Caregiving Spouses Often Don’t Seek Help

There are more than 42 million unpaid family caregivers in the United States, including spouses, adult children, and others. A recent report, issued by the United Hospital Fund and the AARP Public Policy Institute, focuses on spousal caregivers. The report reveals how spousal caregivers desire to take care of ALL of a spouse’s needs, and are less likely to seek help when it comes to medical tasks such as wound care, medication management, and more.

Report findings include:

  • 84% of spousal care recipients receive no in-home support from health care professionals, compared with 65% of non-spousal care recipients.
  • 58% of the spouses reported no additional help from family, friends, or home care aides, compared with 20% of non-spouses.
  • Spouses who are caregivers are on average a decade older than non-spousal caregivers (median age 64 vs. 54.)
  • Additional research needs to be done to help tailor interventions that support but do not supplant the primary bond between spouses.

The report says it is unclear why spouses receive less help, hypothesizing that it could be choice, lack of awareness about resources, financial limitations, or fear of losing independence.
“As a former spousal caregiver, I certainly understand the desire to take care of all of a spouse’s needs,” said coauthor Carol Levine, director of the Families and Health Care Project for the United Hospital Fund. “But the care that is needed and the responsibilities thrust upon family caregivers by our health care system — typically, without adequate support — are more than any family caregiver, particularly an older spouse, can handle alone.”
If you are a spousal caregiver, please read some of our recent blog posts that focus on caregiver support and alleviating stress, including New Support for Caregivers of Veterans, Meeting the Needs of Dementia Patients and their Caregivers, and more (use the search function on this blog or click on the topic “caregiving” on the lower right.)
What happens when your loved one needs more help than you can provide? Nursing homes in Northern Virginia cost $9,000 – $12,000 per month (a few thousand less in the Fredericksburg, Virginia area), which can be catastrophic even for wealthy families. By being proactive and helping your loves ones plan for long term care in advance, you can help make sure your loved ones always receive the care they need without worry or financial struggle. You’ll further avoid many costly legal headaches that often result when people are not prepared for incapacity or ongoing care needs. It’s never too early to get started. Learn more at The Fairfax and Fredericksburg Medicaid Asset Protection Law Firm of Evan H. Farr, P.C. website, or call us at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to make an appointment for an introductory consultation.

Kenny Chesney Brings Music to Those with Alzheimer’s

Music has been found to connect people with Alzheimer’s to memories, enabling them to open up to loved ones and even enhancing their quality of life. Sometimes, the response is immediate and shocking. In fact, according to Geri Hall, a clinical nurse specialist at the Banner Alzheimer’s Institute, “music activates a part of the brain that stays active despite the dementia, calming those who are distressed, increasing socialization, and even decreasing the need for mood controlling medications.”

In November 2011, country star Kenny Chesney’s father was diagnosed with Alzheimer’s disease. When Kenny found out, he was determined that his father would not forget him and that he would not forget his father. He expressed his love for his father in a beautifully moving musical tribute to him and to all who are living with and dealing with Alzheimer’s disease, entitled “While He Still Knows Who I am.”

In addition, in an effort to help others suffering from this debilitating disease, Chesney teamed up with a non-profit organization, Music and Memory, to bring music to Alzheimer’s and dementia patients. The effort involves collecting iPods and other digital music players personalized with the help of family to include songs that were favorites of their loved ones, and distributing them to seniors with Alzheimer’s in nursing homes.

In a recent public service announcement (PSA) for Music and Memory, Chesney urges his fans to donate money or a music player to the non-profit. According to Chesney, “These debilitating diseases are often so heartbreaking, and music has been found to be therapeutic for those suffering from the Alzheimer’s, leading to improved social engagement and quality of life. The gift of a music player full of favorite songs can help reconnect people with Alzheimer’s to good memories and to the people around them. And that’s a ray of hope for a lot of people.”

Another nonprofit that creates songs inspired by causes, such as Alzheimer’s disease, is Music for a Cause. The group recently posted a beautiful song about Alzheimer’s on YouTube, entitled “From His Window.

Music, and other non-drug treatment options, has been proven to offer ways to reduce difficult behaviors, while improving patient quality of life and a reduction in the need for medications. For example, instead of focusing on drug treatments, many of which have failed in clinical trials, nursing homes such as the Coler-Carter Nursing Home in New York, have incorporated the Music and Memory program into patient treatment. A year after the personalized music program had been in place, nurses were surveyed to assess its effectiveness, and respondents indicated that nearly 40 to 45% of patients showed some improvement, and the use of antipsychotic drugs dropped an astounding 38%. “Residents are often agitated when they receive care, such as bathing or a morning routine,” says Margaret Rivers, Associate Director for Patient Services. “The music brings them back to a place in their lives that had good memories.” When residents are more relaxed, “staff are able to spend more social time with the residents. They feel uplifted.” Please read our blog post for more examples of non-drug treatment options for those with Alzheimer’s.

At the Farr Law Firm, we think it is heartwarming to know that big celebrities such as Kenny Chesney are making leaps in helping to advance Alzheimer’s treatment, and are excited to see that programs such as Music and Memory are enhancing the quality of life for Alzheimer’s patients. Do you have a loved one who is suffering from Alzheimer’s or another type of dementia? Persons with Alzheimer’s and their families face special legal and financial needs. At the Farr Law Firm, we are dedicated to easing the financial and emotional burden on those suffering from dementia and their loved ones. If you have a loved one who is suffering from Alzheimer’s, we can help you prepare for your future financial and long-term care needs. We help protect the family’s hard-earned assets while maintaining your loved one’s comfort, dignity, and quality of life by ensuring eligibility for critical government benefits. Call us today at 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg, to make an appointment for an introductory consultation.

Washington Post’s Michelle Singletary’s Impassioned Plea

Michelle Singletary, who writes a financial column for the Washington Post, often shares personal stories to spare others from making financial mistakes. In a recent column and interview on WBUR, she wrote about the importance of estate planning, and emphasized the need to “take action today.”

In the article, Ms. Singletary described how her mother was in a house fire and is in critical condition. When working with health professionals, Ms. Singletary and her sister are experiencing a lot of stress because her mother never prepared any Incapacity Planning documents indicating her wishes for medical care or life-prolonging procedures.

Ms. Singletary suggests executing Advance Medical Directives, a Financial Power of Attorney, and a letter of instructions, including a list of financial assets and information on how to access them, including on-line usernames and passwords. Ms. Singletary emphasized that it is important to meet with an attorney who knows about changes in the law and specific documents that must be signed. She said that “I’m a frugal person but this is not the time to be a penny pincher.”

According to Ms. Singletary, “If you care about those who will handle things for you in case you become incapacitated, help them now. Do it if you have dependent children or someone depending on you financially. Do it for the people you will leave behind.”

For more details on Incapacity Planning, read our recent blog post.

If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact The Law Firm of Evan H. Farr, P.C. as soon as possible at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to schedule your appointment for an introductory consultation.

Before You Choose a Nursing Home . . .

Q. I recently read a sad article in the Washington Post about an Alexandria woman named Anne Bailey Farr (not sure if she is a relative of yours?), who is facing charges in connection with the death of her 98-year-old mother, who was found by police on her bedroom floor. When questioned, Farr stated that her mother had fallen out of bed 24-48 hours before the fire department was called, and that she did not provide her mother with any food or medication during the hours she spent on the floor. A pill bottle containing blood pressure medication for Friday and Saturday was found near her mother’s body. In my opinion, Ms. Farr’s mother would have been much safer in a nursing home, where her medication would have been monitored, and she would have never been in the situation described.

The story caught my eye because, as a caregiver for my 90-year-old father, I often wonder if he is better off in a nursing home. He had a stroke last year, and ever since, he has had trouble with balance and mobility, and his memory is starting to diminish. Although I would never leave him alone for too long and would never neglect his needs, I worry about what happens when I have to leave the house for a little while to walk my dog, get the mail, or pick up a few items at the grocery store.

I believe a nursing home is the best place for my father, and like most people in my situation, I want to choose one with highly trained staff that will meet his needs and ensure his safety. In your experience, what are some things I should look out for when selecting a nursing home for my father?

A. I read the article about Ms. Farr and her mother (who are not relatives of mine) and I too was saddened about the situation and feel it could have been prevented had she been in a nursing home with skilled caregivers and medication monitoring.

In your situation, given your father’s health concerns, you are making a wise choice in looking into long-term care options, such as skilled nursing home care, for him. In my experience with clients and in writing the Nursing Home Survival Guide, I have found that these are some important things you should do (and look out for) when selecting a nursing home for your father:

  1. Make scheduled and unscheduled visits:  When you’ve located a few facilities that you’d like to consider more thoroughly, plan on visiting each one, at different times and on different days of the week. Make sure you visit during mealtime, to ensure that during the busiest of times, residents seem to be getting enough food or drink.
  2. Pay attention to smells, sounds, and temperature: As you are walking around, take note of what you hear and don’t hear. Is it silent? Is there activity? How clean does it look? Are the residents dressed appropriately for the season? When it comes to smell, if it smells like urine, that’s obviously a bad sign. But if all you smell is pine cleaner, I’d be a little suspicious about that, too, wondering what odors it is covering. You want the place to smell like a clean home, with no strong scent that’s good or bad.
  3. Ask about activities for residents:  A quality nursing home is going to have a daily calendar of activities in which your father can participate. If your father is room-bound, activities should be brought to his room.
  4. Find out the ratio of nurses to residents and the turnover rate: The marketing person or admissions director will probably give you the tour, but try to meet the director of nursing, the administrator, and the executive director too. Ask how long they’ve worked there. Ask how long their predecessors were there. If it’s less than six months, and you see a pattern, that should be a concern; high administrator turnover can be an indicator of a lower quality of care. In addition, ask the nursing assistants and other staff if they work a lot of overtime and double shifts. If so, they may be overstressed and it also could be a sign of short staffing that can affect patient care. You can also check out a nursing home’s staff ratio rating on the Nursing Home Compare tool at Medicare.gov.
  5. Know your rights: When you’ve decided on a facility, you should know your rights and those of your family member. Before you or your father sign the admissions agreement, understand what you’re signing, and do not sign any paperwork unless everything has been fully explained.
  6. Review policies: The admissions contract should, at a minimum, contain the daily room rate, reasons for discharge and transfer from the nursing home, and the policy regarding payment of the daily room rate if your father goes to the hospital or the family brings the resident home for a short period of time.

Nursing homes in Northern Virginia cost $9-12,000 a month. To protect your family’s hard earned money and assets from these catastrophic costs, the best time for your father to create his long-term care strategy is NOW.  Generally, the earlier someone plans for long-term care needs, the better.  But it is never too late to begin preparing.  Even if your were father were already in a nursing home receiving long-term care, it would not be too late to do Long-term Care Planning, also called Lifecare Planning and Medicaid Asset Protection Planning. Please call us at 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg to make an appointment for an introductory consultation.

 

Heartbleed Bug: How to Protect Yourself

Certain websites, including Yahoo, USMagazine.com, Pinterest, among others, were recently exposed to a major security bug called Heartbleed. The bug has the potential to expose private information to cybercriminals, including passwords and access to credit card information that users enter into websites, applications, email, and even instant messaging services.

Heartbleed could be one of the biggest security threats the Internet has ever seen. If you have logged into any of the affected sites over the past two years, your account information could be compromised. Fortunately, there are things you can do to protect yourself, such as:

  • Check whether the sites you use are affected. If you don’t want to read through the long list of websites with the security flaw, the password security firm LastPass has set up a Heartbleed Checker, which lets you enter the URL of any website to check its vulnerability to the bug and if the site has issued a patch. You can also access a quick list of popular websites and whether they were affected on Mashable.com.
  • Change your passwords for major accounts, including email, banking and social media logins, on sites that were affected by Heartbleed but patched the problem. However, if the site or service hasn’t patched the flaw yet, there’s no point to changing your password until they have done so, so be sure to wait for notice or check with the company.
  • When choosing a password, don’t choose one that is obviously associated with you, such as your pet’s name. Don’t use words that appear in a dictionary, because as incredible as it seems, hackers can calculate the encrypted forms of whole dictionaries and easily reverse engineer your password. It is best to choose different passwords for different sites that include a mixture of unusual characters or a phrase that you can easily remember, where you substitute numbers and characters for letters

For more details about Heartbleed, visit http://heartbleed.com/, the official page covering the bug.

As you can see, changing your passwords is one way to protect your digital accounts while you are alive. However, what happens when your loved ones need access to your online services when you are deceased? One way to protect digital accounts would be specifying digital assets in your estate planning documents and specifically giving control over these digital assets to your executor or trustee, who could then take over upon your death.  An easier way is to store all of your digital user names and passwords in a secure password safe, such as keepass or lastpass and give your executor/trustee the password and location of the password safe or the means to locate your master password, such as by writing down your master password and putting it in an envelope in your safe deposit box. Read more about this on our blog post about digital assets.

If you don’t have Estate Planning, Incapacity Planning, or Long Term Care Planning in place, now is the time to get started.  Call us today in Fairfax at 703-691-1888 or in Fredericksburg at 540-479-1435 to set up an appointment for an introductory consultation.

 

Are You Prepared For Incapacity?

What would happen if you were in an accident, or had a stroke, or for another reason you suddenly became incapacitated or comatose, and were unable to make decisions for yourself? It is difficult to think about, but if this happens, some people want to be kept alive at all costs; while others would prefer to end all measures for resuscitation. However, less than a third of the population has completed Incapacity Planning documents, so for nearly 70% of Americans, family members have to make this important decision on their behalf. This often leads to wishes not being met, and more stress and grief for loved ones.

Why don’t people plan for incapacity? Reasons often range from a natural tendency to procrastinate, the preconception that it is a costly and complex process; and sometimes even the superstitious feeling that if you don’t ask for it, it won’t occur. Another common belief is that if we become unable to make decisions for ourselves, our family will decide what is best for us. All of these reasons can lead to difficult and emotionally charged situations if you or a loved one becomes incapacitated, which could easily be avoided with proper Incapacity Planning.

To begin the Incapacity Planning process, seniors should sit down with their family members to openly discuss their needs and the roles of loved ones in assuring those needs are met. Important topics of discussion for families should include transitioning to long-term care, caregiver roles, financial considerations, and incapacity wishes. Because of the difficulty of such topics, many families don’t have the conversation until it is too late. For more details on how to broach this conversation with a loved one, please read our blog post on the topic.

Once this important conversation occurs, and important decisions are discussed, it is important to work with a qualified elder law attorney (preferably a Certified Elder Law Attorney) to ensure that the Incapacity Planning documents listed below are in place. Doing so is the best way to ensure that your wishes are met should you become unable to make important decisions for yourself.

  • Advance Medical Directive. An Advance Medical Directive communicates your desires to your physicians and family members regarding all forms of medical treatment, and may be used to instruct your physician to withhold or implement specific life-prolonging procedures if at any time you are diagnosed as having a terminal condition and your physicians have concluded that there is no chance of recovery. Without this document, families could have serious disagreements, or someone who doesn’t share the individual’s values may be making the decisions.  Our firm includes within this document a proprietary Long-Term Care Directive, which discusses numerous issues with regard to long-term care should you ever find yourself in need of long-term care at home, or in assisted living, or in a nursing home.
  • Financial Power of Attorney. When you give someone Financial Power of Attorney, you are giving that person the right to access all or portions of your finances. The document typically goes into effect immediately after it is signed, but it intended to be used by your Agent only when needed. This person would also be in charge of your finances if you become incapacitated. Failing to procure this document can result in a costly legal battle for your family in which a court will select a guardian. In addition, having a Financial Power of Attorney avoids the “nightmare of living probate” — the time consuming, expensive, and publicly embarrassing process whereby someone has to go to court to have you declared mentally or physically incompetent and then one or more persons need to be appointed to serve as your legal guardian and/or conservator, which process is subject to ongoing court supervision.
  • Revocable Living Trust: A Revocable Living Trust (RLT) generally provides for the creator of the trust (and, if applicable, the creator’s spouse) to have full use of the trust income and principal for life. A major benefit of an RLT is avoiding the costly and public probate process. A RLT also offers protection from incapacity by providing uninterrupted management of your assets by your trustee and sparing you and your family the potential publicity and expense of a court-appointed guardianship.

To ensure your wishes are met, it is important to start your planning while your mind is still sharp and your judgment is sound, so you are prepared in advance if a crisis occurs. If you have not done Incapacity Planning, Estate Planning, or Long-Term Care Planning, or if you have a loved one who is nearing the need for long-term care or already receiving long-term care, please contact The Law Firm of Evan H. Farr, P.C. as soon as possible at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to schedule your appointment for an introductory consultation.

A Successful Easter Dinner for Someone with Alzheimer’s

Q. This year, Grandma Pearl will be joining us for Easter dinner. She has Alzheimer’s and her caregiver will be joining us, as well. We are concerned that the dinner could present challenges for her, since she is on a regimented meal time schedule each day. Can you suggest any tips to make the meal a success?

A. Many of our favorite experiences and memories include preparing and sharing holiday dinners with family members. However, when a person has Alzheimer’s disease or another type of dementia, the ability to eat independently may diminish, and mealtimes can become challenging. Often, too, the person with dementia may be experiencing changes, such as decreased appetite, that are part of normal aging. To make your Easter dinner with grandma a success, familiar routines, rituals, and food choices may need to be adapted to meet her day-to-day needs and to address changes that occur as the disease progresses. Below are a few tips to help things go smoothly:

  • Reduce Noise: Lots of noise and activity at mealtimes can be very distracting, causing the person with memory loss to lose interest in eating their meal. Therefore, keep extraneous noise to a minimum. While it’s nice to play music in the background, be sure it is Grandma’s favorite music, not yours, and that it’s not too loud or too fast.  
  • One Person at a time: When assisting the person with memory loss during mealtime, only one person at a time should be talking to them. More than one voice can be distracting, and might even cause them to become more confused or agitated.
  • Place fewer items on the plate: Placing too much food on a plate can be overwhelming to some, which can cause them to either play with it or ignore it. If grandma becomes easily confused, place fewer items of food on her plate or simply serve one food item at a time.
  • Allow her as much independence as possible: If grandma can still manage their utensils, allow her to do so. If she can still cut their food, don’t cut it for her. You might be surprised to see that she will sometimes still take a few bites independently if she is just provided the opportunity! If you notice that grandma can no longer manage utensils, don’t immediately begin to feed her. First try some hand-over-hand assistance by gently placing your hand over their hand which guides them to complete the activity.
  • Provide verbal and visual encouragement: As you raise the fork to your mouth with a pleasant tone of voice you might say to grandma, “The ham is delicious, you should try some, too.” Your encouragement might prompt her to take a bite.
  • Allow her to walk and eat: If grandma no longer likes to sit during her meal, place finger foods in a bowl with non-spill edges or in a wide-mouthed cup, which will enable her to carry her food and eat as she walks. If she doesn’t have the urge to drink liquids, you’ll also want to be sure that you are providing her with adequate hydration by offering drinks, popsicles, or gelatin.

Despite ongoing challenges, a successful family meal is possible, and can be yet another opportunity for grandma, her caregiver, and her loved ones to bond and succeed together.

Persons with Alzheimer’s and their families face special legal and financial needs. At The Fairfax and Fredericksburg Alzheimer’s Planning Law Firm of Evan H. Farr, P.C., we are dedicated to easing the financial and emotional burden on those suffering from Alzheimer’s or other dementias.  If you have a loved one who is suffering from Alzheimer’s, or a family member who is nearing the need for long-term care or already receiving long-term care, call us at 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg to make an appointment for an introductory consultation.

A Successful Easter Dinner for Someone with Alzheimer’s

Q. This year, Grandma Pearl will be joining us for Easter dinner. She has Alzheimer’s and her caregiver will be joining us, as well. We are concerned that the dinner could present challenges for her, since she is on a regimented meal time schedule each day. Can you suggest any tips to make the meal a success?

A. Many of our favorite experiences and memories include preparing and sharing holiday dinners with family members. However, when a person has Alzheimer’s disease or another type of dementia, the ability to eat independently may diminish, and mealtimes can become challenging. Often, too, the person with dementia may be experiencing changes, such as decreased appetite, that are part of normal aging. To make your Easter dinner with grandma a success, familiar routines, rituals, and food choices may need to be adapted to meet her day-to-day needs and to address changes that occur as the disease progresses. Below are a few tips to help things go smoothly:

  • Reduce Noise: Lots of noise and activity at mealtimes can be very distracting, causing the person with memory loss to lose interest in eating their meal. Therefore, keep extraneous noise to a minimum. While it’s nice to play music in the background, be sure it is Grandma’s favorite music, not yours, and that it’s not too loud or too fast.  
  • One Person at a time: When assisting the person with memory loss during mealtime, only one person at a time should be talking to them. More than one voice can be distracting, and might even cause them to become more confused or agitated.
  • Place fewer items on the plate: Placing too much food on a plate can be overwhelming to some, which can cause them to either play with it or ignore it. If grandma becomes easily confused, place fewer items of food on her plate or simply serve one food item at a time.
  • Allow her as much independence as possible: If grandma can still manage their utensils, allow her to do so. If she can still cut their food, don’t cut it for her. You might be surprised to see that she will sometimes still take a few bites independently if she is just provided the opportunity! If you notice that grandma can no longer manage utensils, don’t immediately begin to feed her. First try some hand-over-hand assistance by gently placing your hand over their hand which guides them to complete the activity.
  • Provide verbal and visual encouragement: As you raise the fork to your mouth with a pleasant tone of voice you might say to grandma, “The ham is delicious, you should try some, too.” Your encouragement might prompt her to take a bite.
  • Allow her to walk and eat: If grandma no longer likes to sit during her meal, place finger foods in a bowl with non-spill edges or in a wide-mouthed cup, which will enable her to carry her food and eat as she walks. If she doesn’t have the urge to drink liquids, you’ll also want to be sure that you are providing her with adequate hydration by offering drinks, popsicles, or gelatin.

Despite ongoing challenges, a successful family meal is possible, and can be yet another opportunity for grandma, her caregiver, and her loved ones to bond and succeed together.

Persons with Alzheimer’s and their families face special legal and financial needs. At The Fairfax and Fredericksburg Alzheimer’s Planning Law Firm of Evan H. Farr, P.C., we are dedicated to easing the financial and emotional burden on those suffering from Alzheimer’s or other dementias.  If you have a loved one who is suffering from Alzheimer’s, or a family member who is nearing the need for long-term care or already receiving long-term care, call us at 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg to make an appointment for an introductory consultation.

Changes Make Reverse Mortgages Harder to Get

Last October, the President signed HR 2167 – “The Reverse Mortgage Stabilization Act of 2013”. As a result, changes have been made to make it harder to qualify for a reverse mortgage.

To be eligible for a reverse mortgage you must be at least 62 years old, own your own home (or owe a relatively small balance) and currently be living there. You also need to undergo a financial assessment to determine whether you can afford to make all the necessary tax and insurance payments over the projected life of the loan.  Below are some of the changes that have recently occurred:

  • Increased Lender Scrutiny: Now, lenders will look at your sources of income, assets, and credit history. Depending on your financial situation, you may be required to put part of your loan into an escrow account to pay future bills. If the financial assessment finds that you cannot pay your insurance and taxes and still have enough cash left to live on, you will be denied.
  • Only HECM Reverse Mortgages Are Insured: Currently, the only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender.
  • Enhanced Qualification Criteria: The amount you can get through a reverse mortgage depends on your age, your home’s value, and the prevailing interest rates. Generally, the older you are, the more your house is worth, and the lower the interest rates are, the more you can borrow. To calculate how much you can borrow, visit reversemortgage.org.
  • Additional Fees: Reverse mortgages currently have a number of up-front fees including a 2% lender origination fee for the first $200,000 of the home’s value and 1% of the remaining value, with a cap of $6,000; a 0.5% initial mortgage insurance premium fee; along with an appraisal fee, closing costs and other miscellaneous expenses. In addition, you’ll also have to pay an annual mortgage insurance premium of 1.25% of the loan amount. Most fees can be deducted for the loan amount to reduce your out-of-pocket costs at closing.
  • More Ways to Receive Funds: You can receive the money in a lump sum, a line of credit, regular monthly checks or a combination. In most cases, however, you cannot withdraw more than 60% of the loan value during the first year. If you do, you’ll pay a 2.5% upfront insurance premium fee.
  • Counseling Requirement: All borrowers are required to get face-to-face or telephone counseling through a HUD approved independent counseling agency before taking out a reverse mortgage. For more details, visit hud.gov or call 800-569-4287.

For additional details on why new rules have gone into effect, please read our blog post on the subject. Keep in mind that keeping money in a reverse mortgage line of credit in Virginia, and in most other states, will not count as a resource for Medicaid eligibility purposes so long as the house itself is an exempt resource. (For Medicaid payment of long-term care, the applicant’s principal residence is excluded from countable resources for the six months of continuous institutionalization provided the applicant intends to return home and provided the equity in the home property does not exceed $536,000. Regardless of the amount of home equity, after six months of continuous institutionalization the nursing home resident’s home will become a countable resource, unless the home is occupied by a spouse, dependent child under age 21, or a blind or disabled child.)

However, transferring the money from the reverse mortgage line of credit to a bank account and leaving it there past the end of the month would convert the exempt home equity into a countable resource and therefore would affect Medicaid eligibility.  This important distinction between countable resources and exempt assets is not a simple black and white issue — if you or your loved one is facing the possible need for long-term care, you should get an opinion from a Certified Elder Law Attorney, such as Evan H. Farr. To make an appointment for an introductory consultation, please call the Fairfax Medicaid Asset Protection Law Firm of Evan H. Farr, P.C.

Changes Make Reverse Mortgages Harder to Get

Last October, the President signed HR 2167 – “The Reverse Mortgage Stabilization Act of 2013”. As a result, changes have been made to make it harder to qualify for a reverse mortgage.

To be eligible for a reverse mortgage you must be at least 62 years old, own your own home (or owe a relatively small balance) and currently be living there. You also need to undergo a financial assessment to determine whether you can afford to make all the necessary tax and insurance payments over the projected life of the loan.  Below are some of the changes that have recently occurred:

  • Increased Lender Scrutiny: Now, lenders will look at your sources of income, assets, and credit history. Depending on your financial situation, you may be required to put part of your loan into an escrow account to pay future bills. If the financial assessment finds that you cannot pay your insurance and taxes and still have enough cash left to live on, you will be denied.
  • Only HECM Reverse Mortgages Are Insured: Currently, the only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender.
  • Enhanced Qualification Criteria: The amount you can get through a reverse mortgage depends on your age, your home’s value, and the prevailing interest rates. Generally, the older you are, the more your house is worth, and the lower the interest rates are, the more you can borrow. To calculate how much you can borrow, visit reversemortgage.org.
  • Additional Fees: Reverse mortgages currently have a number of up-front fees including a 2% lender origination fee for the first $200,000 of the home’s value and 1% of the remaining value, with a cap of $6,000; a 0.5% initial mortgage insurance premium fee; along with an appraisal fee, closing costs and other miscellaneous expenses. In addition, you’ll also have to pay an annual mortgage insurance premium of 1.25% of the loan amount. Most fees can be deducted for the loan amount to reduce your out-of-pocket costs at closing.
  • More Ways to Receive Funds: You can receive the money in a lump sum, a line of credit, regular monthly checks or a combination. In most cases, however, you cannot withdraw more than 60% of the loan value during the first year. If you do, you’ll pay a 2.5% upfront insurance premium fee.
  • Counseling Requirement: All borrowers are required to get face-to-face or telephone counseling through a HUD approved independent counseling agency before taking out a reverse mortgage. For more details, visit hud.gov or call 800-569-4287.

For additional details on why new rules have gone into effect, please read our blog post on the subject. Keep in mind that keeping money in a reverse mortgage line of credit in Virginia, and in most other states, will not count as a resource for Medicaid eligibility purposes so long as the house itself is an exempt resource. (For Medicaid payment of long-term care, the applicant’s principal residence is excluded from countable resources for the six months of continuous institutionalization provided the applicant intends to return home and provided the equity in the home property does not exceed $536,000. Regardless of the amount of home equity, after six months of continuous institutionalization the nursing home resident’s home will become a countable resource, unless the home is occupied by a spouse, dependent child under age 21, or a blind or disabled child.)

However, transferring the money from the reverse mortgage line of credit to a bank account and leaving it there past the end of the month would convert the exempt home equity into a countable resource and therefore would affect Medicaid eligibility.  This important distinction between countable resources and exempt assets is not a simple black and white issue — if you or your loved one is facing the possible need for long-term care, you should get an opinion from a Certified Elder Law Attorney, such as Evan H. Farr. To make an appointment for an introductory consultation, please call the Fairfax Medicaid Asset Protection Law Firm of Evan H. Farr, P.C.

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