Dear Liz: I would like some advice on transferring an apartment to my son or grandchild. It seems like I don’t have much life left, so I need to clearly understand what is better for me and for them. All articles are very difficult to understand. Can you advise me whether it is better to transfer on death or some other form of transfer that can avoid probate?
answer: Transferring your condo while you are still alive is probably not a good idea. That’s because the tax base of your estate won’t increase in your favor when you pass away. If you don’t take this step, your heirs may be liable to pay capital gains taxes on any appreciation that occurred during your lifetime.
You can also leave property to your heirs in a will, but in that case the property must go through a court process known as probate. Probate is not a big deal in many states. In other states, including California, probate is time-consuming and expensive and is worth avoiding.
A living trust is often the best way to transfer your estate to your heirs without probate, but the costs can be high, at more than $2,000.
If your condo is your only asset, a deed on death may be an easier and cheaper way to pass the property to your heirs. Many states now offer this option, and you can often find the form by searching for “transfer of death certificate” and the state name. Your county clerk’s office may also have a downloadable form. Typically, for a deed to be valid, the form must be notarized and then filed with the county property records office.
Find an affordable fee-only financial advisor
Dear Liz: You always insist on hiring a fee-only financial advisor. But where can you really find it? People who claim to be fee-only, when you dig deeper, find that they are actually “wealth management” advisors, and the cheapest fee-only advisor I’ve found costs him $6,000. I just want you to review my financial plan and help me create a retirement investment portfolio.
answer: The “assets under management” model (where the advisor charges around 1% of the portfolio in exchange for financial advice) is probably the most common fee-only arrangement. But there are others.of garrett planning networkFor example, represents a planner that charges by the hour. XY Planning Network and General Planner Union We introduce planners that charge maintenance fees.
Liz Weston is a certified financial planner and personal finance columnist in the United States. Nerd wallet. Questions can be directed to 3940 Laurel Canyon, No. 238, Studio City, CA 91604 or by using the “Contact” form below. askrizweston.com.
