Carol Elevitch spoke briefly about Reverse Mortgages, Virginia MacCauley talked about the legal steps she was advised to take when her husband became ill, and Alice Gerard described how she placed her mother on Medicaid after nursing home expenses used up most of her money. Following them, Palisades resident David Englander, an attorney who practices in Tappan, gave general legal advice and answered questions.

A Reverse Mortgage pays you a monthly fee in exchange for some of the equity in your house. Nothing has to be paid back until your house is sold, making this option very helpful for people who own a house but need more income. Carol Elevitch learned a number of useful things while researching Reverse Mortgages. The most important thing was that you must deal with a bank that has FHA or HUD insurance.

To apply for the mortgage, you must be at least 62 years old and live in your own home. You begin by choosing a bank and having a telephone consultation with someone there. Then a bank officer will come to you to discuss your options. It’s a good idea to have a family member, friend or lawyer with you during this discussion.

The bank will have an appraisal done, and then tell you what repairs need to be done to the house before you can get the mortgage; for example, a new coat of paint on the house. You have up to 6 months to do the necessary work, at your expense, before you can close the deal. There are other fees, as well as the cost of the appraisal; the total amount can be as high as $18,000.

Once you have met all the conditions, you can begin to receive up to 80% of the appraised value of the house (but not more than $417,000) in payments over a period of time. The money is tax free and you can use it for anything you want. The interest you pay on this mortgage is about 5.4%

Virginia MacCauley pointed out how important it is for spouses to have made a will and for each to have a power of attorney for the other partner. Other important documents are a power of attorney for health care and/or a health care proxy that enables one partner to make health decisions for the other in case of severe illness.

Alice Gerard explained that her mother, who did not have Long-Term Care Insurance, had given away most of her assets three years before she went to a nursing home and was thus eligible for Medicaid when her money ran out. If you have Long-Term Care Insurance, the insurance will pay a large part of nursing home costs but the insurance is very expensive unless one buys it when one is in one’s fifties or sixties.

Giving away one's assets has to be completed at least three years before one can apply for Medicaid. Thomas O'Connell, a local attorney with extensive experience with elder law, sent us a clarification on this issue. He wrote, " An application made today would only require a three year lookback of financial statements. Thus a transfer in Nov. of 2005 would not be subject to a three look back for a January 2009 application.. It will take three years from February 8, 2006 before the increased lookback period will require the full five years of statements. The increased lookback will be phased in over a two year period (i.e., beginning in March 2009, 37 months of statements will be requested, in April 2009, 38 months of statements ,etc.). It will take until February 8, 2011, before a full five years will be requested on transfers made on or after February 8, 2006. Pre February 8, 2006 transfers will thus only require a 36 month look back period."

The issue is a complicated one. If you want to consult Thomas F. O'Connell, you can reach him at 144 E. Central Ave, Pearl River , NY 1 0965.

David Englander, who answered questions at the end of the meeting, stressed that consultation with an attorney can be very helpful when making these difficult decisions. In some cases an attorney who specializes in certain areas is needed, but the place to begin is with your own attorney who can steer you to the right person.

Please call Alice Gerard (359-4338) if you have questions about anything in this article.