Articles Posted in Estate Administration

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Reverse mortgages can be a great financial tool for retirees or others living on a fixed income. A reverse mortgage can be used to pay off an existing home loan, gain freedom from a house payment and/or provide a retirement income source. The homeowner must still pay real estate taxes and homeowner’s insurance but otherwise no payments are due on a reverse mortgage until the borrower spouses both die. Then the loan comes all due and must be paid in full by refinancing, the use of other estate assets or by a sale of the home.

But what happens when the reverse mortgage is taken out by only one spouse?   If the surviving spouse is not also a borrower, he or she may need to sell or refinance the house when the borrower spouse dies. Refinancing is not usually an option for a surviving spouse so the family home would need to be sold at, perhaps, the worst possible time.   At least that was the situation until the advent of an FHA program called Mortgagee Optional Election (MOE).

The MOE program can enable a surviving spouse who was not a reverse mortgage borrower to remain in the family home after the borrowing spouse dies.   But inclusion in this program is not automatic. The surviving spouse needs to contact the mortgage servicer to request an MOE assignment. Certain conditions also apply:

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Congratulations! Being appointed as a Personal Representative or Executor under a Will is an honor. The Testator considered you capable and honest and has entrusted his or her estate to you. Your job is to assemble assets, pay debts and make sure the Testator’s wishes as expressed in the Will are followed. Along with the honor comes a lot of work and some risk. If you make mistakes, or even if you do the right things but do not do them quickly enough, you run the risk of being sued and surcharged for any loss that the estate may have incurred.

Here are some things you need to know to minimize your risk.

  1. The primary duty you owe, as an estate’s Personal Representative, is loyalty to the estate and its beneficiaries.   Every action taken must be for the benefit of these individuals. As Personal Representative you are entitled to reasonable compensation for the work that you do on behalf of the estate. However, you are not allowed to profit personally in any dealings with the estate. You must avoid even the appearance of such a conflict of interest.