Why it’s not always smart to put your house in your child’s name
Some people decide to do some “homemade” estate planning and put their house in a child’s name. They figure this will avoid probate and get the house out of their estate for tax purposes. This might be a good idea in some cases. But remember, if you give your house to your child now, any […]
Down market prompts new types of sales for buyers
The down market in real estate has created a boomlet in two obscure types of property sales: the “short sale” and the “house swap.” A short sale is an alternative to foreclosure. If a property owner is unable to make mortgage payments, but the lender doesn’t want to go through the legal hassle of foreclosure, […]
Be careful when selling or leasing mineral rights
Congratulations – there’s oil, coal, gas, salt, gemstones, or some other valuable material under your property. But how exactly do you sell someone the right to develop it? Most sales of real estate are sales “in fee simple” – which means the buyer owns the surface of the land, the earth underneath it, and the […]
Second owner of building could sue builder for defects
The second owner of a building could sue the builder for construction defects that led to the development of mold, the Iowa Supreme Court has ruled. The case involved a home that was built in 1995. In 2000, the original owners sold it to another family. The second family then discovered water damage and mold. […]
Can a condominium ban smoking inside units?
There’s a growing trend among condominium owners to ban smoking – not just in common areas, but inside individual units and in outdoor areas as well. Bans on smoking in common areas have been around for years. But a ban on smoking in individual units is a relatively new idea – and there are many […]
‘Family LLC’ saves a family $14million
A family-owned limited liability company saved a family $14 million in taxes, in the latest ruling from the U.S Tax Court on this technique. With a family LLC, parents create a company and fund it with valuable assets. Then they give their children ownership interests in the LLC. Giving these interests triggers less gift tax […]
Do you want your trust to benefit your heirs’ surviving spouses?
An heir to the Johnson & Johnson fortune created a trust to benefit four children. The trust was set up so that it would provide money to charity for a period of years, then be distributed to the four children and their spouses. By the time the distribution came around, one of the children (named […]
Loan to family business could trigger higher estate tax
From 1997 to 2003, a family could take an estate tax deduction of up to $675,000 if more than half of the estate property consisted of interest in a family business. This law is scheduled to go back into effect in 2010, so it’s wise to be aware of it. In particular, you should be […]
Children who inherit a 401 (k) can roll it over into a Roth IRA
The IRS has given families a little more flexibility in handling a 401 (K) and pension plans. According to an IRS announcement, children who inherit a 401 (k) or pension plan can now roll it over directly into a Roth IRA. Before, a spouse who inherited a 401 (k) or pension plan could roll it […]
Low Interest Rates create golden estate planning opportunity
The recent dip in interest rates has created a golden opportunity to save taxes while giving income-producing assets to your heirs. You can do this with a “grantor retained annuity trust,” or GRAT. It allows you to continue receiving income from the property for a number of years, and you can then give it to […]
