Q: Many people talk about how to get rid of a time-share unit. I went to a meeting where the broker wanted $4,000 to assist me. I left the meeting and did not pay anything. A nonprofit organization was having a fundraiser and auction, so I donated the time share to that organization. It sold for $800.
The bidder was happy; the nonprofit was also happy because it received the $800; and I received the tax deduction by way of a statement from the auction organization.
A: You may have been lucky, but let me ask a question: What happens if the successful bidder decides not to make any payments to the time share — either the monthly (or quarterly) assessment or payments on the promissory note that you signed when you bought the timeshare?
Your bidder did not sign any legal documents with the lender/time-share developer, so he may not be liable should he be sued. But you signed the documents, and you can be sued.
Furthermore, many nonprofit groups are unwilling to take over a time share, even if it is only to try to auction it off.
So be careful and under no circumstances should you give anyone any money upfront. If you opt to hire one of these “time-share finders,” enter into a written contact that states, “I will pay you when you can confirm that you can rid me of this time share.”
Q: My husband and I have wills leaving our house and a separate lot to our sons upon our deaths. Will these go to our sons without having to go through probate?
A: It is always difficult to answer a question where state laws are involved, as there are a lot of different approaches. However, in general, your sons will have to probate your estates.
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I suggest you ask the attorney who drafted your wills this question and also ask if it would make sense for you to put the properties into a trust. If properly drafted, and if all properties are in fact formally deeded into the trust, this should avoid probate.
You should also ask your lawyer what the fee will be for creating a trust. In some cases, going through probate is easier than having to deal with trust documents.
Let your sons deal with probate.
Q: My partner and I believe we will make a large profit on the sale of our home. Can we each take the up-to-$250,000 exclusion of gain?
A: Assuming you both own 50 percent of the house, if you meet the ownership and use tests, you both can claim up to the full $250,000 exclusion.
To qualify, you both must have owned — and used (lived in) — the house for two out of the five years before it is sold. Use does not mean continuous; you certainly can take a vacation. However, if your absence is too long, the IRS may challenge your exclusion.
It does not matter whether you both own the property 50-50 or in a different split.