Considerations for Seniors

Senior clients have different needs that other investors. There are estate-planning issues, consideration of other family members, and possibly transitioning to other living arrangements. I am a Senior Real Estate Specialist (SRES) and have some real world advice for the mature crowd.

Estate Planning

Do you have a living trust? Are your properties in your living trust? This is super important. If an owner passes and the property is not in a trust, your heirs will have to go through the probate process, which takes time and cost a lot in court fees, probate administration fees, and attorney fees. If you do not have a living trust call me and I can give you three names of great estate planning attorneys that can help set you up with a living trust.

Do you live in the property?

If you are selling a property that is strictly a rental, than you probably don't have to worry about your living situation. However, if you do live in the property, you will have to address your new living situation. A lot of my senior sellers end up moving close to their kids. Others want to stay in the area but may opt for leasing instead of ownership. I have helped many senior clients relocate by either leasing or purchasing a smaller home or condo. I’ve worked with a lot of adult children of my clients to help Mom and Dad transition to housing here in LA if they want to stay. Some of my clients have been in their late 80’s and their kids were instrumental in working together with me to help their parents. If you do live in a property that you may want to sell, give me a call and let's have a conversation. I’m sure I will have many great ideas on how to take the next steps.

Capital Gains and Tax Planning

Most of senior sellers end up cashing out of their properties and not doing a 1031 tax deferred exchange in order to defer taxes. It is important to check with your CPA or tax preparer in order to get an accurate estimate of what you will have to pay both federal and state.

Capital Gain Alternatives

There are a few alternatives to selling and just paying your capital gains taxes. One is a Capital Gains Bypass Trust where you sell the property and put the proceeds in to a charitable trust you control. You will continue to receive monthly income from the trust for the remainder of your life.

Another alternative is a Deferred Sales Trust (DST). A DST that you set up with an attorney actually purchases the property from you and sells it to the end buyer. It allows you to invest all the proceeds from the sale and invest it and continue to receive income for the rest of your life and beyond for your heirs.

If you have any interest in some alternatives to simply selling and paying your capital gains taxes call me and lets have a chat. I will put you in charge with the attorneys and financial planners that work with seniors to help set up these specialized investment trusts.

Charitable Remainder Trusts

Charitable Remainder Trusts (CRT) remains a popular way for seniors to donate property and do well for society. Basically you transfer the property to a CRT. You pay no capital gains taxes when the asset is sold. You will receive lifetime income. If this is something that you might be interested in again contact me and I will put you in touch with the appropriate attorneys that handle Charitable Remainder Trust creation.

Title Issues

Owner who have owned a property a long time occasionally have title issues. For example, old mortgages that still show up, old mechanics liens, or erroneous tax liens. Sometimes a previous spouse or perhaps an ex-partner still shows up as an owner even though they relinquished ownership to the property years ago. Maybe a lien was placed on the property from a lawsuit. I have seen some pretty crazy things in my years. If you have a common name it is easy to have erroneous things filed against your property. Fortunately, I have a lot of experience helping owners clear title issues up. I work closely with my title company partner and we handle things and get them cleaned up.

 

Special Note to Adult Children

Are you tasked with helping a parent in transition? I can help you. First things first, I am very sensitive to your parents needs. 75% of my clients are seniors and I am very familiar with their particular needs and what they are going through. You can rest assured I will take great care of them and treat them with compassion. It's a big step for them to let go of a rental property that they may have owned for many years and maybe even lived in or raised kids in.

 

I've been selling real estate for 33 years and have experience with every type of property. I can handle complex deals especially when there are partnerships, complicated trust issues, multiple owners, litigation, financial planners, family problems, lawyers, CPAs, or whatever else is thrown my way.

 

Bottom line is that I do what ever it takes to get the job done. Whether it is arranging movers, finding contractors for repairs, trashing out a house, finding a handyman, solving title issues, stopping foreclosure, helping you parents transition to a new home, or whatever else it might take. I am a problem solver. Don't worry, I'll take care of it.

 

I still make house calls!

Sometimes the logistics of working with seniors requires a bit of extra effort. For example, I often make house calls to my senior clients who don’t use email or the web. Although many seniors use technology I still have clients that don’t use web or email. I am happy to meet clients at home to sign paperwork or explain things in person.

Many times I will be working with the adult children of my clients who want to be involved with the sale of a property because they want to make sure Mom and Dad are doing the right thing. This is quite common and I welcome input from not only family members, but also attorneys, CPAs, financial planners, and whomever my senior client feels confortable consulting with.

Feel free to reach out to me if you have any further questions at (310)308-3174.  The vast majority of my seller clients are seniors and as a Senior Real Estate Specialist I take my responsibility very serious to act in their best interests.

Derrick Ruiz