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Re: Best Way to Tap Equity?
Old 09-09-2006, 03:10 PM   #21
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Re: Best Way to Tap Equity?

Assisted living will wipe out all of her assets very quickly.* If you guys are already helping her out some, probably the best thing to do is sell the condo and move her into an apartment nearby.* Put the cash into some fixed investments and move this money to close relatives over the coming years via gift allowances.* Although this is technically not her money anymore, treat it as if it were and use it to pay rent and expenses until such time as she has to be moved into a care facility...then let medicare/medicaid pay for it.

Seems to me that the corporation's race to the top is resulting in a race to the bottom for the employee's quality of life. FIRE can't come soon enough.
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Re: Best Way to Tap Equity?
Old 09-09-2006, 04:50 PM   #22
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Re: Best Way to Tap Equity?

move this money to close relatives over the coming years ... then let medicare/medicaid pay for it. wonder the system is in such bad shape.

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Re: Best Way to Tap Equity?
Old 09-09-2006, 05:17 PM   #23
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Re: Best Way to Tap Equity?

Here is the classic problem all of us early baby-boomers face: parents whose elder years are not adequately funded for the basics.* In my grandparents day they moved in with the kids (usually a daughter).

I don't think OP's mom-in-law has any more spending to squeeze.* So what to do?

Continuing Care Communities require that a new resident have adequate funds such that they won't become dependent.* This lady is past that point, I doubt that the money from the sale of her condo will be adequate, but no harm asking.

If she sells the condo and moves to a rental apartment it is possible she could find one she could aford for a while BUT the move will disconnect her socially and in a few years she will have exaused her savings.* Then what?

If MIL is capable of independent living then the best thing, long term, may be to support her in some form where she is and use the net on the condo to pay for care when that day comes.* I would put the condo in a revocable living trust with a grantor trustee and both the sibs as regular trustees.* The trust should provide for the sale of the condo if the grantor passes away or if any combo of two trustees agrees - the proceeds to be used for maintance of MIL.* That way if the condo needs to be sold before mom dies the kids could that easily sell it.
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Re: Best Way to Tap Equity?
Old 09-09-2006, 05:43 PM   #24
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Re: Best Way to Tap Equity?

In our case, my father wanted to live in his condo until he passed on. My sister and I were able to help him do that.

Dad sold his condo to us, carried back a 2nd deed of trust ("DOT") for the difference between a new 1st DOT and the sales price at fair market value. Sis and I rented to him for a bit less than the amount due to him on the 2nd DOT ... so, cash flow to Dad each month, he got to live where he wanted, and we got some tax benefits.

In your case, perhaps the rental out would be for her to retain a very small percentage of ownership ... an attorney might need to help with the details.

Worked for us. Dad was where he wanted to be, looking out on his putting green until the end. Sis and I had the tax benefits and appreciation to offset our costs in aiding Dad. Only the IRS lost, but it was all legal, as we rented to him at fair market value.

Best of luck.
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Re: Best Way to Tap Equity?
Old 09-10-2006, 12:29 PM   #25
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Re: Best Way to Tap Equity?

Again, thanks for all the comments and inputs.* You folks are a world of knowledge........* And I have a lot of work to do following up and researching the best path to follow.

Our goal is to keep DW's mom happy as long as possible.* She paid her dues by raising DW and three siblings as a single mom after hubby died young, sacrificed much, has never been a whiner to any degree and is generally a pleasant person.*When DW and I were both working and raising the family, she'd come to our home every Tuesday morning and do the laundry, including ironing my underwear! Even as just an in-law, it would bug me to see her downgrade her already modest living standard at this stage of life.

But, there is a small cash flow problem that is sure to increase over time.* I think we've done a good job of monitoring benefits available to her.* Illinois Cares pays her SS Part D premium and fills in the "doughnut hole."* She gets a break on her car registration and property taxes on the condo through another Illinois program.* She doesn't seem to spend money she shouldn't that I've noticed, except perhaps giving to charity when she is on the verge of needing charity herself!* Example: she*still sends in a modest check every year to support public broadcasting because she watches/listens at lot.......

We did look at meals on wheels for her......but not as a recipiant.* She wanted to volunteer to help prepare and deliver!* Fortunately, we were able to help her understand that she can't afford a tank of gas every week to deliver meals!

How to utilize the $150K equity in the condo to best advantage seems to be the question and a number of alternatives have been mentioned.* All will be investigated.* Meeting with an elder law expert/attorney will be part of the plan.* How that equity intertwines with welfare availability now and in the future is obviously important.* Example:* I went to the Illinois Dept on Aging web site and determined that only a small amount of additional reportable income will result in losing her SS Part D help from Illinois Cares!* *And even at her modest income, she already is too "rich" to qualify for federal SS "Extra Help."* Makes you wonder how poor you have to be to be "poor."

Again, thanks!* I'll report back.


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