DEAR BOB: My brother and I purchased a beachfront condo as tenants in common. We realize this set-up makes each of our halves of the condo go to our heirs upon the death of one of us. However, what we both would really like to happen is for the surviving brother to have the right of first refusal to purchase the other half of the condo from their heirs of the deceased brother. In both of our situations, our heirs are adult children. Is there a way this can be done? – Rex H.
DEAR REX: Yes. Your wish is easily possible. However, your current method of holding title is very dangerous. If one of you dies before the problem is fixed, you (or your brother) could wind up owning half of the condo with the late brother’s adult offspring if they are specified heirs in the deceased co-owner’s will.
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Worse. Those new co-owners could force a sale of the condo. It’s called a partition lawsuit.
Please immediately consult a local estate-planning attorney. I suspect he or she will recommend holding title to the condo in a joint living trust where you both can express what you want to happen, such as that buy-out arrangement, when one of you passes on.
NO EASY RECOURSE AGAINST “SCUMBAG MORTGAGE BROKER”
DEAR BOB: About a month ago, I heard a radio ad on a Spanish station from a mortgage broker. He advertised no up-front cost, no appraisal fee, no this and that. I phoned him. Everything sounded good as I wanted to refinance to lower my home loan interest rate. I gave him all my income and expense information over the phone. He said I would have an answer within 24 hours. Although I did receive “loan approval” within 24 hours, it was for a totally different loan than we discussed. The mortgage broker’s fax of his “good faith estimate” of loan costs was much different than what we talked about. Without my approval, he unexpectedly sent an appraiser to my house. The appraiser wanted a $350 appraisal fee, which I stupidly paid in cash. The appraisal was much lower than my home’s market value (I know recent neighborhood sales prices of similar homes). I’m out the $350 fee for a bad appraisal and this scumbag mortgage broker threatens to sue me for his loan fee. What can I do? – Juan P.
DEAR JUAN: Report the facts you stated to your state agency that regulates that “scumbag mortgage broker.” He should be put out of the mortgage business. Unfortunately, a few mortgage brokers prey on individuals who feel comfortable speaking in a foreign language. But don’t feel bad. Similar mortgage rip-offs occur in English, too.
As for your $350 appraisal fee, you could sue that bad appraiser in local Small Claims Court for breach of contract or fraud if you can prove the appraisal was inaccurate based on comparable recent nearby home sales prices.
SHOULD REALTY INVESTOR HAVE ONE OR SEVERAL LIVING TRUSTS?
DEAR BOB: I’ve been enjoying your educational real estate articles for at least 25 years. But now I have a problem. I own three rental houses and my personal residence which I want to leave to my kids. But not in “share and share alike” amounts. Should I create a living trust for each property separately with a surviving beneficiary? Or can I have one living trust and include all four addresses, each with a different provision for who gets what? One child will need more financial help than the others. What do you suggest? – Elly W.
DEAR ELLY: Thanks for your readership loyalty. It’s wonderful to hear from long-time readers like you who have benefited from these articles.
Either one living trust to hold title to all your properties, or a separate living trust for each property, can accomplish your goals. You can amend a living trust as often as you wish, such as when a living trust beneficiary has a personal situation which changes the desirability of an inheritance.
There are so many living trust flexibility advantages, compared to holding title as “joint tenancy with right of survivorship,” I can’t begin to list them all. More details are in my special report, “Living Trust Pros and Cons for Avoiding Probate Costs and Delays for Your Heirs,” available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.
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