RMs are full of pitfalls for folks who do not look carefully at the
fine print, especially if they are younger and just past the
eligibility age.
A few years ago, a friend of mine in his late 60's considered doing
one. I got all the applications, logged on and read the law and
regulations related to them. Hit the local law school, looked at a
bunch of case law, Shepardized a lot of cases, and ended up with a case
file four or so inches thick.
I am an old legal consultant, who has worked extensively with folks
setting up estate documents, planning, living trusts, durable powers of
attorney, living wills, pour-over wills, etc., so reading the finer
points of law/regs is, to me, as interesting as a good spy novel is to
others. I laid out all the pros and cons to my friend, we discussed it
at length, and he determined he was a poor candidate for a RM.
A lot of old folks can get into deep doo-doo real quick if they don't
fully investigate their particular situation. Unfortunately, most folks
do not have the legal background to do their own investigation. If I
recall correctly, at the time I did the investigation for my friend,
the older you are, up to a point, the better you will make out. Cash in
hand, that is.
It also helped that a sharp, well-experienced agent sat down with me
and my friend and went over every aspect of the RM and any benefit. I
had already determined that a RM was not in the best interest of my
friend in the way in which he wanted to do his estate planning, but I
kept my mouth shut while the agent made his determination. His finding
was the same as mine.
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