You should consult with an accountant, CPA, income tax prepareer, financial advisor, or attorney, if you are going to make these types of decisions. Do not depend solely on the advise of your loan officer or answers from this forum.
A reverse mortgage allows you to use the equity in your home while you're alive. When "you" pass away, your children can either sell the home and keep the proceeds after paying off the mortgage, or they can refinance and pay off the mortgage and keep the house.
I don't think your children will begrudge your using the equity in your home. The alternative, if they wish to preserve their inheritance, would be to subsidize your expenses.
Any equity remaining after paying off the mortgage,costs of sale and any other property liens would go to your estate to be distributed according to your directives.
Fran and Mark Redding
Prudential Fox Roach
1010 Stony Hill Road