DEAR BOB: Several times you have mentioned the “stepped-up-basis” rule for property inherited from a deceased spouse. The last time you mentioned this, you said a surviving spouse gets a new 50 percent stepped-up basis for property inherited from a deceased spouse, except in community-property states where it is a 100 percent stepped-up basis. Why the difference? Which are the community-property states? – David R.
DEAR DAVID: Community-property legal theory is that all assets acquired during a marriage belong equally to the husband and wife regardless of who earned the money to buy those assets. There are a few exceptions, such as assets inherited by a spouse during the marriage, and assets owned by a spouse before the marriage.
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In 1848, the Treaty of Guadalupe Hidalgo ending the Mexican War required the rights of Mexican citizens to be respected, including community property between a husband and wife. Community-property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
Please don’t ask me how or why Wisconsin adopted community-property rules a few years ago. Frankly, in my opinion all states should have community-property benefits for husbands and wives.
HOW CAN TITLE BE CLEARED OF LATE HUSBAND’S NAME?
DEAR BOB: My husband died in 1987. We owned our house together. Recently, I found a buyer for my house but the title insurance company refused to transfer title without probate court approval. Is there any way to avoid this hassle? – Agnes H.
DEAR AGNES: If you and your late husband owned title to your home in joint tenancy with right of survivorship, or in a living trust with you named as the surviving trustee, title transfer is very easy. The title insurance company officer should have explained the easy transfer method, which avoids probate.
But I presume you co-owned the house in another method, such as tenants in common. That means your late husband’s share of the house was subject to his will. If he died without a will, his share of the house passed by the state law of intestate succession, probably to you.
However, a probate-court action is usually necessary to transfer a tenancy-in-common title. Now you know why co-owners should hold title in a living trust or other method that avoids probate-court proceedings. For full details, please consult a local probate attorney.
PRIVATE NUISANCE CAN BE ABATED WITH A LAWYER’S HELP
DEAR BOB: I sympathized with that homeowner who wrote you several weeks ago about the adjacent Wal-Mart store where noisy trucks keep her from a quiet sleep all night. I had a similar situation where a big auto dealership (owned by a famous former football player) was built across the street from my home. The bright lights at night are so intense I can read in my living room with my house lights off. It was so bad I had to take out a home equity loan to pay lawyers to apply for an injunction to get the auto dealer to install light shields. I won. But the auto dealer is appealing. My advice to that homeowner who wrote you is to get together with your neighbors to sue Wal-Mart to get a court injunction to ban those noisy all-night trucks so you can stay in your home and its market value won’t be diminished – Dave C.
DEAR DAVE: The situation you describe is a private nuisance because it only affects a few property owners. If it were a widespread nuisance affecting many properties, then it would be a public nuisance to be abated by a government official, such as the city or county attorney.
Congratulations on obtaining an injunction against that inconsiderate auto dealer who disturbs the enjoyment of your home. The private nuisance you describe seems ideal for mediation to get the auto dealer to turn off, or at least turn down, his car lot lights after 10 p.m.
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