Helping Parents and Grandparents with Harlan Accola

Jul 30, 2024

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“A good man leaves an inheritance to his children's children, but the sinner's wealth is laid up for the righteous.” - Proverbs 13:22

We’re all familiar with that verse, but do we fully understand its meaning? Is it only about money? I’ll talk about that with Harlan Accola today.

Harlan Accola is the National Reverse Mortgage Director at Movement Mortgage, an underwriter of Faith and Finance. He is also the author of Home Equity and Reverse Mortgages: The Cinderella of the Baby Boomer Retirement.

The Misconception of Leaving a Financial Inheritance

As Christians, we often forget that the most important legacy we can pass on is our faith and wisdom, especially financial wisdom, to help our children avoid mistakes we’ve made. Much like other private topics, money management is rarely discussed but is critically important.

Many people believe they must leave a financial inheritance, particularly their home, to their children, stemming from historical practices of passing down farms or businesses. This belief often leads the elderly to sacrifice their own comfort. However, assets, including homes, should be viewed like any other possession. It's unfortunate that some elderly individuals avoid reverse mortgages and live in poverty to preserve their homes for their heirs, driven by fears that this approach might be unbiblical or might upset their children.

Starting the Conversation Early

The solution to these issues is early and open conversation. Often, parents are private and embarrassed about their financial struggles. Children can initiate these discussions, reassuring their parents that it’s not about the inheritance but their well-being. Most children wouldn’t want their parents to forego basic necessities or bucket list vacations for a larger inheritance. They appreciate their parents' hard work and want them to enjoy the fruits of their labor.

For adult children wanting to start this conversation with their parents, Harlan suggests using examples from family and friends who faced long-term care issues or probate messes to discuss their own family's plans. It's crucial to make clear that the motivation is not about receiving an inheritance but about ensuring the parents' comfort and security. Clear instructions from parents can prevent family conflicts later on.

Mechanics of a Reverse Mortgage

Regarding reverse mortgages, it’s important to note that homes will continue to appreciate, often leaving equity for heirs. It is generally better to give with a warm hand or leave behind assets like Roth IRAs and life insurance proceeds instead of a home. Additionally, heirs might be able to deduct unpaid interest and mortgage insurance, potentially erasing significant tax liabilities.

If you’re looking for a mortgage solution or have questions about whether a reverse mortgage is right for you, you can contact Movement Mortgage at movement.com/faith.

On Today’s Program, Rob Answers Listener Questions:

My husband's wallet has been lost, and his social security card was in it. I'm wondering if we've done everything we should to protect ourselves or if there's something else we could do. We've already canceled our credit card.

Resources Mentioned:

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