Posts Tagged "power of attorney"

Last will and testament

Retirees Intent on Leaving Homes to Kids

Every year, older homeowners leave billions of dollars worth of the wealth locked up in their houses to their adult children.

This is a paradox if one considers that home equity is one of retirees’ primary assets and could be a crucial source of income for people who are “house rich and income poor.” Retirement experts searching for an explanation have long wondered whether the deceased had intended to leave the house to family or simply died before they were able to cash in on the equity and spend it.

A new study has an answer: retirees have every intention of letting family members inherit their homes. The people in the study who expressed a stronger desire to leave an inheritance of at least $10,000 were much less likely to sell their homes before they died – with the intention that the house would be part, if not all, of that inheritance.

The foundation for this study is a precise estimate of the housing decisions being made in the final two years of life from a survey of older Americans. The researchers counted as many people as possible, including the deceased – their final living status came from interviews with next of kin – as well as people who continued to be homeowners after going into hospice or a nursing home.

The homeownership rate in the older population peaks around age 70 and starts falling precipitously after 80. But when the elderly in the study died, about half of them still owned their homes, while the other half had sold them and moved into rental housing.

At younger ages, the retirees had been asked to estimate the probability, from 0 (no chance) to 100 (definitely), that they would leave a financial inheritance. Based on this information, the researchers found that those who had said they had a high probability of leaving an inheritance remained in their homes.

There is also a financial advantage to the owner of not selling the house to avoid the capital gains tax, especially if the price appreciated dramatically during their lifetimes. The researchers didn’t account for this incentive in their analysis.

But they did find that the desire to leave a bequest is so compelling that parents held on to their homes even after predicting they might need to pay for nursing home care within a few years. …Learn More

Caregiver Guides Detail Financial Duties

The federal government has released online brochures to give people who are thrust into a caregiving role a better idea of what they’re getting into.

“It’s a big shock at first and a big adjustment,” an Episcopal priest says in the video above. He became his mother’s caregiver after she developed dementia.

But people who anticipate they will one day be a caregiver can soften the blow by studying up on their future responsibilities with the Consumer Financial Protection Bureau’s new guides to caring for a loved one.

The brochures are free and cover four financial responsibilities: guardian, trustee, power of attorney, and fiduciary for a Social Security or Veterans Affairs beneficiary.

They can be downloaded in English or in Spanish at the federal Consumer Financial Protection Bureau (CFPB) website, or the agency will mail them.

CFPB has also posted brochures detailing the caregiver regulations and laws specific to six states: Arizona, Florida, Georgia, Illinois, Oregon, and Virginia. The state guides each cover the same four topics: guardian, trustee, power of attorney, and fiduciary for a Social Security or Veteran Affairs beneficiary.

Non-profit organizations in Michigan and Texas have also published their own brochures on caregiver issues in their states – links to these brochures are also on CFPB’s website. …Learn More