DEAR BOB: My wife and I have living trusts. Both of us serve as our own trustees. But our home is not titled in either living trust. If we put the title in my wife’s trust, would it be possible to automatically switch it over to my living trust upon her death? The key word is “automatically” similar to TOD (transfer on death) – Bill B.
DEAR BILL: What makes you think your wife will die first? Your living trusts are worthless without any assets. But don’t feel bad. Lots of people waste money to create a living trust that they neglect to “fund.”
Purchase Bob Bruss reports online.
I am not aware of any way to “automatically” switch living trust assets to the new specified beneficiary after the original beneficiary and trustor dies. The successor trustee, such as you, a trusted relative or friend, must then transfer the living trust assets according to the terms of the deceased’s living trust.
You have a serious problem with your worthless, empty living trusts. All that is usually required to “fund” a living trust is to record a quit claim deed for your home from yourselves to your living trusts. For details, please consult a local attorney who specializes in living trusts.
NOISY NEIGHBOR CALLS FOR STRONG LEGAL ACTION
DEAR BOB: Several months ago my neighbor installed a spa in his adjoining patio. The spa motor is so loud I can hear it in my house, especially in my bedroom, which is adjacent to his yard. The drone seems to echo and reverberate at night so it sounds like a car engine left idling. All my efforts to get this neighbor to set the timer so the motor is off at night have only resulted in his refusal to cooperate. I complained about the noise to our homeowner’s association but their written requests to him have been ignored. I have to sleep with uncomfortable ear plugs and sometimes go to the family room sofa to get some sleep. What can I do? – Anita V.
DEAR ANITA: The situation you describe is called a private nuisance. If it affected a large number of property owners it would be a public nuisance.
You tried being nice. Now it’s time to take legal action. But you will need to retain a real estate attorney.
He or she should first write a polite letter to the neighbor, explaining the severity of the noise problem and requesting cooperation. If that doesn’t produce results, the next step is to file a lawsuit against the neighbor for a nuisance abatement injunction. Maybe that will get results so you don’t have to go to trial.
NO WAY TO AVOID TAX ON QUICK RESALE PROFIT
DEAR BOB: I read that book you recommended, “How to Be a Quick Turn Real Estate Millionaire,” by Ron LeGrand. It really inspired me to use my construction skills. My wife also read the book and became enthused. She located a perfect fixer-upper, which we bought last October. My construction friends and I quickly fixed it up. The sale closed in December for a net profit of about $45,000 in 60 days. But now we realize we owe tax on this profit. Can we make one of those tax-deferred exchanges for another fixer house like you often discuss? – Jeff H.
DEAR JEFF: If you already closed the sale of that investment property and received your $45,000 cash profit, it’s too late for a tax-deferred exchange. Sorry, but your profit is taxable at ordinary income tax rates.
You could have avoided owing tax on your quit resale profit by making a Starker delayed exchange for another investment property of equal or greater cost and equity. You were off to a great start. But now your profit will be eroded by the profit tax you could have avoided. Details are in my special report, “How the New Tax-Deferred Realty Exchange Rules Can Make You Very Wealthy,” available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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