DEAR BOB: I am retired, age 72, and in relatively goodhealth. But I am “house rich and cash poor,” as you often mention.I’ve been looking into a reverse mortgage to improve my income. Also, my houseneeds a new roof and other repairs. When my daughter visited recently, Idiscussed a reverse mortgage with her. She was very opposed, saying the bankwould wind up owning my house. I want to leave her a nice inheritance. But I’mworried that if I live too long, there won’t be anything left for her. What doyou advise? –Helen H.
DEAR HELEN: Many selfish adult children try to talk theirparents out of obtaining a reverse mortgage. The obvious reason is a reversemortgage will reduce the amount of your daughter’s inherited equity in thehouse.
Purchase Bob Bruss reports online.
However, you have no moral or legal obligation to leave yourselfish daughter anything. She is clearly wrong. The bank will not wind upowning your house.
When you decide to sell, move out for longer than 12 monthsor die, the reverse mortgage must be paid off from the house’s sales proceeds.The remaining equity goes to your heirs, presumably including your daughter.
The Bible does not say, “Thou shalt leave thyungrateful heirs a big equity in thy house.” You have no obligation toleave your daughter anything, especially if she doesn’t want you to enjoy yourhome and keep it in good repair by obtaining a reverse mortgage.
NO TAX DEDUCTION IF YOU DON’T PAY THE MORTGAGE
DEAR BOB: I am planning on selling my home and buyinganother. My daughter is willing to move in with me. I would like to add hername to the deed so she can deduct half of the home’s mortgage interest andproperty taxes on her income tax each year. Can this be done if I add her tothe deed but not to the mortgage? –Shirley McW.
DEAR SHIRLEY: For your daughter to deduct any mortgageinterest and/or property taxes, she must be on the title and actually haveproof she made the payments, such as cancelled checks. However, she does notneed her name on the mortgage obligation itself.
Just being on the title alone doesn’t entitle a person tothe itemized tax deductions unless that person actually paid the payments.Please consult your tax adviser for details.
WHAT IS BEST PROOF OF HOME OWNERSHIP?
DEAR BOB: Last March my husband and I moved into our newhome for which we paid all cash. Do we need a legal document proving this homeis paid and is ours? If either of us dies, will the surviving spouse or ourchildren have any legal difficulties? –Irma F.
DEAR IRMA: I hope you obtained an owner’s title insurancepolicy at the time of purchase. It will show you and your husband own the housewith no liens or encumbrances, except property taxes payable when they comedue.
The title policy should also specify how you hold title. Ifit is as joint tenants with right of survivorship (or as tenants by theentireties in states allowing that method), when one of you dies, the survivorautomatically receives full title without probate court proceedings. However,you both need written wills just in case you die at the same time, such as in aplane crash.
Better yet, holding title in your revocable living trustboth avoids probate and provides for the successor trustee to manage or evensell the property if one of you becomes incapacitated, such as by Alzheimer’sdisease or a severe stroke. For details, please consult a local real estateattorney.
The Robert Bruss special report, “24 Key QuestionsAnswered: Living Trust Secrets Reveal How to Avoid Probate Costs andDelays,” is available for $5 from Robert Bruss, 251 Park Road, Burlingame,CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News