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HOME COSTS - Across the United States, seniors are finding it challenging to keep hold of their homes amid rising property taxes and home appreciation. Riverside County property taxes rose a shocking 5.4% last year, just short of property values rising by 8.6%.
For those on a fixed budget, this represents an existential crisis that could pull the rug out from under them, leading to financial challenges or even worse. Indeed, California is facing an elderly homelessness crisis, with about 45% of all homeless people over the age of 50. Today, we’ll review how Riverside seniors can protect themselves from inflation and remain in their homes through community programs, loans, and other services.
Rely on Social Services to Age in Place
Rising housing costs mean that selling and moving into a new property is often not an option. The typical California home now costs over $900,000, a far cry from when many seniors purchased their homes decades ago. However, the home you lived in when you were 30 years old may no longer meet your needs at age 70, which is why the Riverside County Office on Aging assists with home modifications that will help you age in place.
These tools can include things like shower bars, guardrails, or wheelchair ramps. In some cases, they will help you access grants to widen doors for wheelchairs. The Riverside County Office on Aging can also help you find transportation to doctor’s appointments, in-home health aids, and nutritional services.
Apply for Tax Relief
As California property has grown more expensive, the state and Riverside County have found workarounds to shield elderly homeowners from these effects. Some of these include Proposition 19, Proposition 60/90, and Proposition 110.
Proposition 19 applies to those over 55 or who were a victim of a natural disaster and purchased property within two years of a previous sale. It allows the homeowner to transfer the base year of an old primary residence to an old primary residence, essentially resetting the tax value back. Proposition 60/90 works the same but is only for those aged 55 or older. Proposition 110 provides tax relief to those who are severely and permanently disabled, regardless of their age.
Use a Reverse Mortgage
A Riverside reverse mortgage works by drawing equity out of your home, similar to a home equity loan or HELOC. However, the reverse mortgage does not need to be paid back until the property changes hands, such as if you move out or pass away. Depending on your needs, you will receive a percentage of the home equity as a line of credit, lump sum, or fixed installment.
Reverse mortgages can be an invaluable way to keep up with rising costs of living or pay for sudden medical expenses. In general, you must be able to show that you have enough money to cover property taxes, homeowners insurance, and upkeep without the reverse mortgage proceeds. You can then use the proceeds however you would like and can set up a payment plan that meets your needs.
New legislation means that mortgage companies cannot allow you to owe more than the home is worth, and you must get counseling from an approved Department of Housing and Urban Development counselor before signing up. Always work with a reputable reverse mortgage loan company that will help you decide whether the decision is right for you and review all of the paperwork necessary.
Set Up a Trust
A trust can be a great way to protect your home from creditors after your passing, ensuring that it remains in the company. When you place your home in a trust, it legally becomes the property of the trustee, who may be you or your legal guardian. This allows the home to avoid probate, which is a lengthy process to distribute assets after death. A trust also allows your power of attorney to decide how to use the property before your death, such as selling it to pay for long-term care.
Work with an attorney to develop a trust while you are still clear of mind. An attorney will discuss how the probate process works, the benefits of a trust, and how your assets can be distributed. This will also make it easier for your loved ones to claim your belongings without worrying about lengthy legal battles.
Consult With Financial Advisors and Lawyers to Receive the Most Accurate Advice
While the property boom supports California’s supercharged economy, it comes with unpleasant side effects for Riverside, California, seniors, including higher taxes. Thankfully, there are many ways that older homeowners can fight the effects of out-of-control price rises, including tax breaks, aging in place, reverse mortgages, and trusts. Speak to a trusted financial advisor or estate lawyer who can assist you in untangling these nuances before making a move to secure your life’s greatest asset: your beautiful California home.
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