'Mooching' tax

[USAFpj]

Thanks guys- you're advice is extremely important, as the AF taught me how to jump out of planes and scuba dive, but I'm missing that situational awareness piece that comes with 'how families work' in these instances. My Dad is a lot like Arrow's statement above. He's never owned a credit card, and chuckles at any offer I make on helping him out financially (stubborn as a mule), as he deserves a retirement. Being a wise man, he just tells me to put that effort into my own family.

To be honest, he works that much not just because of the house note, but because he likes to! It's almost a badge of honor for him to let us know that 'the company's putting him into an early grave', but he has no issues taking that overtime and putting it into guns; another wise move. My job now is working with all kinds of guns on a daily basis, and providing diplomatic security. He once asked me why I don't seem to be a big collector of guns? I told him that as his only child, I'll have an instant collection in time!!:laughing:

Dave, you're absolutely right on lawyering up. I knew that at one time, but thanks for reminding me again. I'll be home in a few days, and I think with building the house plans, it's the perfect time for Dad and I to talk about the future.

I should mention as well that he is married- she currently holds a good job, and should be able to pay mortgage payments as well. His home is a modular that is about 10yrs old, so I think between the two of them, that home should be paid off within his lifetime.

 

[EarPlug]

Dave, you're absolutely right on lawyering up. I knew that at one time, but thanks for reminding me again. I'll be home in a few days, and I think with building the house plans, it's the perfect time for Dad and I to talk about the future.

I should mention as well that he is married- she currently holds a good job, and should be able to pay mortgage payments as well. His home is a modular that is about 10yrs old, so I think between the two of them, that home should be paid off within his lifetime.

Dad needs to get a Lawyer and Estate/Tax planner and a WILL now.

If he passes first his wife will get everything unless he makes his wishes known through Will.

The Estate/Tax planner should be consulted BEFORE you acquire the property for you home. How you Value and Deed the property can and will have future tax consequences regarding his Estate.

 

[MikePA]

His mortgage has first lien, regardless of what he deeds you.

This is not true.

'Deeding' it means the OPs father subdivided his property and sold a parcel to his son. The OP owns the parcel, not the father nor the father's mortgage holder.

OP: As others have said, you need to get an estate planner involved and you and your parents have spend time actually talking about this, including what's in your parent's wills, whose names are on the deeds, whose names are on the mortgage, whose names are on vehicle titles, etc.

You can show your appreciation by helping your parents get their estate planning in place so their wishes are implemented when they pass away, the state gets the minimum required by law and they don't leave a mess for you to handle.

In most states, all assets go to the surviving spouse. When the surviving spouse passes, all assets go into the estate, taxes are owed on it, heirs must buy assets from the estate if they want them and previous comments about heirs buying assets from the estate at below market value can have tax implications for the estate and the purchaser. All heirs must approve all sales and disbursements from the estate. Even apparently simple things can get complicated.

For example, when my father passed away the stock he owned passed to my mom. Her cost basis was the share price on the day he died and not the original purchase share price. The same applied to their jointly held property. My mom's cost basis of their home and property was the value on the day my dad passed away, not what they paid for the house 40 years earlier. Simple things like this can make a huge difference in both personal taxes the surviving spouse pays and the estate taxes.

Get an estate planner involved now.

 

[pmsmechanic]

One idea I've heard of would be to get life insurance on your Dad. Enough to cover the taxes and everything else should he pass away. That way you and his wife can at least continue on the way things were if he should pass on. For sure get legal advice.

 

[ESBkevin]

Your father needs professional estate planning. If you want to gift him something, that will be invaluable.
It might seem logical to assume the whole thing comes to you, but what if taxes strip out a significant portion before transfer?

Talk to your parents (both of them) about their plans and wishes, ensure your mother is secure in the event that your father passes first and vice versa. These are not always easy questions to ask or answer, but planning ahead gives everyone peace of mind and avoids pit falls later. Here in the UK you can use trusts as a vehicle for tax efficient generation transfer whilst leaving the older generation in control. Professional advice will be money well spent.

Your parents raised a good person in their own image.

 

[JamesHW]

++ on estate planning.

My mom inherited our property from her mother who in turn inherited from her uncle, who purchased the land, house & contents in 1905 for $500.00. She sold off frontage lots 5 in all, over the years to pay the taxes and keep the land from being taken. The town finally stepped in and said no more sales without a approved subdivision plan which we discussed an plotted a bit, but eventually nothing came from it. She allowed loggers in after that 30 years ago to get the tax money but eventually things got bad and she was going to lose the property to taxes in addition to other financial woes, so she approached us kids. My wife and I were the only ones interested in helping out, so we took over the taxes (and her finances as part of the deal) and consulted a lawyer to get us put on the deed as co-owners in the entirety with rights of survivorship. Also her will was amended to leave the property to my wife and I, although my lawyer said that wasn't even needed since we already owned the property. So twenty+ years of paying the taxes and upkeep and a lot of sweat equity have any doubts as to ownership within the family.

Growing up with the old family farm regularly going in the paper for late taxes made me aware of nothing is certain until it is done. I know people who expected to inherit land or other treasures who ended up with nothing because a valid will was not made. An old persons circumstances change and any assets can easily be lost to health costs. Or a spouse inherits and decides to sell everything to move to Florida. They say the only things you can reliably count on is death and taxes.

 

[Mace Canute]

This is not true.

'Deeding' it means the OPs father subdivided his property and sold a parcel to his son. The OP owns the parcel, not the father nor the father's mortgage holder.

Where did you get that highly erroneous idea??

 

[MikePA]

Because it's not erroneous. The OP clearly means his father was going to give (for $1) him a parcel subdivided from the land he currently owns, not give him the entire property. The son will own that parcel not the fathers mortgage company.

 

[dave1949]

Where did you get that highly erroneous idea??

It's true IF the deeded-over land is not encumbered by an existing lien. If there is a lien on the property then it cannot be given or sold because you can't give or sell what you don't own outright. Besides that, if a lien exists it would be removing some of the original loan collateral, which may or may not result in refinancing the original loan but that would something the mortgage holder controls.

 

[MikePA]

It's true even if the current property has a lien otherwise land owners could not subdivide their land until they owned it which isn't true.

I never said, nor implied, the OPs father could sell a parcel of land without notifying his mortgage company.