Mom needed more money. That was all there was to it. Her bills were mounting, her income was fixed, the old family home was falling down, and the kids, while willing to help, were themselves strapped with the obligations of raising children of their own. Mom wanted to stay in her home, and was not open to selling to pay debts.

This dismal scenario is not uncommon. Mom’s generation learned from long, hard experience to pay off the house first. Often, the house is Mom’s only significant asset.

The children have suggested that Mom take out a home-equity loan to meet her medical bills. Mom was not open to that suggestion. Too many friends and family lost their homes during the Depression for Mom to risk losing her home to a foreclosure if she couldn’t make the payment.

Mom’s concern, when she came to the office, was to find an acceptable means of increasing her cash flow. Since traditional mortgages and credit cards were unacceptable, and other assets were already depleted, we had to be creative.

We introduced her to the "First National Bank of Mom," otherwise known as a reverse mortgage. Mom was initially opposed to anything that contained the word "mortgage," since it connoted the risk of losing her home. When we explained that a reverse mortgage did not require payments, did not risk loss of her home and could provide her with the cash flow she needed, Mom was willing to discuss this option.

In a reverse mortgage, the homeowner receives cash in exchange for the company receiving the right to equity in the home after the death of the homeowner. This is critical. The company has no right to the equity in the home until the homeowner either dies or sells the home.

The homeowner can receive payment in one of three forms. First, Mom could receive a lump sum. Second, Mom could receive payments until she dies, or for a set period of years. Third, and most popularly, Mom could receive a credit line from which she could draw until it was exhausted.

Mom never has to make a payment on the reverse mortgage – ever. No payment is due until she dies or sells the home. Interest will accrue on the amounts drawn from the reverse mortgage until repaid, but is only payable upon her death or sale of the home.

The amount of available cash is influenced by Mom’s age, the location of the house, and any existing debt on the house or necessary repairs. Existing will need to be paid off with the proceeds of the reverse mortgage; repairs will need to be completed with part of those proceeds.

Since Mom is over 62 and lives in her single-family home, of which she is the only owner, she qualifies to apply for the reverse mortgage. She decides to work with her daughter, Tricia, and explore her options at www.aarp.org/revmort, the reverse mortgage information site of the AARP, and www.reverse.org, the reverse mortgage website for the more detail-oriented researcher she knows her daughter to be.

Several months later, Mom revisits the office to go over her estate plan now that the reverse mortgage is in place. She is much more relaxed, having paid off her medical bills and fixed up the house. She is able to supplement her income from the reverse mortgage credit line, and is living more comfortably, though still frugally.