Spring is here. Go outside and take a walk and read on . . .

We have discussed reverse mortgages here in the past and will revisit them as a planning option periodically. Reverse mortgages allow a senior to tap the equity in their home without the need to pay back the loan until they move from the house or pass away. Reverse mortgages, however, are much more expensive than conventional loans and are inappropriate for people who are likely to move in a short period of time.

Families who have the resources can do a private reverse mortgage where the children lend the money to the parent, charge interest and place a formal lien on the home. This saves the parent the costs involved with a conventional reverse mortgage taken out from a bank and protects the children in that they will be paid back.

The risks in a private reverse mortgage are the normal risks of doing business with family, issues of family dynamic if one child has the funds to help and another does not and possibly Medicaid qualification issues if the terms of the reverse mortgage are not in compliance with the rules.

For those of you lucky souls who have the fast disappearing company pension, a very difficult question always is whether you take the lifetime monthly payout or take the lump sum payment and run. You should consider:

1. The health of the company i.e. will the lifetime payout actually last YOUR lifetime as opposed the potentially shorter lifetime of your employer;

2. What the lump sum will buy from an insurance company in the form of an annuity. An annuity may provide either more safety or a higher guaranteed monthly benefit;

3. Single or joint life. You can guarantee that your surviving spouse will get a portion of your monthly payment but it will lower the amount you receive. Often taking the single life higher payment and purchasing a life insurance policy can accomplish the same goal of protecting the surviving spouse at a lower cost. This depends on many factors, including your health.

4. Your health. If your health is poor and your life expectancy short, often the lump sum is the better option.

Admitting a loved one to a nursing home can be very stressful. In addition to dealing with a sick family member and managing all the details involved with the move, you must decide whether to sign all the papers the nursing home is giving you. Nursing home admission agreements can be complicated and confusing.

It is important not to rush, but rather to read. Read the agreement carefully because it could contain illegal or misleading provisions. If possible, try not to sign the agreement until after the resident has moved into the facility. Once a resident has moved in, you will have much more leverage. But even if you have to sign the agreement before the resident moves in, you should still request that the nursing home delete any illegal or unfair terms.

Two items commonly found in these agreements that you need to pay close attention to are a requirement that you be liable for the resident's expenses and a binding arbitration agreement.

Responsible party: A nursing home may try to get you to sign the agreement as the "Responsible Party." It is very important that you do not agree to this. Nursing homes are prohibited from requiring third parties to guarantee payment of nursing home bills, but many try to get family members to voluntarily agree to pay the bills.

If possible, the resident should sign the agreement him- or herself. If the resident is incapacitated, you may sign the agreement, but be clear you are signing as the resident's agent. Signing the agreement as a responsible party may obligate you to pay the nursing home if the nursing resident is unable to. Look over the agreement for the term "responsible party," "guarantor," "financial agent," or anything similar. Before signing, cross out any terms that indicate you will be responsible for payment and clearly indicate that you are only agreeing to use the resident's income and resources to pay.

Arbitration provision: Many nursing home admission agreements contain a provision stating that all disputes regarding the resident's care will be decided through arbitration. An arbitration provision is not illegal, but by signing it, you are giving up your right to go to court to resolve a dispute with the facility. The nursing home cannot require you to sign an arbitration provision, and you should cross out the arbitration language before signing.

Other provisions: The following are some other provisions to look out for in a nursing home admission agreement:

Private pay requirement. It is illegal for the nursing home to require a Medicare or Medicaid recipient to pay the private rate for a period of time. The nursing home also cannot require a resident to affirm that he or she is not eligible for Medicare or Medicaid.

Eviction procedures. It is illegal for the nursing home to authorize eviction for any reason other than the following: the nursing home cannot meet the resident's needs, the resident's heath has improved, the resident's presence is endangering other residents, the resident has not paid, or the nursing home is ceasing operations.

Waiver of rights. Any provision that waives the nursing home's liability for lost or stolen personal items is illegal. It is also illegal for the nursing home to waive liability for the resident's health.

The significant devaluation of the U.S. dollar over the last year has made foreign goods more expensive. Travel to Europe and other places has become very pricey.

The following are a few vacation locations where the U.S. dollar still buys a decent trip:

Argentina: Sophisticated and a great bargain;

Bali: Tropical location and good amenities for a song compared with Caribbean locales (although airfare may be more);

Costa Rica: The dollar has actually improved in buying power over the last few years here. Rainforests, beaches, surfing;

Mexico: Certain parts of Mexico remain a bargain but you have to be an informed consumer;

Morocco: History abounds for a very reasonable price;

Panama: History, rainforests and 1500 miles of coastline with a currency pegged to the dollar;

Vietnam: The dollar is stronger against the Vietnamese currency than it was 3 years ago. Beaches and far east culture for a great value.

Stress costs money. In addition to the emotional burden stress puts on you it also increases your chances of contracting illness, becoming obese and getting heart disease. Additional costs (annual estimates) can be:

Non-prescription drugs like pain relievers: $300.00

Doctor visits and other out of pocket health care costs: $5600.00

Higher life insurance premiums: $375.00

Root canal and other dental problems: $500+++

These are certainly not the only costs of the inability to deal with stress but it certainly makes one think about the personal and financial benefits of reducing it.

This is a true story.

Eight years ago, when Mr. X was 73 years old, he had about $500,000 in the bank and owned a house in Northern California worth about $650,000. He was looking forward to a comfortable retirement. Mr. X walked recently with his stepdaughter, Ms. Y, on a path in Grass Valley, Calif. Because of his financial losses, Mr. X had to move into her home about three hours from where he had been living. Today, at 81, he has lost everything. Mr. X, a retired aerospace engineer, now lives in his stepdaughter's tiny, mountainside home in a room not much larger than his bed.

By his own admission, Mr. X willingly made every decision that led to his financial problems. He gave away large sums to people he thought were friends, and then, in need of money, sold his house at a deep discount to the first person who offered to buy it.

Even so, he claims in a lawsuit that he should be compensated for some of his losses for a simple reason: he is old, and should not bear the full responsibility for his choices. "I still make pretty good decisions about most things," said Mr. X, who shows no signs of dementia. "But for others, I guess I'm not as sharp as I was before, and people take advantage of that."

In the last few years, thousands of older Americans like Mr. X have filed suits against companies and salespeople who have promoted dubious offers and schemes. These suits are unusual because the victims typically do not say they were intimidated or lied to, and they concede they freely made what turned out to be unwise decisions. But because the plaintiffs are older, they argue, they should be less accountable for their mistakes.

These lawsuits raise controversial questions: In the eyes of the law, should the elderly be treated like adolescents, who are not entirely responsible for their poor decisions, but are also barred from making certain choices on their own? Or should they have autonomy, and therefore be accountable for their blunders?

Minors, for instance, can typically cancel a contract without penalty, unless it is co-signed by a parent. But the law also prohibits most teenagers from making major financial decisions. It seems that we have to figure out how to balance our desire to protect vulnerable seniors with their rights to autonomy.

Although national figures are hard to collect, there has been a huge increase in civil lawsuits alleging financial abuse. Many of the legal theories at the core of these suits draw on recently passed laws that are often ambiguously worded.

California's elder abuse statute, for instance, does not specify how sales agents should treat older customers. Instead, the law recognizes that the elderly are vulnerable to "abuse, neglect or abandonment," and indicates that an older person has been financially abused when "it is obvious to a reasonable person" that fraud has occurred. These broad laws, argues Mr. X's lawyer, create special protections for the elderly, even if they are not specifically spelled out.

For instance, Mr. X's suit contends that mortgage brokers and banks defrauded him by helping him take out loans they knew he could not afford, and that the person who bought his house deceived him by paying far less than its market value. Such theories have yet to be fully tested in court. And because many cases settle before they go to trial, in part because companies often assume juries will side with older victims, there is little precedent for how the laws should be interpreted.

As growing numbers of elderly consumers begin citing such legislation to undo contracts or get refunds, some companies and executives are warning of possible repercussions. Either someone has the mental capacity to make a decision, and therefore live with the consequences, or they don't, in which case they shouldn't be managing their own finances.

Mr. X and his wife met while square dancing. After she died, he ended a long period of loneliness by taking square-dancing classes. He gave up the classes when he moved in with his stepdaughter. A retired engineer, Mr. X's home had a value of $650,000 when he was 73. He had to sell it to pay debts by the time he was 81. It appears Mr. X wants to have it both ways - protection when he makes mistakes, and the right to make all his own decisions.

His wife of 28 years had died over a year earlier from a long illness. They had met square dancing, and after they married, he embraced her two older children and bought a modest home in a walnut orchard in Campbell, Calif. When he retired in 1989 from Lockheed Martin, they took road trips to dig up interesting rocks and crystals, which they polished in their garage. But after his wife died Mr. X began staying indoors, ignoring the phone and reading the thousands of paperbacks he had stored in two rooms. His stepchildren visited once or twice a month.

He was raking leaves one day when a woman from the block asked him about the nearby church. The woman, Ms. Y, was in her mid-40s and said she was raising a 2-year-old on her own, he recalled. He felt sorry for her since she was a single mother. She stopped by regularly after that, asking advice and telling funny stories. Mr. X had spent years watching his wife die. It felt good to help someone. Slowly, he began emerging from a muffling depression.

Within a year, with Mr. X's encouragement, Ms. Y began cleaning houses in a nearby town. The bus trips were long, so Mr. X drove her to the job. One day, Mr. X heard a radio advertisement for a square dancing class. He showed up and discovered he had become a precious commodity: an unattached male with strong knees. He began attending a different class every night and hoedowns on most Saturdays.

According to copies of bank records made available by his family, by the time Ms. Y disappeared last year, Mr. X had written checks to her or her creditors for at least $209,000 over six years, and had given her hundreds of thousands of dollars more in cash. Mr. X and his stepdaughter estimate that he gave away more than $650,000 in all. None of it was ever repaid.

Eventually, his stepdaughter, Z, started asking her stepfather if he was having any financial problems. But she felt uneasy at the thought of interrogating him or forcing him to accept help. She wanted to respect his privacy yet worried about him. He was too embarrassed to tell her. In 2004, with his retirement accounts running dry, Mr. X got a new loan on his home for $265,000. After paying fees and earlier debts, he was left with about $100,000. But by then, five years since meeting Ms. Y, some of her credit cards were linked to his bank accounts. He had co-signed for lines of credit at Macy's, Nordstrom and a local furniture dealer. He was soon more than $40,000 in debt.

He tried to pare back, but her pleas became hard-edged. In late 2005, Mr. X was desperate for money when a mortgage broker from Jett Financial knocked on his door, according to his suit. Mr. X welcomed him and his offer to refinance his home again. He paid more than $33,000 in fees for a $352,000 mortgage. After settling his earlier mortgages and credit card debts, Mr. X was left with only $12,000, according to records.

Almost immediately, he discovered he could not pay the new loan's $2,200 a month cost. When a lender began threatening foreclosure, Mr. X refinanced a third time, taking on an even more expensive loan. By then, Ms. Y had moved, though Mr. X was still hopeful he would get his money back. When a man called one day and said he had a check for $93,000 to settle Ms. Y's debts, that faith seemed justified. The man said if Mr. X just paid $850 to cover a few fees, he would get his payoff. The man never showed up, and Mr. X finally realized his money was gone.

He began asking elderly friends for loans himself. By August of last year, with the bank threatening to seize his home again, Mr. X visited a mortgage broker named A to see if he could refinance a fourth time. But lenders said he was too great a risk. A suggested that he could buy the house himself. According to court documents, the broker proposed paying the equivalent of $539,000, which was $111,000 below the house's appraised value.

Selling the house was the only way he could think of to get himself out of the mess. He leapt at the deal. After paying off his credit cards, other loans and more than $83,000 in mortgage penalties and costs, Mr. X was left with only $5,583, according to his lawsuit. Mr. A said he could stay in the house if he paid rent. But Mr. X's monthly payments on Ms. Y's credit cards were consuming everything. Within eight months, Mr. X received an eviction notice.

Mr. X abandoned his house, selling almost everything, and moved in with his stepdaughter three hours away from his home and square dancing classes. His stepdaughter approached the district attorney's office about pressing charges against Ms. Y. Authorities said they were investigating, but had not made any decisions.

Mr. A, in an interview, said he was only 19 years old when he bought Mr. X's house with no money down, and that he became a mortgage broker instead of going to college because it offered a quick route to wealth. He said that his youth should excuse his actions. Mr. A added that Mr. X was presented with all the legally required documents and information when he sold his house.

A few miles from Mr. X's former home is the Sons of Norway Nordahl Hall, where he danced with the Square Hoppers Square Dancing Club most Thursday nights. Club members describe Mr. X as a gentleman with a graceful do-si-do. They had wondered why he had suddenly disappeared, and were dismayed to hear he had lost his house. Between dances, as gray-haired men massaged stiff knees and women adjusted knee-high stockings, they discussed the vulnerabilities of age.

Some worry that lawsuits like Mr. X's will backfire on the elderly. Rights will be taken away to protect the elderly from themselves. Advocates for the elderly, however, say there has to be some kind of recognition that older consumers are more vulnerable.

However, there is a difference between elderly being preyed on by unscrupulous business people who conceal what they are truly selling (like annuity salesman who do not explain the surrender charges) and seniors giving away money of their own accord, i.e. when they have the capability to understand the consequences of their actions. The law should be there to protect those who do not understand the consequences of their actions.

No answers are given here but we would like to know what you think about this very difficult and relevant issue.

Rates are stable (still in the upper 5% to lower 6% for a 30 year refi no point loan for excellent credit). Although the fed has continued to lower short term rates (and is likely to continue to do so) the market priced 10 year T-Note (which is what mortgage rates are based on) has gone up a little. Traders apparently believe that inflation is more likely over the long run and is pricing that into mortgage rates.

People with adjustable rates should still try to refinance into fixed rate products if they can as rates are still historically low.