Book A book icon Megaphone A megaphone icon Chat A chat bubble Calendar A calendar symbol Calendar alternative A calendar symbol Menu A menu symbol for navigation print A computer printer symbol Location A map location marker Location alternative A map location marker Phone A phone symbol User A human silhouette indicating login Document A document symbol Facebook Facebook social media icon Facebook Facebook social media icon Twitter Twitter social media icon Twitter circled Twitter social media icon YouTube YouTube social media icon YouTube YouTube social media icon YouTube Play icon YouTube social media icon Vimeo Vimeo social media icon Vimeo circled Vimeo social media icon LinkedIn LinkedIn social media icon LinkedIn circled LinkedIn social media icon Instagram Instagram social media icon Instagram circled Instagram social media icon Pinterest Pinterest social media icon Pinterest circled Pinterest social media icon Mobile A mobile phone Tablet A tablet symbol Laptop A laptop computer symbol Desktop A desktop computer display Pencil A pencil symbol Ok A checkmark symbol cancel-circle A X symbol Plus An addition symbol Minus A subtraction symbol Heart A heart symbol Star A star symbol Videocam A video camera symbol Caret A small triangle symbol Newspaper A newspaper symbol Cart A shopping cart Tools A hammer and a wrench symbol Flag A flag symbol home home-desc Photo A photograph symbol Audio A speaker with sound symbol Cog A group of cogs symbol RSS A RSS feed symbol Comment A speech bubble symbol Link A chain link symbol Export An export arrow symbol Envelope An envelope symbol Search A magnifying glass symbol Info An information symbol Info circled An information symbol Help circled A question mark symbol Clock A clock symbol Globe A globe symbol Globe alternative A globe symbol none none

Should I have a trust if I have a reverse mortgage?

I just discussed the issue of reverse mortgages with a client. She has a $425K home with a $325K RM and assumed she did not need a trust. 

I explained that for her heirs to receive the equity in her home after she passed away the house would have to be sold within 6 months to pay off the RM.

If the house is in trust this could be done quickly by the trustee. If no trust then off to probate court to secure a court order to permit the sale.  Since probate can take a minimum of 6 months, the reverse mortgage company will be forced to start foreclosure proceedings before that time.  I faced this footrace several times with heirs and the reverse mortgage companies can ring up some hefty pre-foreclosures fees that will come right out of the equity in the home.

Bottom line was probate would cost her estate $13,100 -- $11,500 in lawyers fees and $1,600 in costs.

She choose to do a trust and saved her heirs this unnecessary expense and delays of the probate process.
Blog post currently doesn't have any comments.