the medical arena and the legal field determining if a person is losing her mental faculties is never a yes-or-no question. 

Each lawyer must make an independent, holistic determination on a case-by-case basis, each time weighing all the facts and circumstances.   Some attorneys rely on their personal observation of the older person plus comments from those who spend time with the older individual. But, determining if one has legal capacity is not the same as rationally determining what makes sense to the according to attorneys’ predilections. So attorneys must be aware of keeping their own prejudices at bay when making a determination. While bizarre or inexplicable behavior can be interpreted as evidence of diminished capacity, eccentricity is not the same as incapacity. But, as one might imagine, the dividing line can be exceedingly difficult to draw. 

The Model Rules governing lawyers’ ethics nationwide are primarily aspirational, but should at least guide lawyers’ decisions about where the line falls. States may also have ethic rules on what constitutes legal capacity in the context of representing elderly clients. In Massachusetts, for example, Rule 1.14 of the Massachusetts Rules of Professional Conduct lays out what lawyers must do if they suspect that a prospective client lacks legal capacity. The rule does not specifically speak to elder attorneys; however, Comment 1 to the rule states in part, “it is recognized that some persons of advanced age can be quite capable of handling routine financial matters while needing special legal protection concerning major transactions.” Entering into a reverse mortgage transaction is more complex than contracting for other secured loans (like home equity loans, for example) so a reverse mortgage can be considered a “major transaction.” There will be times when a lawyer will conclude that a client seeking to obtain legal representation in procuring a reverse mortgage loan lacks legal capacity, but has legal capacity for other contractual matters. If this is the case, there are a few options for lawyers that allow them to represent an elderly client.

Powers of Attorney

One option is obtaining a power of attorney. There are three kinds of power of attorneys. There is the non-durable power of attorney which terminates when the person who created it becomes legally incapacitated. A durable power of attorney, on the other hand, continues to be valid even after the principal becomes incapacitated. The third kind of a power of attorney is the springing power of attorney which becomes effective only upon the happening of an event that has been designated in the terms of the document. All powers of attorney terminate automatically upon death.

It is better for seniors to create power of attorneys when they are legally competent and in good health. But, if there are already health problems, early signs of dementia or Alzheimer’s disease, one should be created immediately. By creating a durable power of attorney for finances, with gifting authority, for example, seniors can appoint someone else to handle their personal finances, including the authority to transfer your assets even after they become incapacitated.

Guardianships

Guardianships are a more formal option than powers of attorney. They involve going through a legal process in the probate courts. There are generally three types of guardianships. First, guardianship of the estate, or as it is also known, conservatorship, which is limited to substitute decision making for matters concerning the incapacitated person’s property (assets). Second, guardianship over the person, which gives the guardian control over decisions affecting the “person’s person”, such as: where to live or whether to consent to medical treatment. Third, plenary guardianship, which grants guardians the power to make decisions over both the person’s property and person. Within the context of these three forms of guardianships, most state statutes permit probate courts to appoint limited guardians; which means, as the name implies, that such guardians have no more power than is necessary to meet the needs of the persons over whom they are appointed.

Joint Ownership Arrangements

Powers of attorney and guardianships are not the only ways of making sure that an older person will have a mechanism in place for taking care of financial affairs when that person is no longer able to do so. Joint ownership arrangements can also be used. The specific forms include joint tenancy, tenancy in common and, for married couples, tenancy by the entirety. The types of joint ownership arrangements have many characteristics in common. One such feature is what happens when one joint owner dies - the other owner automatically assumes ownership and control of what was owned in common. Creating a joint tenancy can be quite simple. Adding a new signature on a bank account or changing a deed on real estate may be sufficient; no special forms are needed. But, creating a joint tenancy can have complex financial, tax and legal consequences, thus, it is probably advisable to consult a lawyer or financial professional for advice before creating one. 

Revocable Trusts

Another alternative to guardianship is creating a revocable trust to hold the older person’s (a.k.a. settlor’s or grantor’s or trustor’s) assets. The trustee of the trust might be a close friend or relative or perhaps a bank’s trust department or some other financial institution. The trust may be structured with the settlor as the sole trustee or in conjunction with another trustee who will take over completely if the settlor is no longer willing or able to handle financial matters. By definition, a revocable trust can be modified as long as the settlor is legally capable of making that decision. If the settlor becomes legally incapacitated, and there’s no alternate settlor, then the trust becomes irrevocable and only terminates upon the settlor’s death.

Reverse Mortgage Transactions and Legal Capacity

Like lawyers, lenders serving seniors 62 or older who do not have the legal capacity to enter into a reverse mortgage transaction can do so with the person or entity appointed in a durable power of attorney or with a court order guardian. Under the federal home mortgage program, HECM and HUD, guardians and attorneys-in-fact or agents named in durable powers of attorney (together referred to as legal representatives) may execute the legal documents incident to a reverse mortgage transaction, provided that they have the authority to do so by court order or per the terms of the power of attorney contract. Part of any reverse mortgage transaction also involves counseling. The law requires that seniors receive counseling before they obtain a loan. Legal representatives can and must request counseling. Whether counseling sessions are between, counselors and legal representatives or counselors and seniors directly, the reverse mortgage counseling code of ethics requires that all counseling sessions, by HUD-approved HECM counseling agencies be confidential in any event.

Reverse mortgages depend on borrower eligibility and living arrangement so it may be harder for a trust or joint owner of a property to become a borrower in a reverse mortgage loan. The trust, for example, would have to be structured in a way that left the 62-year-old prospective borrower/settlor as owner of the property to be mortgaged and the home must also be the settlor’s primary residence. As far as joint ownership, both owners would have to be reverse mortgage eligible. Thus, using revocable trusts or joint ownership as mechanisms to protect seniors at risk of losing legal capacity has some drawbacks. An elder lawyer and financial professional can help seniors and their families decide what options are best for them.

Getting to Sure in an Unsure World: A Charge for Elder Lawyers

Representing elderly clients involve many unique issues for legal and financial professionals. Assessing legal capacity is one of those issues. Many elder attorneys have developed intake forms that include questions which are useful in assessing the legal capacity of prospective clients (as well as run-of-the-mill questions about finances and ownership.) Asking what seems like simple questions like “What day is it today?” as well as questions about medications can be good when trying to decide: (a) does this person have the required legal capacity become a client; and (b) can this person enter into a major transaction like a reverse mortgage? At the end of the day the answers provided may merely help lawyers become more sure (or less certain) about the prospective client’s legal capacity, but at least lawyers would be doing their part in “getting to sure” about that client’s mental capacity as a legal matter.

Gosselin Law provides comprehensive elder law, estate planning and reverse mortgage services.  These services include Medicaid applications; emergency elder law matters; real estate transactions; guardianship; estate tax matters; wills; trusts; Medicaid annuities; Annuity planning for Medicaid; Medicaid trusts; special needs planning and related areas.  Gosselin Law can be reached at 781-729-0313 or toll free 877-325-6746.  Serving Massachusetts and New Hampshire.

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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.

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I admire Roto Rooter. Few other businesses are so financially successful using a single tool - such as the spiraling drain cleaning tool. As an elder law and Medicaid attorney in Massachusetts I am starting to feel like Roto Rooter. New Medicaid regulations and qualifications have made it nearly impossible at the time of nursing home admission to protect an elder's assets. Despite the strict guidelines and pre-planning requirements of the Deficit Reduction Act and interim state and federal regulation, we are still winning the battle of family asset protection. If you are facing the spectre of paying the outrageous costs of a Massachusetts nursing home from your own funds please call Law for Life for a free telephone consultation to review your Medicaid asset protection options. Our phone number is (toll free) 877-325-6746 or 781-782-6000. We have offices throughout Massachusetts (Boston, Hingham, Wellesley, Winchester and serve the Worcester, Springfield, New Bedford/Fall River, Barnstable and Pittsfield areas through satellite and in-home appointments.

Often our only tool in Massachusetts is the Medicaid Qualifying Immediate Annuity, also called Single Premium Immediate Annuity (or SPIA). Although pooled income trusts have their place, we are not convinced that they will be available much longer as an emergency planning tool. These annuities are quite simple, the Medicaid applicant or their community spouse contributes a lump of funds to an annuity account with an insurance company and the insurance company returns the money to the annuitant over a fixed period of time consistent with their life expectancy under the HCFA life expectancy tables. When the annuitant dies then either the family or the Commonwealth of Massachusetts Division of Medical Assistance gets the funds depending very specific rules.

But there are several other options for elders and their families facing long term care financing and Medicaid qualification. There are exception for the principal residence where the nursing home resident's spouse is still living in the home. Same with siblings, minor, blind or disabled children. The other major exception is for children who are caregivers for their parents (the "caregiver exemption") in the two years prior to the elder's nursing home admission.

From an estate planning perspective and for non-real estate assets, our choices are more limited. There is the Medicaid Annuity (for which Law for Life is recognized as a Massachusetts source for the design and implementation of annuity based plans), but also the use of Special Needs Trusts that can be establish without disqualification for anyone in the Medicaid applicant's family. Disqualification for Medicaid is the term used by the Massachusetts Division of Medical Assistance (MassHealth) to describe the time period for which a Medicaid applicant or nursing home patient is ineligible for Medicaid benefits.

Of course, advance estate planning can solve a lot of these Medicaid qualification issues. If an elder client has good health, is generally under 80 years of age and has the wherewithal to pay annual premiums then Long Term Care Insurance is a great option. Premiums can be costly on a cash basis, but I have never had an elder law client that went on claim with Long Term Care Insurance complain about the benefits. The benefits are generally cash payments for home care and nursing home care. Many people call Long Term Care Insurance "nursing home insurance", but it is really much more than that as it includes a home care benefit that can be even more important to elders in need of services.

With the same foresight as an insurance applicant, elder law clients at Law for Life are often advised when they are healthy (I like to say "when you are still buying green bananas") to set up irrevocable trusts that preserve the step-up in tax basis and remove the elder law client's assets from inclusion in their resource calculation by MassHealth. The "trick" is that after setting up and funding these types of Medicaid trusts, the elder cannot qualify (or apply) for Medicaid for five years. At one time the waiting period was much shorter on transfers and trusts, but now it is a uniform five years before the trust's Medicaid protections kick in.

That's about it for asset protection and Medicaid qualification. It is imperative to speak with a competent elder law attorney such as us experts at Law for Life (our phone number is 781-782-6000 or toll free at 877-325-6746) regarding your personal situation as the regulations are very complex and change often during the year. Whatever you do, do not apply for Medicaid without speaking with an elder law attorney, no matter how much the nursing home pushes you to sign papers or an application company, such as Medi-Services encourages you to 'just get it done' - keep your pen in your pocket until you speak with an elder law attorney.

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Law for Life is officially the new street name of Gosselin & Associates, P.C. and Gosselin Law, our brand, if you like. Our completely renovated website at www.lawforlife.com has been carefully planned to be the easest and most thorough site on elder law matters in cyberspace. Please let me know how you enjoy the new site!

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Gosselin Law's short sale group can be reached at 781-782-6000 or toll free at 877-325-6746. Gosselin Law has convenient office locations in Boston and throughout Massachusetts.

What is a Short Sale:

• When a lender accepts a discount on a mortgage to avoid a foreclosure or bankruptcy.

Why a Lender Would Take a Discount:

• They do not like excess inventory or bad loans on their books;
• Loss mitigators have incentive to clear up defaulted loans - short sales help do that; and
• Lenders know they can lose more money if a home goes to auction.

Lender "Short Sale" Factors:

• Whether the seller deserves a break due to: financial hardship caused by unforeseen circumstances (layoffs, divorce, illness, etc.);
• Whether it would be cheaper to repossess the home, fix and sell;
• How many other properties the lender has in default; and
• If co-signers are on the loan and can help pay the mortgage balance.

The Short Sale Process:

• Acquire a professional (such as a real estate attorney) with short sale experience.
• Contact the lenders 'loss mitigation department' to discuss the possibility of a short sale and determine the lenders process for completing the sale. This sometimes involves acquiring a 'Short Sale' or 'workout' packet.
• Seller must issue a signed 'Release' or 'Authorization to Release Information' to authorize the release of personal information about the loan and the property for the buyer or escrow agency.
• Lender will review the settlement statement indicating: sale price, loan balance, expenses, commissions and fees associated with closing the sale.
• Seller must complete a 'hardship letter' explaining the reason for wanting a short sale. The letter should include all information regarding the financial circumstances of the seller along with bank statements, investment account information, pay stubs and other necessary financial information.
• The lender will connect with the broker to provide a price opinion based on the condition of the home, market value, maintenance costs, etc.
• The lender reviews the purchase agreement and real estate commissions and weighs them against the cost of repossessing the home to sell or auction.
• If the lender finds the situation works in their favor, the short sale will proceed with the terms negotiated in the purchase and sale agreement.

Short Sale Mistakes to Avoid:

• Don't low-ball your offer. Lenders are trying to minimize loss and have a good sense of property values so make your offer as tempting as you can while staying inside your profit guidelines.
• Have a knowledgeable short sales professional on your side. Lenders are busy and do not have time to explain the process so make sure you know what you are doing, or find someone (like a real estate attorney or a broker with short sale experience) who does.
• Don't assume each lenders short sale process is the same. Each lender has different documents, requirements and regulations so don't foul up by making assumptions.
• The fewer loans on the property - the smoother the short sale process. Avoid complicating an already complex process by having a good handle on what's owed on the home.

Why Short Sale Knowledge is Important for Brokers and Real Estate Agents

• You can recognize  the opportunity to sell a home and receive commission on a home that would otherwise be repossessed by the lender or auctioned.
• To develop a favorable reputation among potential buyers (who stand to purchase a discounted home with a short sale) and among sellers (who will no longer go into foreclosure or declare bankruptcy) let the experienced short sale lawyers at Gosselin Law guide you through the MA short sale procedure. Very often the legal fees are negotiated with your lender as part of the short sale procedure. Gosselin Law's short sale group can be reached at 781-782-6000 or toll free at 877-325-6746. Gosselin Law has convenient office locations in Boston and throughout Massachusetts.
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One of the most misunderstood words in the legal profession is trust. I am talking about a trust, the legal document. Many people can describe to me what a trust does ("it avoids taxes", "it keeps things secret", "it allows me to tell my son what to do with my money", "it manages my money", etc.) Few people actually see the essence of what a trust is, and what it is not.

Black's Law Dictionary defines a trust as "a right of property, real or personal, held by one party for the benefit of another." Or, "an obligation arising out of a confidence reposed in the trustee or representative, who has the legal title to property conveyed to him, that he will faithfully apply the property according to the confidence reposed, or, in other words, according to the wishes of the grantor of the trust." Well, that's a lot of help. I like to think of trusts as nothing more than "instructions". The person making the trust instructs the trustee to do something for the benefit of another person (the beneficiary). Try the exercise of replacing the word 'trust' with the word 'instructions' and I think you'll see how simple it can translate legal jargon. Trusts are really the modern equivalent of wills a generation ago. They are affordable, flexible, can avoid probate, reduce will contests and protect your family from a myriad of legal problems. Some types of trusts can even help you qualify for Medicaid as part of a comprehensive Massachusetts elder law plan.

Although trusts come in many different flavors and styles, the core element is protection of assets and ease of management. Some countries, most notably France, have no legal identity for trusts. Even the term 'trust' can't be easily translated into French, because there is no legal equivalent. As a result it can be very difficult for trusts to acquire property in France or otherwise conduct business as they are not recognized as separate legal entities. Although the concept of a trust may exist in other countries as a practical matter trusts are only used by the super rich and powerful. During the middle of the 20th century, as U.S. banks and trust companies became more competitive to offer services to a burgeoning (upper) middle class that came about after World War II, trusts became more available. In sum, a good written set of instructions left in the hands of a good person is your best defense against an unwanted outcome upon your incapacity or death. Trusts fit the bill. Let one of Law for Life's experienced trust and estate planning attorneys help you with your personal trust planning. Call them at Gosselin Law at 781-729-0313.

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The son of philanthropist Brooke Astor was accused in an indictment unsealed Tuesday of plundering his mother's $198 million estate and conspiring to have the Alzheimer's-stricken socialite sign a new will leaving her fortune to him.

I guess this shows us that the rich are just like everyone else. Greed is no more a condition of poverty than hunger is a condition of obesity. Humans with a nature to cause harm to their families for their own profit come in all shapes and sizes. Brooke Astor is no more immune to her family's greed than any other elderly woman suffering from the ravages of dementia. Probate, estate taxes and trust issues for the rich are the same as for everyone else - just magnified by the scale of wealth.

A big part of our estate planning process is developing strategies to prevent abuse of the elderly. Using co-fiduciaries, professional trust services and checks and balances built into our documents, we are able to give our clients strong lines of defense. Brooke Astor may have had access to the best lawyers in the United States because of her wealth, but without an understanding of elder law and the dangers of elder abuse, even the best lawyer in Boston cannot imagine the opportunity for fraud within a parent-child relationship. Our experience tells us that the "big firm" lawyers are ill equipped to deal with what is often more social work than legal work.

Our practice is to approach mental health issues in our elderly clients as a multi-disciplinary issue. Working closely with medical providers, financial planners and social workers we craft bespoke plans that respect each individual client's unique personal situation. House, hospital or nursing home calls are commonplace in what we do, how else could we know how our clients live? Ask your downtown Boston lawyer to visit the nursing home on a Saturday morning.

In her day Brooke Astor, was a great philanthropist. In a great twist she will continue to be philanthropic through her own son's misdeeds by giving America an example of greed to the umpteenth degree. For elder law lawyers, Santa Claus could not have brought a more perfect Christmas present for elder parents than the example of the consequences of poor planning. Do your grandparents, parents and self a favor and give the affordable Christmas gift of good estate planning. And, yes, I would be happy to sell you a gift certificate for estate planning!

 

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An ancient Greek proverb teaches us that "a society grows great when old men plant trees whose shade they know they shall never sit in." Our great society did plant trees for our generation - in the form of literature.

 In our throwaway world and particularly in the modern lunacy that is the electoral process, the concept of societal measurement has become passe. Barack Obama zings Hillary Clinton, Hillary Clinton zings Barack Obama all while John Edwards practically needs to stand on his head to get his (often eloquent) messages across to anyone who will listen. On the other side of the aisle it's unclear who's on first, Mitt Romney with his perfect hair and corporate persona (see elsewhere in this blog about my real life civil (aviation) union with Mitt Romney), John McCain's surly yet rehearsed defense of America, Mike Huckabee's Bible thumping, Guiliani's been there/done that celebrity and don't forget Ron Paul, ok, forget Ron Paul.

 The message we hear is that there are petty disputes among the candidates, hair splitting issues dividing most of each party's candidates and an over reliance on the decision making capacity of a handful of people who have nothing better to do than to sit in coffee shops all day. These men and a woman are willing to sacrifice themselves for the greater good of the Amercian People, but in order to be heard or to rise above the din of the media, they must make mockerys of themselves and the process.      

Wouldn't it be nice to hear not only about change (and boy, do we need a change at the White House), but also about the leadership that everyday Americans can follow and be encouraged by? I think that presidential candidates should be given a required reading list, including (feel free to add to my list):

 Profiles in Courage or any anthology of John F. Kennedy's speeches. He and his handlers understood the challenges faced by the American people better than anyone of their day. They knew that America had lost its 50's naivete and needed to become more introspective. Introspection was the enemy of the anarchists of the day, what a wonderful world we would have if JFK, Martin Luther King, Jr., Robert Kennedy and the 58,209 dead young men and women in Vietnam had never left our shores.

All Quiet On The Western Front by Erich Maria Remarque. To see war this closely and then bring America into an interminable war would be incongruous. This short book speaks volumes about the tragedy and generational wasting that war brings without the glimmer of redemption. What's notable is that this book was originally written and distributed in Germany during the 1920's, but Adolph Hitler's messages of hate all but drowned out its message of redemption and hope from misery. Good thing the Nazis didn't burn every copy. There is a classic film by Lewis Milestone in 1930 that was the most graphically violent movie ever made up until that time, a later 1979 adaption with "John Boy" as our hero homogenized the story for modern viewers. Rumor has it that it is being remade again next year. The message never wavers - war is Hell.

 Sacco & Vanzetti (New England Remembers), by my neighbor, Eli Bortman. American leaders need to know the story of these two men. Their story tells the dangers of public opinion in the courtroom. The trial and the many years of appeals sound more like something from tabloid television than anything on tabloid television. The tragedy here is that we keep repeating ourselves. Injustice is no stranger to our modern world. A little awareness might help here too.

 The Ten Trusts: What We Must Do to Care for The Animals We Love by Jane Goodall. It's more than a pop piece about pet care, more telling about the special relationship that living things share on our planet. The White House should include a cat and a dog, maybe even a horse. I believe that not only does caring for animals calm the soul, but it reminds us that we are stewards of the Earth. Jane Goodall committed her life to learning more about the animal kingdom. There are lessons in her work for the leader of the free world. An afternoon with Michael Vick in the Georgia State Penitentiary might be instructional as well,  not only animal husbandry, but also in wasted opportunity by our youth.

 Tuesdays With Morrie by Mitch Albom. Knowing more about aging and death can only be a good thing as the aging Baby Boomers test the limits of the US Governments services such as Medicaid and Social Security.

Uncle Tom's Cabin Or, Life Among the Lowly by Harriet Beacher Stowe. As much as any book on the subject of slavery, this one emblazons the message that America has come a long way and has a long way to go in the area of multicultural relations.

The Kama Sutra. Seriously. America needs a President who loves and is personally comfortable and satisfied with their own life. History has taught us of so many misanthropic rulers who take their own personal dissatisfaction out in their decisions. Personally, I want a sexually satisfied President.

 An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith. If your presidential candidate can't tell you what this book says, even in a few words, do not vote for that candidate. This book forms the basis for modern economics, it might be almost 300 years old, but the basic tenet that economics is as much art as it is science leaps from the pages.

 I think I just made the syllabus for Professor Gosselin's new course "So You Want to Be President of the United States?" I can think of dozens more books, poems and speeches worth reading, but I'm realistic that our current crop of candidates only have so much time to read between cornball "town meetings" and talking to a fixture at a coffee shop in Nowheresville.

 

 

 

Save us Michael Bloomberg.

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