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By Ron Greenwald

A Senior’s Home

On 06, May 2015 | No Comments | In Blog, Education | By Ron Greenwald

By Ronald L. Greenwald, MBA, Senior Real Estate Specialist

As professional fiduciaries know, planning ahead is an important tool to protecting our elders and their quality of life. The following article is for both licensees and consumers to take a closer look at what might be the most valuable asset any of us will own in our lifetime.

What is or should be the goal of your estate plan? What should be the goal of our work and efforts when dealing with a family?

My answer is, “working to ensure the highest quality of life for our elder – A life free of fear and intimidation – A life at peace filled with joyful memories of one’s past, filled with hope for the family’s future.”

A Realtor’s advice…. what do I see over and over again that is a detriment to the goals I noted above?

1. The home of deferred maintenance.    I can walk into a senior’s home and tell you immediately: What is the state of our senior’s mental and physical capacity.

It is no mystery that as our loved one (or your client) ages, their capacity to cope with both the bones of an aging home, and the upkeep that is required, diminishes significantly over time. Whether you are the fiduciary and/or the daughter or son of our beloved senior, it is imperative that periodic checks are made on the home’s condition. The family should make it a point to have a professional home inspector come to the home, perhaps on an annual basis. The preventative medicine of a thorough inspection (including the detection of moisture in the walls) may cost around $500.

Like any situation, by catching issues early on, you will save 1000’s of dollars in home repair and fixes. More importantly, you keep your loved one living in a safe, and sane, environment. For sure, an annual termite inspection must be part of the care package for the home. We continually shock family members when we tell them the home is termite infested and that the cost to the estate to fix the issue is going to run into $10,000 to $30,000, or more. Is the homeowner a collector of treasures or a hoarder? Sons and daughters are surprised to hear that their beloved Mom or Dad is living in what, at best, can be said a “state of squalor”. Using the services of a qualified home inspector may make it easier to talk with the elder about his/her living environment.

2. The Adult Child living with his/her parent.    A sibling has been living with Mom/Dad, and now the parent needs to move into a senior living community and/or has passed away. When there are multiple heirs/siblings set to inherit the proceeds from the sale of real estate, and one of the heirs has lived in the property for any period of time, the scenario can easily deteriorate, and may destroy any hope of favorable future family gatherings. Do it right – if a son or daughter is going to live with his/her parent(s), set up a rental agreement at the very beginning of the process. Set up the “what if” scenarios through the estate plan. If the son/daughter is truly acting in the capacity of a caregiver, set up a compensation plan. Make it a business transaction, which includes good documentation (a great topic to discuss with your estate planning attorney). This will facilitate clarity when it comes time to sell the real estate. Hopefully, the result will be family harmony and respect for each siblings role in the care and love for a parent.

3.  Using the home as a source of cash.    As it is no surprise that the home is usually the senior’s largest source of capital, and the homeowner, too often, views the home as an unending source of cash without proper consultation with the “right” professionals to design the appropriate financial strategy.  The homeowner is bombarded with reverse mortgage info commercials, bank ads and other marketing techniques such as home equity loans.  Certainly, these financial instruments have a place and time, but are often purchased in isolation by an elder, without appropriate professional advice.  I suggest that anyone considering a reverse mortgage get help determining their budget and cash needs first, in detail, with their CPA, Financial Advisor, or attorney. This way, you will have all the facts, and you can consider a charitable gift annuity, or other financial remedies, and thoroughly compare all the possibilities to learn what is best for you, in the long run.

Bottom line….We must all work together to circle our loved ones with the best and brightest team of legal, financial, and care professionals.

Ron Greenwald was a CPA, then mortgage lender, and now a Senior Real Estate Specialist who is deeply involved in the prevention of elder abuse in San Diego County.

-As published in The Guardian

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