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Investment Adviser & Estate Planning

My spouse and I are house-rich, but need to plan long-term health care for our son. Where do we begin?

My husband is 49 and I am 42. We own approximately $100, 000, 000 in real estate; we own a small house we rent out that is worth $480, 000 and we live in a house we inherited from my husband's parents when they passed away, worth just over $520, 000. I know these are both very good investments. We owe approximately $100, 000 on the house we rent out; the rent almost covers that mortgage. We don't owe anything on the house we live in. However, we have a line of credit on the house we rent out; the interest on it is tax deductible. We owe $200,000 on the line of credit. We have a son with learning disabilities who is now 7 and we have paid a huge amount in tutoring, private schools, as well I did not work until just this past year as I wanted to be with my son. We don't want to carry on more debt, so I have gone back to work as a teacher and thus our household income is quite good now, and a lot of the money I am taxed we will get back because of my son's disability and then we can use this for further schooling and tutoring. My husband is a carpenter and so because he runs his own company he gets a lot of write offs. My job carries an excellent pension and we max out RESP's for our son, and we have a daughter who also has a max. RESP. Are we okay financially? We hope to chip away at the huge amount we have on our mortgage line of credit, but I always feel guilty about it. And of course, I worry about how much our son will continue to cost us. Thank you for any advice you can give

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Highlights

  • Diversify your portfolio so that not all of your wealth is tied up in one type of investment.
  • Special needs trusts are usually created to support a person with long-term medical needs.

Consult with an investment adviser and an estate planning attorney regarding your situation.

Investment Adviser

Today, you are rich in real estate, but you do not mention other assets. You did not mention your household income. However, one can infer from your question that you are cash-flow positive on the rental property. Consult with an investment adviser regarding the income from your property and wages. An investment adviser will help you create a plan for life insurance, savings, and investments in securities. In other words, you need to diversify your portfolio so that not all of your wealth is tied up in one type of investment.

Estate Plan

You have substantial wealth and also a child significant life-long needs. Consult with an attorney about creating a special needs trust. A special needs trust is, as its name suggests, is created to serve the needs of a person who has unusual or specific requirements. Special needs trusts are usually created to support a person with long-term medical needs.

Here, you can create a special needs trust for your son, assuming his learning disabilities will continue into adulthood. An attorney experienced in estate planning will be able to craft a special needs trust that is tailored to his needs.

Assuming you create an investment plan, you can use the wealth created with your investment adviser.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

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