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Tuesday, March 15, 2016

A Reverse Mortgage is a powerful Estate Planning Tool

         Reverse Mortgages are a great Estate Planning tool that should be considered by everyone - even very wealth folks.  Having seen the typical needs and issues faced by my clients in typically lengthy retirements I can assure you that few tools are as efficient as a Reverse Mortgage.  Why efficient?  Because Reverse Mortgages allow seniors to minimize their monthly expenses, without selling anything or causing a taxable event.  In an era of persistent market volatility it can be very damaging to a portfolio to make consistent large withdrawals, and if you are withdrawing more than your RMD's from an IRA you are incurring unnecessary taxes.

          Based on the rapidly extending lifespans we are all seeing, I have a feeling that Reverse Mortgages will turn out to be a very good deal for many seniors.  There may be no equity left in your home when you pass away, but the Reverse Mortgage may have allowed you to give your children something more valuable such as a an inherited IRA balance.  Why would an inherited IRA be more valuable than giving the family home?  Because due to the tax implications your children will likely feel obligated to "roll over" their inheritance into their own IRA and this will give them a stream of incoming for the rest of their lives.




The Tonkovich Law Firm assists clients with Estate Planning, Wills, Trusts, Durable Powers of Attorney, Conservatorship and Contested Probate Procedures and Business and Real Estate Litigation in Irvine, CA as well as El Toro, Aliso Viejo, Lake Forest, Laguna Hills, Tustin, Newport Beach, Santa Ana, Newport Coast, Ladera Ranch, Foothill Ranch, Mission Viejo, Laguna Woods, Corona Del Mar, Silverado, Orange, Laguna Beach, Rancho Santa Margarita amd Fountain Valley in Orange County.



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