It’s interesting that the title of this article falls around the 2021 tax filing deadline. Whether you’re thinking about taxes or not, many seniors considering a transition to a senior living community get concerned if they can afford it. I know from my personal experience with my elderly parents, their primary concern is can they afford a senior living community and that they don’t run out of money.
Depending on the level of care needed, the senior living communities costs are a personal expense, an out of pocket expense for seniors. These levels include independent living (IL), assisted living (AL), personal care (PC) and memory care (MC). It’s only when skilled nursing care (24/7) is needed is when other programs like Medicare and Medicaid may be available to help cover costs.
As a Seniors Real Estate Specialist, many of my senior clients own a home and are either mortgage free or have a small line of credit on the home. The home and its equity asset is a big part of their portfolio even though they may be on a fixed income. This is a good thing they have no or very little mortgage but they feel limited because of their fixed income cash flow. So what can be done to help improve the seniors cash flow to help with their transition to senior living until the family home is sold.
The first thing might be is to secure a Bridge Loan. This is a different type of loan because it’s much easier to secure and requires much less time. The Bridge Loan is a loan amount against the equity in the home. There are companies that specialize in these loans which allows the senior to free up cash for their transitioning expenses to senior living or even if they need some extra dollars for getting the house ready to sell. The Bridge Loan is paid off when the family home is sold. The Bridge Loan is NOT a reverse mortgage loan.
I recommend to all my clients before they take out a Bridge Loan, make sure they understand all their other potential incomes sources (social security, pensions, IRA’s, stocks, etc) that can be used for senior living expenses. There may be other income benefits like long term care policies, Veterans Aid & Attendance or Medicaid as mentioned earlier. Elder Law Attorneys are experts at helping seniors access these potential benefits. The Elder Law Attorney can help the senior client protect and stretch their assets for their long term care needs.
In summary, many seniors get an initial “sticker shock” feeling when considering senior living communities. Once they and their families learn more about the other potential income sources, the sticker shock seems to fade quickly. The Bridge Loan is a quick and easy way to secure some up-front cash to help with the senior’s transition to a senior living community.
Kent Lee, SRES
Seniors Real Estate Specialist
Homepage Realty
(C) 502-649-5921
kyseniorliving.com