Articles Posted in Real Estate

11.20.19Many instances of estate planning disasters start when well-meaning people try to use a simple solution for what is ultimately a complicated problem. It’s better for all concerned to meet with an estate planning attorney who can present strategies that will achieve goals, rather than attempt a do-it-yourself plan that creates more problems than it solves.

In one example of a do-it-yourself estate plan, a husband decides to use his inheritance to purchase the family home. His wife signs a quitclaim deed to him that puts the property into his living trust, on the condition that if he dies before she does, she is allowed to live in the home until death.

However, the living trust was never signed. So, what would happen to the property if the husband were to die before the wife?

10.21.19There are many inheritance scenarios, where people hope that a simple solution will save them time and money. Unfortunately, that’s not always the way estate or tax laws work.

A woman received joint ownership of her father’s house about a decade ago. Her father is still living there, and so is her sister. The woman doesn’t pay for any of the expenses; she and her father take care of their own costs. The sisters plan on selling the home, after their father passes. The woman wonders if she can simply give her sister her half of the home and avoid paying any taxes.

This situation is expanded upon in recent nj.com article, “My sister and I own my father’s home. How can I avoid taxes?” The article notes that a sibling may give her half of a home owned in joint ownership to a sibling, but there may still be some tax consequences.

12.12.17Sounding more like their great grandparents than their parents, millennials say they’d rather buy real estate than invest in markets. However, they might be heading in a dangerous direction.

When Bankrate asked more than 1,000 Americans where they would prefer to invest money—long-term funds that they don’t need for another decade—the response was surprising. Slightly more than thirty percent said they would invest in real estate.

For young people, this preference is especially true. Among millennials (those ages 23 to 38), 36% responded that real estate is the best long-term investment option. Zero-risk cash investments, such as high-yield savings accounts or CDs, was second with 18% of respondents, and the stock market was third, with 16% of respondents.

6.5.19If you’ve got a fair amount of equity in your home and no other way to cover a healthcare cost or if the bills are coming in faster than your retirement accounts can manage, it might be time to consider a reverse mortgage.

For retirees in a financial tight spot, a home equity line of credit or borrowing against an existing home equity line of credit can provide a short-term solution. If you are at least 62 with a home that is not heavily mortgaged, a reverse mortgage is another option.

A revere mortgage gives you tax-free cash. No repayments are due, until you die or move out of the house.

5.15.19How home ownership is titled, or how it is described on the title to the house, can have far reaching implications that may not come into play for decades.

Deciding how the owners of a home will hold title to it, is a much bigger decision than most people think, says The Washington Post in a recent article, “What you need to know about holding title to a home with a loved one.” Before you sit down at the closing table to finalize the purchase of a home, or if the house is being re-titled to align with an estate plan, it’s important to understand the different ways that a home can be owned with another person.

There are three primary ways to title property between spouses. Joint tenancy is the least common and typically must include the language “with right of survivorship and not as tenants in common.” Spouses typically acquire title as “tenants by the entireties,” which only applies to spouses in a limited number of states.

FarmLife insurance can be useful in paying off debt, covering funeral costs and serving as a useful resource so that estate proceeds or any one person’s savings don’t have to be tapped.

Life insurance may be the least sexy part of the transition from one farming generation to another, but this financial tool can be very valuable. If parents or grandparents have planned properly, the proceeds from the life insurance may provide the funds that permit the farm to stay in the family. The proceeds, which are not subject to estate taxes, can be used to buy out the non-farming siblings so that the family ownership of the land can continue to another generation.

Successful Farming’s recent article, “Using Life Insurance in Estate Planning,” quotes David Bau, a University of Minnesota Extension educator based in Worthington, Minnesota. He says, “Life insurance is expensive, but it’s still a very good tool in the process. The farming heirs can have insurance on their parents, and they can use that money to buy out the estate.”

Here is a helpful checklist of the top ten ways to keep your estate plan current. 6.29.17

  1. Review your existing Will and any trust agreements. Over the course of a year our personal and our professional lives can change dramatically. Tax laws and regulations are also subject to change as new political administrations come into office. It is therefore important to periodically make sure that your documents will work the way you want them to. Some questions to ask: Is your plan tax efficient? Do you need to make any changes about the timing and manner in which your assets will transfer to your beneficiaries? Do you need to change any beneficiaries or add anybody new? These are all basic questions to keep in mind when reviewing your existing documents.
  2.         
    Consider whether your named fiduciaries are still appropriate. Your executors and trustees will be tasked with some significant responsibility. You should consider whether the persons you appointed in your documents are up to the tasks that lie ahead of them or if an alternate person or persons should be appointed.

3.17.17If you think of retirement as a one-time purchase, it is the biggest thing you’ll ever buy. Trying to pay for retirement without the funding, is asking for the impossible.

Compared to buying a new car or a house, paying for retirement is the biggest purchase of a lifetime, according to a study from Merrill Lynch and Age Wave reported in Credit Union Times, “Retirement Is ‘Life’s Most Expensive Purchase.”  Conversations over the course of four years with 50,000 people about their plans for retirement revealed some very problematic trends.

The average cost of retirement is over $700,000. That’s about 2.5 times that of the average home.  The average cost of a home is $278,300.

8.8.16Passing your home to your heirs can occur in a number of ways, depending upon your situation and your family. It’s not a do-it-yourself project—even in the simplest cases.

If you own a home and want to leave it to your loved ones, there are steps you need to take to ensure that your wishes are achieved. According to Fox News, “You're Going to Die—Here Are the Best Ways to Deal with Your Home,”, inheriting a collection of 80s Transformers action figures won’t have a big impact on your heirs, but a sizable asset like a house will.

Here are a few ways to help prepare now.

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