Ask Liz Weston

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Liz Weston

Q&A: Transferring property after death

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Dear Liz: Just a quick comment on the woman who contemplated transferring her house to her partner and daughter as joint tenants. One must always consider the property tax impact on such transfers. In Los Angeles, real property that is transferred to a transferor’s significant other who is not the spouse or domestic partner will ultimately be reassessed by the county assessor. There are a number of property tax reassessment exclusions on transfers, such as from a parent to a child, from a person to his or her revocable trust and between spouses. This is why all factors must be considered before such a transfer is made.

Answer: A revocable transfer on death deed allows real estate to avoid probate in many states, but this option shouldn’t be used before thoroughly researching the consequences and consulting an estate planning attorney. Read on for an actual case where an ill-considered transfer had big financial consequences.

Q&A: Does moving to a new state necessitate a new living trust?

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Dear Liz: My husband and I have a revocable trust that was drawn up in Florida. We live in California now. We are renting and don’t own a house. Do we still need a trust if we don’t own property and have just one adult child to leave our financial funds to? One tax planner wants to charge us $1,800 to revise our trust to comply with California laws. That sounds high to me. What do you recommend?

Answer: Any time you move across state lines, you should have your estate documents reviewed and — probably — revised. State laws differ, and in this case you moved from a common law state to a community property state, where the rules differ a lot. Property acquired during marriage in a common law state isn’t automatically owned by both spouses, while in community property states, it typically is.

“Property,” by the way, doesn’t just refer to real estate. It refers to pretty much all your assets, including financial funds.

A relatively simple revocable living trust typically costs $2,000 and up, so the price you were quoted does not seem high, but you can check with one or two other estate planning attorneys if you want to compare costs.

Q&A: The downside of federal student loans

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Dear Liz: Are federal student loans turned over to a collection agency still collectible after 20 years?

Answer: Yes. Very much so. There is no statute of limitations on federal student loans, which means collectors can come after you until you pay or die, whichever comes first. Statutes of limitations on most other types of debt limit how long you can be sued. Federal student loans also typically can’t be erased in bankruptcy.

Those aren’t the only ways federal student loans differ from other debt. The government can seize your tax refunds or take part of your wages without going to court. Even Social Security benefits aren’t protected, as they are from other creditors.

So it makes sense to dig yourself out of this debt if you possibly can. You can find out how to do so at the U.S. Department of Education’s Federal Student Aid site (studentaid.ed.gov).

Friday’s need-to-know money news

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Zemanta Related Posts ThumbnailToday’s top story: 5 browser extensions to save you money and time. Also in the news: The pros and cons of store cards, what effect Donald Trump will have on student loans, and the best and worst gift cards to buy this year.

5 Browser Extensions to Save You Money and Time
Making your browser work for you.

Store Credit Card Applications Surge During the Holidays — But Should You Get One?
The pros and cons.

Ask Brianna: Will Trump Hurt or Help My Student Debt?
What loan holders should expect.

The Best and Worst Gift Cards to Buy This Year, Based on Discounts and Popularity
Get the most bang for your buck.

Thursday’s need-to-know money news

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Holiday-tipping-in-tough-times-7FKMMIM-x-largeToday’s top story: For international travel, MasterCard has a slight edge on Visa. Also in the news: How to build a multi-million dollar retirement fund, 10 ways to end 2016 on a financial high note, and 8 ways to keep a leash on your holiday spending.

For International Travel, MasterCard Has Slight Edge on Visa
Which card has the best rates?

How to Build a Multimillion-Dollar Retirement Fund
Step-by-step.

10 Ways to End 2016 on a Financial High Note
Ending the year strong.

8 Ways To Keep A Leash On Holiday Spending
Don’t go overboard.

Wednesday’s need-to-know money news

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common-retirement-mistakesToday’s top story: How to make the 10 years before retirement count. Also in the news: Tips on reining in holiday spending, which generation has the best credit score, and which insurance most car renters can say no to.

5 Ways to Make the 10 Years Before Retirement Count
Fattening your nest egg.

5 Frugality Pros Help You Rein In Holiday Spending
Avoiding the after-holidays sticker shock.

Average U.S. Credit Score Rises; ‘Silent Generation’ Wins Bragging Rights
The older you are, the better your score likely is.

Which insurance most car renters can just say no to
Deciding which insurance you need.