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Old 10-11-2016, 05:28 PM   #21
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I don't understand - you have plenty of money NOW (by your own hypotheticals)... but you want more through some wack-a-doodle scheme that will have an investor incentivised to have you die sooner rather than later.. No thank you.
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Old 10-11-2016, 05:29 PM   #22
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There is no value to what you have given... as others have said, there is no value in an estate that does not have any spending limits...


NOW, if you want to add a yearly spending limit that is hard and fast.... well, you can put a value on that...


BUT, just to throw out a number.... if you do a present value of $3 million in 30 years (IOW, you still have $3 mill left) at 10% you get a present value of $172K.... and at 15% it is only $45K.... so, as someone else said, not as much as you think....
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Old 10-11-2016, 06:06 PM   #23
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.... you want more through some wack-a-doodle scheme that will have an investor incentivised to have you die sooner rather than later.. No thank you.
Isn't that why tontines are illegal?

https://www.washingtonpost.com/news/...of-retirement/

I don't really get why WaPo has them as sleazy - everybody dies - but OP's idea sounds kinda tontine like and kinda like Aids patients selling the naming of their life insurance beneficiary for Cash! Now! back a decade or more ago.
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Old 10-11-2016, 06:16 PM   #24
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There is no value to what you have given... as others have said, there is no value in an estate that does not have any spending limits...


NOW, if you want to add a yearly spending limit that is hard and fast.... well, you can put a value on that...


BUT, just to throw out a number.... if you do a present value of $3 million in 30 years (IOW, you still have $3 mill left) at 10% you get a present value of $172K.... and at 15% it is only $45K.... so, as someone else said, not as much as you think....
Appreciate your thoughts. I'm not trying to sell anybody on the idea. Just looking for logical ways to assess the pro's and con's from my perspective and the perspective of an investor. Thus far, neither is looking very good from the comments received. Doesn't hurt to think out of the box.

Texas Proud --- even if I were to look at a normal life span of an additional 25 years instead of 30 in your example the 10% would only produce a present value around $275,000. However 6% would produce a present value of about $710,000 at 25 years. Did I do that right? Your comment about yearly spending limits is definitely appropriate and would have to be part of the deal in some way.
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Old 10-11-2016, 06:31 PM   #25
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Isn't that why tontines are illegal?

https://www.washingtonpost.com/news/...of-retirement/

I don't really get why WaPo has them as sleazy - everybody dies - but OP's idea sounds kinda tontine like and kinda like Aids patients selling the naming of their life insurance beneficiary for Cash! Now! back a decade or more ago.
Informative article, never heard of tontines. Does sound like a good idea for people with no heirs. Way better than annuities.
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Old 10-11-2016, 06:33 PM   #26
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I would use a different moniker before approaching anyone with the idea.
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Old 10-11-2016, 06:37 PM   #27
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Hypothetically speaking.............

How much money would a private investor give me now to become the sole heir of our (DW and I) estate when we pass?

Nothing if the investors have any sense. OTOH, if your house is easily marketable, someone might give you a heavily discounted payment and allow you a life interest. However, you can do this more or less with a reverse mortgage.

Anyway, you are just wasting time on a lazy afternoon, and have no intention of following up on this.

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Old 10-11-2016, 06:50 PM   #28
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I'll give you a dollar.
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Old 10-11-2016, 06:56 PM   #29
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Hypothetically speaking.............

How much money would a private investor give me now to become the sole heir of our (DW and I) estate when we pass?

This is similar to a third party buying a life insurance policy on your life.
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Old 10-11-2016, 07:09 PM   #30
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I would demand clauses like you may withdraw no more than X per year, and i would want a cash out schedule that i may exercise in the future to keep your death liquid for me. Also taxes would be a concern i would wish to mitigate somehow

All that said, i would consider it. But it is much simpler to just buy life insurance on you, isn't it?


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Old 10-11-2016, 07:19 PM   #31
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To answer the original question:yes, this is a crazy idea.

Remember Madame Jeanne Calment and Monsieur Raffray, who bought her apartment on a contingency contract when she was 90? She lived to be 122. He had long since departed this mortal coil.

http://www.nytimes.com/1997/08/05/wo...es-at-122.html
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Old 10-11-2016, 11:32 PM   #32
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This is similar to a third party buying a life insurance policy on your life.
Yes, Why not simply sell the rights to $1 Million life insurance policies , the investor pays the insurance costs each year and reaps the payout when you croak. You get to charge him a fee ~ $50,000 per million.

With this there is no limit to the number of rights/policies you could sell, given enough insurance companies and the possibility of selling multiple policies through 1 insurance company.
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Old 10-11-2016, 11:58 PM   #33
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Hypothetically speaking.............

How much money would a private investor give me now to become the sole heir of our (DW and I) estate when we pass?

...
That should be enough to get some discussion started. Look forward to hearing comments or questions needed to make a decision.
About the only thing I can think of that gets you anywhere close to your vision is to purchase your dream home with your $3MM in investments, then turn around and takeout a reverse mortgage and get either a lump-sum, or get monthly payments to your checking account for X years. About the only legal way I know of to get cash now to buy your 'dream home' (or other real estate), and then live off of it until you both die.

Only issue is running out of money, and/or one of you going into assisted living while the other lives at home - having the expense of upkeep of the residence AND the cost of the one spouse in assisted living. You couldn't sell the house without having to pay off the balance of the reverse mortgage. If you took out too much money initially when you did the reverse mortgage, you'd have zero (or very little) money leftover after selling the house. And you'd probably be spending all of your SS and other remaining funds just paying for the assisted living expenses, leaving virtually nothing for the surviving spouse to live off of.

Might be do-able, but would leave very thin margins for error or variability.
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Old 10-12-2016, 05:55 AM   #34
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How much money would a private investor give me now to become the sole heir of our (DW and I) estate when we pass?
Interesting question, reasonable simple answer in my view.

If you want to be able to spend more without fear of hitting zero, there is a ready made solution: a SPIA with inflation protection. Combine that with liability matching (including good health insurance that covers assisted living), a reverse mortgage when the time is right, and you're good to go.

You'll get bad deals though at your age. Better wait a bit.
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Old 10-12-2016, 06:01 AM   #35
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Sort of a reverse mortgage on your life?
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Old 10-12-2016, 06:12 AM   #36
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Put it in a trust. Have the trust pay a florist to put roses on your graves every day until the money runs out.
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Old 10-12-2016, 06:46 AM   #37
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Sort of a reverse mortgage on your life?
Sort of.

It's an impossible to translate concept, but in France (cf. the long-life example) you can sell your house to a third party. As a seller you have the right to stay in the house for as long as you live, and receive a monthly stipend. When seller dies, buyer gets the house.

Likewise in Belgium you can sell assets to someone, while you retain the usage rights "vruchtgebruik". In bad translation: you sell the 'naked asset'.

It's used often to lower inheritance taxes: parent gifts the 'naked asset' to their children, but retains the 'vruchtgebruik'. The 'naked asset' is worth less than the full property, so lower gift taxes.

It's pretty well regulated what one can or cannot do as the owner of the 'naked asset'. For example: you need to maintain the house and bear those costs, if it's capital you need to administer the capital as a prudent person etc ..
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Old 10-12-2016, 07:41 AM   #38
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Use some of your current nest egg and get his/her philanthropic bone transplants. Problem solved.
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Old 10-12-2016, 10:12 AM   #39
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I can give you $100K now to put my name on your will. I might wait 30 years to get it. And it might only be worth $500,000 by then instead of $3 Million


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