Expert: Dick Dennis - 7/8/2006

Question
Thank you for your quick reply! Another question: as a co-trustee or successor-trustee, can or does my son receive any benefits that would usually accompany an 'investment' like buying a house?...other than my forever and unconditional love? What I'm saying is my son's future wife is a great girl, but she would want to feel comfortable with the extra expense of about $1000 a month, even though she loves me too! I'm thinking that he would have to buy it and rent it to me so he could get tax breaks, depreciation, etc...also, if he provided for an improvement (something major), he could only claim that if he were the owner, right? I really appreciate your advice.  Thanks again, Marjie
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Followup To

Question -
My son lives in CA and I live in Nebraska. I am buying my home valued at approx. 150,000.00 and owe 102,000.00. The problem is after 30+ years as a nurse, my back is shot. I am applying for disability but have no income at present. My son asked me today about possibly helping me out by buying my house and letting me continue to live here. I thought maybe a Living Trust? Some other agreement? I don't know much about these things and just wanted some advice on what would be the best way to handle it...He is getting married and has started a business plus he has pretty much repaired his bad credit (from years ago being 'young and dumb'!) He mentioned "Investment" trying not to make me feel bad, I think. He's trustworthy and dependable. I would appreciate any advice.   Thank you,  Marjie in NE

Answer -
I am presuming you are not 62 yet, Marjie, so I won't discuss a reverse mortgage. I will go to what I think you should do: a REVOCABLE LIVING TRUST. Your son can be your co-trustee with you. Or. He can be the successor trustee. He would take over as the trustee upon your demise.

Since he is part of the title of the property as at least the successor trustee, he can help you with finances, if that is you aim. And should you pass on, the property is his in the trust. Or you and/or he can revoke the trust. Only the trustee(s) can revoke it.

Please consult with a TRUST attorney to make sure it is done right. It definitely is worth the money.

I do wish you well, Marjie.

Dick Dennis          dixiedee13@aol.com

www.OldProblemSolver.com

Answer
I recommend you talk to that TRUST attorney or a CPA or a tax attorney or a tax expert of some kind. In talking to them, they would be able to advise better because of your proximity to them. Renting to one's mother may raise other problems because the IRS is wise to relatives being charged less than a market rent. They may automatically put in a market rent in your son's tax return. Now you can see why I suggested talking to a tax expert.

I do wish you well.

Dick Dennis          dixiedee13@aol.com