Estate planning is the most important step you can take to protect your assets and ensure that your money will be used as you desire. Estate planning 
includes having a will, setting up a durable power of attorney, and a living will. Without these plans in place, your family could be left with the burden of making financial and medical decisions on your behalf without guidance, should you become incapacitated.
Even those who understand the importance of estate planning, though, often feel overwhelmed, both emotionally and financially. There are low-cost options when it comes to estate planning. One of the most popular is the Reverse Mortgage.
Reverse Mortgage: For many people, their chief asset is their home; however, older people have a lot of equity in their home. If this describes you, you may want to consider a reverse mortgage. These are available through public and private programs for people who are 62 and older. A reverse mortgage can supplement your retirement savings, or it can cover unexpected medical costs, all while allowing you to remain in your home.
A reverse mortgage works by allowing homeowners to turn the equity in their homes into cash without the burden of monthly loan payments. A reverse mortgage must typically be the primary debt against a house. Most borrowers use funds from the reverse mortgage to pay off the home mortgage in a lump sum. Homeowners will still be responsible for taxes, insurance, and repairs on their homes.
Generally, the more valuable your home, and the older the borrower, the larger the amount you can borrow. Payout options usually include monthly payments and/or a line of credit. When the last surviving homeowner dies, the cash advance must be repaid with interest. If the home is sold, you or your estate can keep any funds that are left over, after that amount has been repaid. You can never owe more than the home is worth when the loan is repaid.
The Home Equity Conversion Mortgage (HECM) is the most popular type of reverse mortgage, and it is insured by the Federal Housing Administration. These types of loans are available to homeowners who are 62 or older, and the money can be used for any purpose.
The Fannie Mae Home Keeper reverse mortgages are available to homeowners who own houses with higher property values than those covered by the HECM loans. This is also a good reverse mortgage option for those who own condos.
Many states offer Deferred Payment Loans, which are low-cost loans usually used for repairing or improving a home. These loans can be called by a variety of names, so you should contact your housing finance agency to find out about options in your area. These are usually available to homeowners with low to moderate incomes.
If you need help with financial affairs for yourself or for your older parents, here are some other resources you should be aware of:
- Medicare: A government health insurance plan for individuals age 65 and over. It is available to U.S. citizens or permanent residents if they, or their spouses, have worked in a Medicare-covered position for at least 10 years.
- Medicaid: A health insurance plan for low-income individuals 65 and older who have few resources.
- Supplemental Social Security (SSI): Monthly cash benefits available for individuals 65 and older who have a limited income and limited resources. There are limits on how much SSI can be received.
- Property Tax Deferral: Many state and local governments have programs that provide loans to seniors who have low or moderate incomes specifically for paying their property taxes. No repayment is required for the entire duration the senior resides in that home.
Posted by edivvyup 
eDivvyup's Founder Weblog 