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We have office hours in Arlington Heights,

Chicago, Skokie, and Westchester.


The attorneys at Dutton & Casey are now offering appointments in Westchester.


Conveniently located near the intersection of 294 (Tri-State) and 22nd Street (Cermak), we are easily accessible for clients in western and southern parts of Cook County and DuPage County.


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The government has tightened the rules regarding reverse mortage reverse mortgages, making it harder for some seniors to get these types of mortgages and reducing the amount of their home's value that they can tap. The new rules are an effort to strengthen the federal Home Equity Conversion Mortgage (HECM) program, which insures almost all reverse mortgages and which has seen default rates rise.


A reverse mortgage allows a homeowner who is at least 62 years old to use the equity in his or her home to obtain a loan that does not have to be repaid until the homeowner moves, sells, or dies. In a reverse mortgage, the homeowner receives a sum of money from the lender, usually a bank, based largely on the value of the house, the age of the borrower, and current interest rates. Seniors sometimes use the loans to pay for long-term care.


The loans are expensive and controversial. In recent years, there have been complaints over problems with reverse mortgages, including large costs, aggressive marketing techniques, and the danger of default if insurance and property taxes aren't paid on time. Encouraged by lenders, more homeowners withdrew the entire loan amount all at once, straining the HECM program's reserve funds.


The government began addressing these problems last year by eliminating one of the most popular types of reverse mortgage, the HECM Standard fixed-rate, lump-sum reverse mortgage. The new rules make changes to who can take out loans, the amount they borrow, and the pricing:

  • Who can borrow money? Borrowers are now required to undergo a financial assessment to ensure they can make insurance and property tax payments. If a lender determines you are a risk to default on insurance or tax payments, you may be required to set aside money to make those payments.
  • Amount you can borrow? Before the new rules, homeowners had the choice of two programs: HECM standard, which allowed for higher loans, and HECM saver, which had smaller loans and smaller fees. The government has merged these two programs, and the new maximum loan amount is about 10-15 percent less than in the standard, but slightly higher than in the saver.
  • Fees: Previously, the upfront fee to take out an HECM standard was 2 percent of the property's value, while a HECM saver was .01 percent. The new fee is .5 percent on smaller loans, but individuals who take out a loan that is more than 60 percent of their home's value will pay a 2.5 percent fee.
  • First-year limit: During the first year of a loan, homeowners can only withdraw up to 60 percent of the loan amount.

"The changes really put the product on track as a long-term financial planning tool as opposed to a crisis management tool," Ramsey Alwin, Senior Director of Economic Security at the National Council on Aging, told New York Times.


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Increasingly, several generations of American families are  living together. According to a Pew Research Center analysis of U.S. Census data, more than 50 million Americans, or almost 17 percent of the population, live in households containing two adult generations. These multi-generational living arrangements present legal and financial challenges around home ownership.


Multi-generational households may include "boomerang" children who return home after college or other forays out into the world, middle-aged children who have lost jobs in the recent recession, or seniors who no longer can or want to live alone. In some cases, everything works out well for all concerned. But, it's important that everyone, including siblings living elsewhere, find answers to questions like these:

  1. If mom owns the house, what happens when she passes away? Do daughter and son-in-law have to move out? If mom leaves them the house, is that fair to the other siblings? If she leaves them her savings and investments instead, what happens if that money gets spent down on her care?
  2. If mom pays for an in-law addition to be built on daughter and son-in-law's house, what guarantees should she have about being able to live there? What happens if, despite everyone's best intentions, mom moves out, either because living together isn't working out or she needs care that the family can't provide? Do the daughter and son-in-law simply get the advantage of the increase in value to their property? What if mom needs the money she put into the house to live on? What are the Medicaid issues if she needs nursing home care within five years?
  3. What are everyone's expectations in terms of paying living and housing expenses?
  4. What happens if daughter gets a great job offer in another city? Or, daughter and son-in-law get divorced?
  5. If grandchildren are still living at home, is mom expected to help with child care?
  6. How do the answers to all of the questions change if mom and daughter and her husband are pooling their resources to purchase a new home for everyone?
  7. Who will care for mom if she becomes disabled? Is daughter expected to give up her work to provide the care? Should she be compensated? What about using up mom's financial resources to pay for care providers?

It can be difficult to answer many of these questions, but having an open discussion about them at the start, writing down the answers, and reviewing the questions and answers as circumstances change, can help avoid misunderstandings and potential recriminations down the road.  In addition, all of the options have different tax results in terms of capital gains when the home is sold, as well as different treatment by Medicaid if an older adult needs help paying for care.


Confused? Planning for today ... and tomorrow is an area of concentration for the experienced elder law attorneys at Dutton & Casey. We are here to assist. 


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We have numerous programs, for community  members and professionals, planned for 2014.


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Inpatient or Observation Status in the Hospital 


Medicare beneficiary's inpatient or outpatient status in a hospital affects the way that Medicare bills the beneficiary as well as whether the patient qualifies for Skilled Nursing Facility care following the hospital stay, so it is vital for a beneficiary to understand their rights.


The Center for Medicare Advocacy and Centers for Medicare and Medicaid offer information that describes the issue surrounding observation status and provides steps that patients can take to try and resolve the issue.


Note: In Illinois, hospitals are not required to tell a patient if they are being put under observation status or being admitted to the hospital, so it is important for the patient to ask.


information from the Center for Medicare Advocacy


information from the Centers for Medicare and Medicaid Services 

 Source: Make Medicare Work Coalition  


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Our Attorneys
From left to right: 

Helen Mesoloras, Janna Dutton,

Kathryn Casey, Hanny Pei-Rodriguez


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Serving Cook, DuPage, and Lake Counties in Illinois.
Office Hours in Arlington Heights, Chicago,
Skokie, and Westchester, Illinois.