Can I Benefit from a Reverse Mortgage?

It seems that we can’t turn on the television or radio without hearing an ad for a “reverse mortgage.” So what is a reverse mortgage exactly, and who can benefit from using one?

A reverse mortgage is a type of loan taken out against your home. With a reverse mortgage (as with a traditional mortgage) you are borrowing against your home equity which is the difference between your home’s market value and the amount you owe on your mortgage. The difference in a reverse mortgage is that you do not have to pay it back while you are alive. Instead, the loan is paid off after you pass away.

What Are Some of the Benefits of a Reverse Mortgage?

Reverse mortgages can be a fantastic tool, depending on your goals. They can provide additional income and improve your cash flow, particularly if you have already paid off your home. Here are some reasons to consider a reverse mortgage:

  • They can help you maintain your financial independence by providing additional income;
  • They can allow you to stay in your home until you die;
  • For most people, the risk of default is low; and
  • They are not taxed.
  • One of the best things about a reverse mortgage is that the amount paid back will not exceed your home’s value.

What Are Some of the Disadvantages of a Reverse Mortgage?

As with any financial tool, reverse mortgages are not for everyone or every situation. Before you decide to take out a reverse mortgage on your home, you should consider the following potential disadvantages:

  • Interest costs are higher because you are making no payments;
  • The amount paid back after your death will cut into the estate left for your family or heirs; and
  • Because they are based on a formula, the amount you can borrow is lower than with traditional home equity loans.

Reverse mortgages can also be complicated and rather difficult to understand. The bottom line is this: A reverse mortgage is one financial tool you can use to achieve your goals. However, before you commit to a large loan, you should make sure you understand all aspects of the loan. If you are not sure whether or not a reverse mortgage is right for you, talk with a trusted financial adviser or attorney.

Pets in Your Will

I spent a part of the weekend at my parent’s home, and for those of you that don’t know my parents live out in the middle of nowhere and have an excessive amount of animals and pets. Growing up we always had, at a minimum, 7 dogs running around the property. At the moment my parents only have 6 dogs, but they make up for their lack of dogs with 5 horses and a cat that refuses to leave the guest room closet. Most people consider their pets to be a significant part of the family, and if it matters to you then it makes sense to put in place some planning mechanisms to ensure that your pets are taken care of should anything happen to you.

For those of us who have pets that would be left behind after we die, there may be a desire to make arrangements for their well-being. Making provisions for pets in your will can only be done through the establishment of a trust. Pets are considered property and, as such, cannot be left money or property directly.

A trust is an entity that is established to receive and hold money and property for the benefit of designated beneficiaries which can be people, pets, organizations or other entities. There are two trust options for pet care.

Traditional Trust

With a traditional trust, you name a trustee to administer the money, and also appoint a caregiver for your pet. In your will, you designate money or property to be received by the trust. If life insurance proceeds are to be used, you would designate the trust as the beneficiary of the policy. Remember, you can divide up life insurance proceeds between multiple beneficiaries in the event you have other people or organizations you want to benefit.

Statutory Trust

A statutory trust can be specified within your will. It is a statement that indicates you are leaving money or property “in trust” to your pet. In this situation, however, the probate court is then responsible for appointing persons to serve as trustee and caregiver.

Another Option

A pet protection agreement is a less formal option for providing for your pet. This is a simple agreement with another person to care for your pet after your passing. This could also be used in cases of incapacitation, just as you would execute a power of attorney for other affairs. This option makes sense if, for example, your pet’s life expectancy was limited, and not much money is in consideration.

Additional Tips

Trusts for pets can be easy to establish, but there are some things to consider, such as the following:

  • They make the most sense for animals with longer life spans such as horses and birds;
  • There is usually no need to leave an excessive amount of money;
  • Name a successor beneficiary for funds left after your pet dies, preferably not the caregiver;
  • Ensure the willingness of the trustee and caregiver to serve in those roles;
  • Name successors for the trustee and caregiver;
  • Do not make the trustee and caregiver the same person; and
  • Provide detailed instructions of your wishes for the care of your pet.

This article is a service of Tyler S. Hinz, Personal Family Lawyer®. We believe in developing trusting relationships with families for life.  If you’d like to ensure your family stays out of Court and out of conflict if and when something happens to you, Call our office today at (800) 979-6170 to schedule a Family Wealth Planning Session, during which we can review your wishes.|

Town Demolishes House While Owner Is in Hospital

Imagine this: your elderly uncle with no family near his home travels South to Florida for surgery and has to stay there unexpectedly for a number of months. While he is away, his home is demolished by the city, including all of his possessions.

This just happened to a 69 year-old veteran and home owner in West Hemstead, New York. Due to medical complications with his surgery, he was unexpectedly gone for a number of months.

When he returned home, he found that his home had been torn down by the city. He had lived in the house since infancy and all of his possessions had become part of the rubble. Neighbors had complained about the condition of the house and claimed they thought that no one lived there.

Owners of homes or other structures that have become dilapidated need to be aware of laws that permit municipalities to take action against them. Typically, towns and cities have building codes and standards which must be met, and they have inspectors with the authority to declare properties unfit for use.

These cases start when the city declares an abandoned house or building structurally unsound and orders that it be demolished. The city will first look to the property owner to carry out the demolition, but if that does not happen, the city undertakes the task itself and then demands payment of demolition costs from the owner.

While avoiding the destruction of someone’s home should be a goal of government officials charged with enforcement of building codes or urban renewal programs, that is obviously not always the case. It is up to each of us to care for our family members, especially those who are elderly and do not have close family nearby. One of the best ways you can do that is to ensure all of your senior family members have a relationship with a trusted advisor, such as a personal lawyer, to ensure that all of their assets are protected in the event of a long-term incapacity or illness.

Legal Strategies to Avoid Guardianship

As senior citizens continue to age, the likelihood increases that they will become physically or mentally incapacitated. Hopefully, people in such a situation have family members who step in and help keep their affairs in order. That is not always the case, however. If no one steps in to help, courts may be petitioned to appoint someone–a guardian–to look after that person’s very existence. This often happens when a person becomes incapacitated by illness and cannot make decisions.

What Can I Do?

For medical situations, a medical power of attorney – a document that identifies a person of your choosing (your agent) to make decisions for you in the event of your incapacity – should be executed. Your agent can be family member or friend. The key is to make sure it is someone you trust.

A power of attorney can also be used to appoint someone to deal with non-medical issues. This document can be set up to either take effect immediately, or only at such time as you are unable to make your own decisions. The former is known as a “durable” power of attorney, while the latter is a “springing” power of attorney. The durable power of attorney is the more effective of the two in that it requires no consideration of whether a person lacks the capacity to make decisions.

Also, consider setting up a trust to administer your assets as you age. Unlike a power of attorney, with a trust, the trustee has sole control of your assets. And there are further legal steps you can take, such as establishing a limited liability corporation or a family limited partnership to manage your assets.

All of these processes will prevent the need for a court to appoint a guardian for you if you become incapable of managing your own affairs. Those of us who are in our senior years should recognize the increasing chance of the need for someone else to make decisions. And those of us who have elderly parents or loved ones should help them think about these issues. The time to plan for potential incapacity is now. Once someone becomes incapacitated, it’s simply too late.


This article is a service of Tyler S. Hinz Personal Family Lawyer®.  One of the main objectives of our law practice is to keep families out of court and out of conflict through thoughtful estate planning. That’s why we offer a Family Wealth Planning Session,™ where we help you be proactive in avoiding guardianship and appointing people you trust to take care of you and your affairs if you later become unable to do so.  Call our office today to schedule a time for us to sit down and identify the best strategies for you and your family.


Watch Out for Predatory Tax Liens on Your Family Home

As our parents and other loved ones age, they may need a little more attention from us. Parents, grandparents, aunts and uncles, or even neighbors who are aging may want to be seen as strong and independent. Often, however, their abilities to take care of household and financial affairs begin to erode as they get older.

What’s at Risk?

One such example which can have catastrophic consequences is the failure to pay property taxes. A lot of retired people struggle to make ends meet and may not be able to pay their taxes as they come due. This puts their home at risk because unfortunately, governments have processes in place to collect back taxes by placing liens against the property.

Worst Case Scenario

Different locales have different approaches to filing liens against property, but one place where it has become predatory is Washington, D.C. There, the city made a policy change in 2001 that has had devastating effects on homeowners. Prior to that time, the city would sell a lien at auction to individuals who could then charge interest on the amount due until it was paid. If it was not paid, the city could move to foreclose on the property.

The change in 2001 allowed the purchasers of the liens to go directly to court to foreclose on the property they purchased. This attracted predatory lenders from other states that became very aggressive in pursuing the foreclosures. In many cases, people who owned their homes free and clear lost them over unpaid taxes of less than $500. Once the investors buy the liens, they can begin charging interest and legal costs, which often causes the homeowner to be less likely to be able to pay off the lien.

It is true that homeowners have ample time and notice to pay the taxes, even after the liens are sold, but Washington’s story is replete with cases of owners with dementia and other serious illnesses. Because of these types of conditions, many owners were not aware of or did not understand exactly what was happening. And without family or friends looking out for them, the predators can have a field day.

Thankfully, Washington is in the minority of governments that allow this predatory approach to tax collection, but your loved ones could still be at risk. Those of us with elderly family members and friends need to pay attention to ensure they stay on top of financial matters. Respect their pride, but make sure they get the help they need so they are not taken advantage of. If you have an elderly loved one you want to ensure has the support and protection he or she needs, contact us. We can help.

This article is a service of Tyler S. Hinz, Personal Family Lawyer®.  One of the main objectives of our law practice is to keep families out of court and out of conflict. Our office can help you protect those you love using a Family Wealth Planning Session. Call our office today. We’ll help you identify the best strategies for you and your family.

Planning for Charitable Giving

January 1 wipes the slate clean for your tax deductible charitable contributions. That might be a good time to reassess your approach to donating to charities. Most of us respond to some of the appeals which come through various avenues such as unsolicited phone calls, campaigns at work, or church related charities. Whatever the source of the appeal may be, however, most people are inconsistent givers and fret when finding a way to say no.

A Better Way

A solution to the dilemma when to give and when not to, is having a plan in advance. Knowing ahead of time how much you are willing to contribute to charities and those specific charities to which you will give makes it easier to deal with those groups not on your “list”. Hard-charging solicitors are more likely to back off when informed that you have a charitable giving plan to which you strictly adhere. To begin creating your own personal charitable giving plan, first look at your past giving patterns and amounts. Did you take an itemized deduction? If yes, you can start with that amount and decide whether it is too high or too low. Many people do not keep track of all they have given, and some may even overstate the amount. Whatever the case, decide on an amount you want to give and then make a list of the organizations to which you will donate. Once you identify the recipients, you can decide how and when you want to make your contributions. If cash flow is an issue, you might set up a schedule for contributions. Consultation with the charity may provide some knowledge of what works best for that organization.

An Even More Coordinated Approach

If you want to provide a one-time outlay that gets your charitable funds set aside, a donor-advised fund can be established through a financial services firm. This way, a contribution to the fund can be made and then disbursed at later dates. The tax deduction is based on the contribution to the fund rather than to individual organizations. This also allows other family members to contribute if they would like to simplify their charitable gift-giving, too. A plan for charitable giving that specifies an amount and the recipients, in advance, takes away the angst of considering numerous solicitations that come randomly throughout the year. Knowing you have an action plan in place makes it that much easier to either ignore solicitations or provide a standard response.

This article is a service of Tyler S. Hinz, Personal Family Lawyer®.  We believe in developing trusting relationships with families for life. That’s why we offer a Family Wealth Planning Session, ™ where we can help identify the best financial strategies for you and your family. You can begin by calling our office today to schedule a time to identify the best strategies for you and your family.

Mark Zuckerberg Did Not Pledge 99% of His Facebook Stock to Charity 

By now you’ve heard that Mark Zuckerberg and Priscilla Chan are donating 99 percent of their Facebook shares — currently worth more than $45 billion — to charity, or at least that’s how the story has been reported. Yet that is not what they did at all. (And it’s quite surprising that respected publications like the New York Times and Forbes would get it so wrong with both publications touting Zuckerberg and Chan for their hefty “donation to charity.”)

There’s no charity happening here. And there’s nothing that says Mark and Priscilla are donating 99% of their Facebook stock to charity, ever. To a mission, yes. But to a charity? No.

In an open letter to their daughter, Mark and Priscilla said they would give away 99% of their FB stock over their lifetime to advance the mission of the Chan Zuckerberg Initiative LLC.


As you begin the next generation of the Chan Zuckerberg family, we also begin the Chan Zuckerberg Initiative to join people across the world to advance human potential and promote equality for all children in the next generation. Our initial areas of focus will be personalized learning, curing disease, connecting people and building strong communities.

We will give 99% of our Facebook shares — currently about $45 billion — during our lives to advance this mission.

An SEC filing on the same day said that Zuckerberg would sell or gift no more than $1B of FB stock each year for the next three years.

On December 1, 2015, our Founder, Chairman and CEO, Mark Zuckerberg, announced that, during his lifetime, he will gift or otherwise direct substantially all of his shares of Facebook stock, or the net after-tax proceeds from sales of such shares, to further the mission of advancing human potential and promoting equality by means of philanthropic, public advocacy, and other activities for the public good. For this purpose, Mr. Zuckerberg has established a new entity, the Chan Zuckerberg Initiative, LLC, and he will control the voting and disposition of any shares held by such entity. He has informed us that he plans to sell or gift no more than $1 billion of Facebook stock each year for the next three years and that he intends to retain his majority voting position in our stock for the foreseeable future.

Somehow, the media read these two events as Zuckerberg giving 99% of his FB stock to charity, but that’s not what’s happening. Still, It does appear that Mark and Priscilla have the best intentions, even if they are not receiving the best advice. They want to put their Facebook fortune to work solving the two world problems they deem most important — advancing human potential and promoting equality.

But they have not given away their money at this time; they “might” sell or gift up to $3 billion of Facebook stock over the next three years to do it. But they have not legally obligated themselves to do that.

Many have claimed that they did it for tax purposes, but the reality is that the structure Zuckerberg and Chan used won’t provide any tax benefits at all, unless and until the LLC donates Facebook shares to charity later on.

So, what could Mark and Priscilla have done instead?

According to nationally-known estate and asset protection attorney, Steve Oshins:

“They should create different types of asset protection trusts. What if there was a class action against them for violating a billion people’s privacy rights, for example?”

In a case like that, Zuckerberg and Chan could lose everything, including the assets of the Chan Zuckerberg Initiative, which do not appear to have been structured with any asset protection in mind.

Or, what if Mark and Priscilla die young, unexpectedly and everything goes outright to their child? Once she turns 18, the initiative and all the money in it plus all of their other assets would be hers, without restriction, and would not be protected from lawsuits, divorce or a future bankruptcy. Everything they’ve worked so hard to create could be lost.

Ideally, Zuckerberg and Chan would have a trusted adviser to guide them in understanding how best to structure their resources for maximum impact as well as to educate future generations to keep growing the assets and maintain their positive contribution to the world, rather than squandering them as many children of the ultra-wealthy do. Every culture has the saying akin to “shirtsleeves to shirtsleeves in three generations”, or “clogs to clogs in three generations”, and so on .. ” and there’s a good reason why.

Oshins said “Many of these young billionaires don’t have top estate planning and creditor protection attorneys. That is why we often see them lacking these types of vehicles.” i.e. vehicles that maximize asset protection and the wise stewardship of money. While the young wealth creators of Silicon Valley clearly desire to make an impact on global issues, they may not be thinking long term enough. Using business lawyers to structure matters of family wealth is a common error and may mean their resources are not used in a wise manner to achieve their mission beyond their lifetimes.

While Mark and Priscilla can use the Chan Zuckerberg Initiative as a vehicle for educating their daughter about how best to use the resources that will be at her disposal, the questions becomes whether they themselves will they get the guidance they need to do that?

With proper insight Mark and Priscilla have the potential to structure their assets in trusts that can educate not just their daughter, but future generations as well, to not only preserve the family wealth, but to also invest it in the future Mark and Priscilla aspire to create. If not, there’s a chance that their wealth could ultimately go the way of the Vanderbilt family fortune, gone within 200 years, lost to poor investments, weak philanthropy, and aggressive partying.

Two hundred years may seem like too long of a game to consider, but in the context of our lives on this planet, it’s the blink of an eye. Would Cornelius and Billy Vanderbilt, the first two generations who created the Vanderbilt fortune, have done something different had they known how much would be wasted by their progeny?

For many people, it makes sense to consider the long term effects of your wealth and resources. While Zuckerberg and Chan talk in their letter to their daughter about making long term investments over 25, 50 or 100 years, they might consider looking even farther out to 200, 500 or even 1,000 years. It would be catastrophic to have $45 billion squandered in this generation or two simply as a result of poor planning, management and education. If this wealth or any amount of wealth is to have a lasting influence then people must actively plan now to ensure an edifying future.

Divorce After 50: Common Mistakes That Can Ruin Retirement

Beyond the emotional impact that divorce can have on couples of any age that decide to split, it can have a potentially devastating effect on the retirement plans of those who divorce later in life. Divorce after 50 usually results in a loss of income for both parties, which can mean working longer to fund a single retirement.

An article put out by from a couple years ago pointed out some common mistakes made by those over 50 who are divorcing that can ruin retirement plans:

Choosing the house over other assets. For many people, choosing the family home in a divorce is more of an emotional than a rational choice. If the housing bust of the last few years has taught us anything, it’s that you can’t count on a house as a nest egg. Plus, a house is likely to cost you more as well in property taxes, maintenance and unexpected expenses like a roof or furnace replacement. So don’t automatically sacrifice retirement assets for a house until you weigh the costs.

Forgetting to consider the tax implications of retirement assets. If you decide to divvy up retirement savings by one of you taking the 401(k) and the other taking the Roth IRA, you need to realize that these are not equal distributions. Withdrawals from a 401(k) or traditional IRA will be taxed during retirement, while withdrawals from a Roth IRA are not taxed during retirement. Therefore, the payout from the Roth IRA will be larger over time.

Rolling over a spouse’s retirement account into an IRA after the divorce. If you are under the age of 59 1/2 at the time of your divorce, you have a one-time opportunity to withdraw money from an ex-spouse’s 401(k) or 403(b) without having to pay the 10 percent early withdrawal penalty as long as those funds have been allocated to you under a qualified domestic relations order (QDRO). If you do a rollover and need to tap the account early, you will have to pay the tax penalty. And while it may be tempting to dip into retirement savings now, remember that you are eroding the nest egg that needs to last you for 20-30 years in retirement.

If you would like to have a talk about retirement planning, call our office today to schedule a time for us to sit down and talk.

Why DIY Estate Planning is a Bad Idea

America is a nation of do-it-yourselfers, but building a deck and creating a legally valid estate plan are two entirely different things – and a less-than-perfect deck won’t devastate your family’s financial future or the relationships among the people you care about most.

The prevalence of online legal services has led many people to believe that they can create legal documents cheaply and those documents will be just as effective as if they had visited an estate planning attorney. And this is why that is wrong:

No legal advice – these sites are little more than document mills that churn out the same generic forms over and over. They are not attorneys and cannot advise or warn you if you make a mistake. Plus, who will be there for your family when something happens to you if you’ve used an online document drafting service? Think your family doesn’t need an advisor to support them when you are gone? Think again.

Consider this: Erica’s father was killed in a motorcycle accident. Dad didn’t leave much behind, but he did leave an estate plan prepared by a trusted family attorney. Had the family attorney not been there for Erica and her brother, they would have taken what dad did leave and drowned their sorrows in a European backpacking trip. Thanks to this family attorney, though, Erica and her brother now have a healthy trust fund set up for them for life with the proceeds of a successful wrongful death case. Leaving it to your family to know what to do after you’re gone is a big
mistake for the people you love.

One size doesn’t fit all – your family is different from everyone else’s family. Just like every state has different inheritance laws, every family has different situations. An online form will not help you protect a special needs child or relative, or protect a child’s inheritance from creditors or a nasty divorce. An online form cannot tell you how to protect assets from taxes or help you achieve your goals.

It’s also important to keep in mind that an online form cannot keep your family out of conflict during a time of grief. Even if you’re not leaving behind many assets, whatever you do have will be subject to distribution between the people you care most about. Some of the biggest disagreements aren’t about loads of money, but about the little things and those little things aren’t going to be dealt with well with form documents.

Save now, pay later – you may think you are saving money by using an online service to create your will or trust, but it is impossible to make a fair comparison since the services provided are entirely different.

An estate planning attorney creates an entire plan tailored to your individual needs in a legal document that will stand up in court, and advises you on ways to cut taxes and save for retirement and long-term care. No online service does that.

In addition, your trusted adviser is going to be there for your family when you cannot be. The people you love will need someone to turn to after you are gone. Do you want them to be stuck figuring out who that should be during their time of grief? Or do you want to leave behind the gift of having taken care of things well during your lifetime and a trusted adviser to hold their hand when you no longer can?

We invite you to take advantage of our specialized legal services for families with a Family Wealth Planning Session. Call our office today to schedule a time for us to sit down and talk about designing an estate plan that fits the needs of you and your family.


We know that no one likes to think about death, especially their own. Which is why many people procrastinate when it comes to estate planning. Because it’s for when you die, right? Wrong! When done with a Personal Family Lawyer, creating an estate plan makes your life better. Here are some of the things that estate planning does for you while you are

  • Gets you thinking about the real meaning of your life, what you want to pass on beyond your life and what’s most important to you to do now;
  • Gets you thinking about how you want to be cared for at the end of your life and lets you name someone to make those good decisions for you;
  • Has you think about your money, who you want it to go to, how you want it handled, what you want it to do in the world after you aren’t here;
  • Names someone to care for your children in case you can’t;
  • Helps you minimize taxes;
  • Lets you provide for a special needs child or other loved one without disrupting their governmental benefits;
  • Protects your assets from divorce – yours or your children’s – as well as lawsuits and creditors;
  • Enables you to gift portions of your estate to your children or charities while you are still alive in a tax-advantaged way that inspires wealth creation instead of depletion;
  • Helps you plan for your own long-term care in a way that won’t deplete your estate

Of course, having an estate plan also offers you peace of mind that you have done what you could to protect loved ones and pass on your assets efficiently after death. Having an estate plan in place before you pass guarantees that:

  • Your personal property and assets will pass to the people you want to have them
  • You spare your family the expense and pain of having to go through the probate process
  • Your minor children are provided for in the way you choose, with a guardian named to raise them with your values and a trusted adviser in place to manage their finances until they come of age
  • Your assets are protected for your heirs by setting up a trust with a distribution option for when they reach adulthood (or other milestones of your choice)
  • Beneficiaries have been named for retirement and other financial accounts as well as life insurance policies so the assets in these accounts go to the people you choose
  • The financial privacy of your family is protected

If you haven’t already, take the time to consider the many benefits of completing your estate plan. A well-crafted estate plan is more than just a stack of legal documents, it spells out how you will pass on your values, beliefs and your money to the people you love. Contact our office to schedule a time for us to sit down and talk and discover the many benefits of having your estate plan in place sooner rather than later.