August is “Write a Will” Month: Why a Will Is Especially Important for Reverse Mortgage Borrowers
As August nears, it’s the perfect time to reflect on something essential yet often overlooked: encouraging borrowers to create or update their will. For reverse mortgage borrowers, having a will is not just about paperwork — it’s about protecting their legacy, easing the burden on their loved ones, and ensuring their wishes are honored.
A Reverse Mortgage Loan Must Be Repaid Upon Death
This means their heirs will need to decide what to do with their home – whether to sell it or retain it – but in either case, the loan must be satisfied. Having a will helps expedite that process for their heirs because it establishes an Executor and can provide clear instructions for what should happen with their home.
Since the loan is due shortly after the borrower’s death (typically within 30 days, with potential for extensions up to six months), delays caused by dying intestate (without a will) can create major complications:
- Probate delays may limit heirs’ ability to act quickly to sell, refinance, or pay off the reverse mortgage.
- Without an appointed Executor, no one has legal authority to deal with the lender immediately.
- A valid will expedites probate and empowers someone to manage the home proactively.
Protecting Equity for Heirs
Even with a reverse mortgage, many borrowers still have significant equity in their homes. A will ensures that any remaining equity:
- Is distributed according to the borrower’s wishes, not state laws.
- Isn’t lost due to miscommunication, inaction, or confusion during estate settlement.
Preventing Family Disputes
When reverse mortgages are involved, misunderstandings or false assumptions can easily lead to conflict:
- One child may expect to inherit the house and live in it.
- Another may assume it will be sold and profits split.
- Family members may not know there’s a reverse mortgage at all.
- A will allows the borrower(s) to spell out their intentions clearly and reduce the risk of disagreements or legal battles.
Stay in Control of Their Legacy
Borrowers worked hard to build their life, their home, and their savings. A will ensures that their belongings, property, and financial assets go exactly where they want them to.
Help Family Avoid Conflict and Confusion
Losing a loved one is hard enough without legal confusion. A clear, updated will can ease stress and prevent family disagreements during an already emotional time.
Make Things Easier for the Executor
Appointing someone they trust to carry out their wishes – known as the Executor – helps streamline the process. Without a will, the courts will make these decisions, which can cause delays and complications for those left behind.
Common Myths — Busted
- “I don’t have much, so I don’t need a will.”
Even if the estate is modest, a will makes sure what they do have is passed on according to their wishes. - “I already wrote a will years ago.”
If the will hasn’t been reviewed in a while, it may be out of date. Life changes – like losing a spouse, welcoming new grandchildren, or changes in health – might mean the will needs updating.
Getting Started Is Easier Than You Think
Creating a will does not have to be costly or complicated. Borrowers can work with an attorney, use a reputable online service, or explore free or low-cost resources offered through senior centers, nonprofit organizations, or legal aid clinics.
For reverse mortgage borrowers, not having a will leaves their estate and home vulnerable. A will ensures their wishes are followed, their loved ones aren’t left scrambling, and the home – likely their largest asset – is handled with care. This August, encourage borrowers to either write their will or review the one they already have. Suggest they talk to loved ones about their wishes. Peace of mind is one of the greatest gifts they can give — to themselves and those they love.
(Editor’s note: This column was contributed by Celink.)
