Capital Gains

If you are over the age of 55 then there are several issues that you need to consider before buying or selling any real estate.  The best advice we can give you is to some serious advance planning and know your rights before you make a costly mistake.  There are several new tax laws pertaining to capital gains that can be confusing and overwhelming and you need to be aware of them.  With the tremendous appreciation that we have seen in recent years it’s very possible that you may have a taxable consequence when you sell your property OR even better you may be eligible for a sizeable IRS exemption depending on many factors like how long you’ve lived on the property, what your basis is, etc.  The bottom line is that if you are planning do anything with real estate you need should consult a qualified tax consult AND a knowledgeable attorney.

County Property Taxes

Another special consideration concerning being 55 or over are county property taxes.  There are several special programs in some counties of California that allow you to take your property taxes to a new property if you move, sometimes even to other cooperating counties.  There may also be special considerations if you are disabled or economically challenged concerning payment of your property taxes.  You may also be able to transfer your property taxes to your children or grandchildren.  Most counties have information available from the tax assessors’ office concerning these programs.  We have seen many seniors make costly mistakes without arming themselves with information and considering the alternatives.

Reverse Mortgages

Another new consideration for seniors over the age of 62 is the availability of not necessarily a new product but a much improved one, the Reverse Mortgage.  There are many old wives tales and myths that exist but are simply not true.  If you are real estate rich and cash poor this is a great option allowing you to tap into your equity.  For your principal residence it is the easiest of mortgages to qualify for, you may even have an existing mortgage, and you can stay in the your home for as long as you need to without paying one penny back of the tax free money you receive.  You don’t have to repay anything unless you have to move out for a designated period because of health reasons or when you die, and your heirs are entitled to any remaining equity after sales costs.

Estate Planning, Trust vs. Probate

The last thing that we should address is the importance of a Trust.  Too many people and especially seniors are poor estate planners, not only don’t they have a trust they don’t even have a will.  Not only can having real property in a trust be an excellent tax strategy but it avoids a time consuming costly process of probate.  Dying with only a will or worse interstate is problematic, expensive, sometimes takes years, and can tear families apart.  A trust is one of the best vehicles there is to avoid those problems.  An important aspect often overlooked of a trust is the ability for someone to take over your affairs if you become physically or mentally incapable of taking care of things yourself, not just if you die.  If there is something worse than having to deal with than probate it’s a conservatorship when someone becomes incapacitated.  Don’t procrastinate, consult an estate attorney immediately and don’t use some form out of a book or go to a trust mill just because it’s cheaper, it can cost you much more in the end.