DEAR BOB: Our dad left his house to us, his four daughters. We own it free and clear. We plan to keep the house as long as we can afford to do so. The land is very valuable. What happens when one of us dies? Should the remaining sisters have the right to buy out the deceased’s share? The second question involves our cost basis. Dad added each of us to his deed at different times. We think that means we each have a different cost basis. Is that correct? –Beth, Kathy, Sally and Diana J.

DEAR BETH, KATHY, SALLY AND DIANA: I’m sure your late father meant well, but he created a legal and tax nightmare. How is title held? If it was in joint tenancy with right of survivorship, that would be the easiest.

Purchase Bob Bruss reports online.

As each joint tenant dies, the survivors then automatically acquire the deceased’s interest. The will of the deceased co-owner has no effect on joint-tenancy-with-right-of-survivorship property.

However, if title is held as tenants in common, and each sister acquired title at different times, each sister then has a different adjusted cost basis. Also, each sister’s share is subject to that sister’s will, and title does not automatically go to the remaining sisters.

If title is not in joint tenancy but you are all in agreement, I suggest you consult a local real estate attorney to carry out your wishes.

An obvious possibility is to create an equal partnership, with a buy-out agreement. Partnership agreements are the most flexible way to hold title, whereas tenants in common and joint tenancy with right of survivorship are the least flexible.


DEAR BOB: My husband owned 50 percent of our house in his revocable living trust. I own the other half in my revocable living trust. He died last March. I inherited his half of the house under his living trust without probate. Do I need an appraisal to prove my stepped-up basis? –Cecilia B.

DEAR CECILIA: You need to establish the market value of the house as of the date of your husband’s death.

It need not be a formal appraisal. A local Realtor’s expert value opinion letter would be sufficient. Or, if the local property tax assessor reassesses each year and you are comfortable with his/her appraisal, that is also excellent evidence of market value on the date of death.


DEAR BOB: My husband and I own a house worth about $750,000. We need a reverse mortgage to help with expenses. But FHA and Fannie Mae will only give us at most a $61,402 lump sum or $400 per month. I am 68 and my husband is 71. These amounts seem extremely low. What should we do? –Judi C.

DEAR JUDI: When a principal residence is worth more than $500,000, the best reverse-mortgage lender is often Financial Freedom Plan (FFP). The reason is FHA (HECM) and Fannie Mae have low loan limits, whereas FFP has no maximum reverse-mortgage limit.

To find local reputable reverse-mortgage originators for all three nationwide lenders in all states, on the Internet go to More details are in my special report, “The Whole Truth About Reverse Mortgages for Senior Citizen Homeowners,” available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet delivery at Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center

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