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Life Settlements, Reverse Mortgages, Power of Appointment
In this paper, we examine three types of money management tools that could be used in estate and financial planning matters. The first two, the life settlement, which enables the sale of life insurance policies in secondary markets, and the reverse mortgage, which is a loan taken out against the home equity accumulated and requires no repayment as long as the homeowner lives in the home, have been used as investment vehicles by insurance companies, banks, hedge funds, and other investment entities. The third tool, the power of appointment, provides counsel on the proper format for preparing the deed to minimize the tax implications related to the transfer of assets from the parent to the heirs.