Who Took My Inheritance ?: parents spend with reverse mortgages

Are reverse mortgages a good part of Florida estate plans or merely a credit card disguised  as a valuable asset ?  As reverse mortgages increase in popularity, heirs and adult children are finding less of an inheritance and less value in their parent’s Florida real estate.  Are parents spending your inheritance ?  How dare they.

Parents Put Debt on Florida Homestead

Forget the Florida real estate crash or recovery.  Your parents are spending your inheritance.  That once “given” property right: to inherit your parents’ house, may not be so clear cut anymore.  You may be dealing with a lender or bank when your folks die and you administer their Palm Beach probate.

People are putting debt on their homes and then drawing against those credit lines or “reverse mortgages” to use that money to live on.   Banks and lenders are loaning money to Florida homeowners with equity in their home:  here, take the money, we’ll get it back when you die.

Don’t take my word, the New York Times just wrote about it:  Here’s a link on Yahoo’s finance page ( I could not find the article on the NY Times website):

http://finance.yahoo.com/news/pitfalls-reverse-mortgages-may-pass-235750883.html

What Inheritance ?

Lenders are selling access to capital to aging Florida residents who are realizing that they get cash flow and money to blow from borrowing against their assets like their home.

That leaves heirs and family members — especially those who believe that they are entitled to an inheritance —  with a diminished Palm Beach estate to inherit .

One answer to get access to capital and also leave your kids or heirs at law a Florida inheritance?  Life insurance.  Buy life insurance for each child or heir.  That’s their inheritance.  You do whatever you want with any other assets you get.  Some insurance can be paid up early.