SCENARIO:
A couple faced a heartbreaking challenge: their adult daughter, living with a significant neurological disability, could no longer reside with them. Yet, she lacked the financial means to live independently.
PROBLEM:
Her limited income from Social Security and New York State benefits wasn’t enough to cover rent or a mortgage. The parents wanted to buy a home for her—but their assets were tied up in retirement accounts, with over $2 million in 401(k)s.
They turned to their bank, where a loan officer suggested withdrawing a large sum from their 401(k) to fund the down payment. Fortunately, their accountant intervened, warning of the massive tax liability this would trigger. That’s when their Realtor introduced them to me.
DIAGNOSIS & SOLUTION:
During our initial consultation, I uncovered a key detail: the parents were in the process of selling a co-owned investment property. The proceeds from that sale would be enough to purchase the new home outright.
I advised them NOT to take out a mortgage. Instead, they should use the cash proceeds to buy the home—and retain ownership themselves, rather than putting it in their daughter’s name. Their daughter could pay a nominal rent, allowing the parents to benefit from the investment property tax deduction.
To protect their daughter’s future, I recommended placing the property in a trust or LLC, which could later be transferred to a special needs trust upon their passing.
RESULT:
✅ Nearly six figures in taxes avoided
✅ Valuable real estate tax deductions preserved
✅ A potential estate-planning disaster averted
✅ No mortgage needed—and while there was no revenue generated for Mortgage Wealth Advisors, but the peace of mind and goodwill generated were priceless
BOTTOM LINE:
Helping you secure a mortgage is just the beginning. Structuring it wisely—whether for a purchase, refinance, reverse mortgage, or investment property—can dramatically impact your financial future.
Your home and mortgage are likely the most significant financial transactions of your life. Don’t trust them to a bank or a salesperson. Work with a Certified Mortgage Planning Specialist who understands the long-term financial and estate implications of every option. As this story shows, the wrong advice could have been catastrophic!
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Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.
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