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In article . com,
says...

Todd H. wrote:
Legbuh writes:
Hi all!

Here's the situation. My folks currently live up north (ND) in a
condo. They are close to retirement and have always wanted to move to
AZ. Well, they recently visited and found some properties they are
interested in.

Their condo is worth about 130k, and they owe about 20k on it. The
place they are making an offer on is about 160k.

They are asking me to help them with this, as a loan, to get between
the two. I told them they'd probably be better off getting a loan
from a bank, sell the condo, then pay off most of the loan.

Instead they want to loan money from me (100k or so) and then pay me
back when they sell the condo in ND.

They also have said they'd like to put the new place in AZ in mine and
a brother's name so when they die there isn't a lot of headache. I
don't know if this is the best idea either.

So, for these two situations what options are there? I can afford the
loan, but not sure if I want to put a large portion of my nest egg up
for this. Also, not sure about putting the new place in their kids'
name. I know this means we'd pay taxes on it, in the least.

So looking for any ideas.

You and your parents really need to talk with a tax advisor, and/or
someone savvy in inheritance planning (a lawyer savvy in wills and
trusts for instance). There's a lot to this stuff, and it's really
easy to set it up stupidly without professional guidance.

Now, assuming you aren't worried about your parents making good on the
loan, and assuming your brother isn't a shiester and you trust him,
the only things you should be concerned with all have to do with
taxes. The concerns to balance out with the ultimate plan:

Taxes are the least of their problems. If they put the new house in
the two sons names, what happens if one of the sons has an auto
accident, seriously injures someone and incurs a judgement for more
than the limits on their auto policy? Or suppose a son winds up in a
messy divorce and the wife claims she has a stake in the parents home
that her spouse owns.

Add to that - is this one of those very rare families wherein, upon the parents
death or vacating this house for any othe reasons, the two sons will amicably
decide how to use the house? If they sell, would they amicably split the
proceeds? Or would one son, by perceived need or perceived involvement or both,
have very different expectations than the other son?

My mother got similar advice - "put everything in the kids' names, avoid
probate". We didn't go along with it. It's a recipe for family disaster.

Again, the is no federal tax on estates below $1.5mil. There are lots
of shysters out there advising people to do all kinds of crazy things,
for bizarre reasons, like the idea of avoiding public disclosure. Who
cares, unless this is some big mega estate? Thsi guy doesn't sound
like J Paul Getty. But look around and you'll find guys scaring
people and willing to take your money to set up all kinds of trusts you
don't need.

Yep - there's a lot of folks out there who will give elders all kind of advice
on how to game the system - as long as money gets moved around and fees charged.

Banty