October 7, 2025 • 36 mins
On today’s episode of The Jon Sanchez Show, Jon is joined by guest hosts Cory Edge of Edge Realty and Dwight Millard of Highlands Mortgage to explore what happens when you inherit a home.
With the largest wealth transfer in history underway, trillions of dollars in real estate are expected to move from one generation to the next over the coming decade. Together, Jon, Cory, and Dwight discuss the key financial, tax, and emotional considerations that come with inheriting property. Should you keep it, sell it, or rent it?
The trio examines the pros and cons of each option, along with how these choices fit into broader wealth management Reno strategies, including real estate planning, mortgage decisions, and long-term retirement planning.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
With the largest wealth transfer in history underway, trillions of dollars in real estate are expected to move from one generation to the next over the coming decade. Together, Jon, Cory, and Dwight discuss the key financial, tax, and emotional considerations that come with inheriting property. Should you keep it, sell it, or rent it?
The trio examines the pros and cons of each option, along with how these choices fit into broader wealth management Reno strategies, including real estate planning, mortgage decisions, and long-term retirement planning.
👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com
Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
M hmm.
Speaker 2 (00:07):
Good Tuesday afternoon. Welcome to the John Sanchez Show on
News Talk seven to eighty. Wait, it's a pleasure to
be with you and a pleasure to be with my
co host Around the hornet, we shall trouble Corey individual
big c Is.
Speaker 3 (00:17):
I like you.
Speaker 4 (00:18):
I'm doing great.
Speaker 3 (00:19):
How are you doing very well? Thank you?
Speaker 4 (00:21):
All right?
Speaker 3 (00:21):
Well, mister Dwight Millard Highland's mortgage? How are you?
Speaker 5 (00:25):
No complaints?
Speaker 3 (00:26):
John, I can see the look on your face. Don't
tell you that you're I can see it.
Speaker 4 (00:31):
I'm gonna have one complain.
Speaker 1 (00:33):
Yeah, yeah, but nobody listens anymore, right, right, complain all
you want. Everybody's going, hey, I'll want up you right exactly.
Speaker 2 (00:41):
Have you noticed that the older you get, that less
people want to hear about your problems?
Speaker 1 (00:44):
You know?
Speaker 4 (00:44):
Yes?
Speaker 3 (00:45):
Yeah, yeah, I know.
Speaker 4 (00:46):
I know.
Speaker 5 (00:47):
It's like because there's lots of them, right, Yeah.
Speaker 2 (00:49):
They don't hesitate to come to us with their problems,
but they don't want to hear ours. See, you make friends,
make friends with AI, and you.
Speaker 3 (00:56):
Don't need a human being.
Speaker 4 (00:57):
That's right, that's what they're saying.
Speaker 3 (00:59):
I guess you know. Yeah, I love it.
Speaker 2 (01:03):
I love it, Alrighty folks, Well, thank you so much
for joining us this afternoon. We do appreciate it. We're
gonna make this next hour very much worth your while.
We're gonna recap the stock market very quickly here in
a moment. But first let me tell you our topic
for this afternoon. Here's the title. You just inherited a home?
Now what you're thinking? Oh man, what do you mean now?
Speaker 4 (01:22):
What? Now?
Speaker 3 (01:23):
I'm gonna get a whole bunch of money, right, find
means like hitting the lottery?
Speaker 2 (01:27):
Well, hold on, you know, to say, the biggest wealth
transfer in history, in history, folks, is going to be occurring.
And they're right, it's already started. It's already started. Over
the next ten years, trillions of dollars and property is
going to pass from one generation to the next. But
(01:47):
the question is what should you really do, really do?
And I underline that word really If you inherit a home,
do you keep it? Do you sell it? Do you
rent it out? Well, today, myself and the boys are
gonna through the financial, the tax and the emotional decisions
that can make or break your inheritance. And we all
(02:08):
deal with this on a regular basis by all means,
especially Corey and you know, this is a discussion that
we have that takes you know, in real life, I'm
talking that takes Corey a lot of fact finding, right
you know. We I was telling someone today the typical
scenario I get, and I'd love to hear yours very quickly,
(02:29):
is you know, the kids inherit the property.
Speaker 3 (02:31):
You know, you got one parent left, that parent dies, you.
Speaker 2 (02:35):
Got the property now and two out of the three siblings,
let's say they want to keep the property, and you
always have that one sibling that says, no, I want
to be cashed out. And then those two siblings go, well,
wait a minute here, that's not what mom and dad wanted. Right,
we have family memories here, we all grew up, we
had Christmas here, No I want to be cashed out.
So then those two siblings go, I got a call
to White and refinance this thing to get some cash.
(02:58):
And then I mean it goes on and on from there, right, Cory.
Speaker 4 (03:03):
It does, and it goes we'll go into the points,
but then you go to what is the structure somebody
passes away. If they have a trust, then the structure
of what's supposed to happen will be in the trust.
If they don't, then you get to go to probate
court more than likely and get up to a judge.
And so every beneficiary has a certain amount of rights,
and if it's a trust, those rights will be kind
of spelled out. If you go to court and have
(03:28):
to go through that probate scenario, then they all, I think,
And I might be wrong to say I'll have equal rights. Right,
So does one always trump the other? No? But you know, John,
and I'm sure you've seen it too. I've seen siblings
and I deal with them all the time that are
the best of friends. As soon as mom and dad,
as soon as the last parent is gone, here come
the attorneys and here comes the fight and it gets nasty.
(03:51):
And it's unfortunate that it happens that way, but not
every single time, but most of the time that's how
it goes.
Speaker 3 (03:57):
I just told that to a client this morning.
Speaker 2 (04:00):
We're doing a review, and I said, they we're gonna
get their living trust up to date and are actually created.
Speaker 3 (04:06):
They don't even have one.
Speaker 2 (04:07):
And I said that exact same thing, Corey, I said,
I have seen the best of you know, siblings break
apart because of financial right. And so once again and
that's why, you know, we do so many shows and
we'll be doing many more on the importance of a
state planning because that can be avoided through proper state planning,
proper titling, having written instructions IEVA living trust or revocable
(04:28):
living trust, having those instructions written out. You know, Dwight's
gonna get this portion, Corey's going to get this portion.
John's going to get this portion. And by the way,
as I told this client, you guys know this if
you can test it, Dwight, if you can test you know,
Mom and Dad's a state.
Speaker 3 (04:42):
Guess what you're gonna get one dollar thing?
Speaker 2 (04:44):
Right, Well, you get a dollar, you get a dollar,
you get it. I think legally they have to have
a dollar in there, but you get a dollar, and
so that stops a little bit of it. But it's
a it's a tough situation because you go from this emotion.
Speaker 3 (04:55):
I've seen it with clients.
Speaker 2 (04:56):
You go with it from the from the emotion like okay,
you know, yeah, mom and that are gone. You know, boohoo,
who wow, Mom and Dad owned this million dollar house
free and clear. And it's me and my sister, right,
So we're gonna get half a million dollars each. Well,
hold on, right, there's a lot of things and that's
what we're going to cover today. There's a lot of
things that we're gonna We're gonna kind of be starting
this off by talking about the reality of it.
Speaker 3 (05:17):
Right. It's not as easy and as simple as you
think it is. But hopefully you have a great understanding.
I know you will not. Hopefully you're gonna have a
great understand by the time the show's done. Dwight, did
you do you have any personal stories you want to
share real quick?
Speaker 5 (05:28):
No, except for you know, the family thing is is real?
Speaker 4 (05:33):
Right?
Speaker 1 (05:33):
I mean, I guess the question I would have and
we can do this an now or later. But in
a trust, the trustee do they carry more weight than
a normal sibling.
Speaker 4 (05:46):
The I'm not an attorney, John's not an attorney, but
the trustee, the success or trustee, if you will, is
supposed to carry out the function of the trust. They
don't get any more where with all to do this,
do that, anything else. They have the same rights as
the other beneficiars, because typically they are a beneficiar. But
and John, tell me, if you see this too, I
(06:08):
see a lot of times where it's usually the eldest
son or something like whoever the parents thought had the
more financial you know whatever. The parents will lay it
out and maybe once they're gone, that person says, eh,
I don't necessarily agree with this, and they'll start going
down a different path. Then you have to get into court,
unfortunately and force them back onto the path that mom
(06:29):
and dad wanted them to go.
Speaker 2 (06:31):
Right, Because to your point, Dwight, let's just real quick,
let's use the three of us at is exemple. Okay,
we're brothers, and let's say we're gonna inherit a million
a million dollar paid in full property. Right, So mom
and dad selected me to be the trustee or would.
Speaker 3 (06:44):
I become the executor? Right?
Speaker 2 (06:45):
So mom and Dad died, and let's say they wanted it,
you know, thirty four percent to me, thirty three to you,
thirty three to Corey. Okay, so pretty simple, right, But
what if Corey goes man? You know, I remember back
on my twenty first birthday, Dad and I were sitting
around and having a couple of beers, said, hay Son, you're.
Speaker 3 (07:01):
My favorite son.
Speaker 2 (07:01):
I'm going to give you fifty percent, and maybe he
even wrote it down.
Speaker 3 (07:05):
That's what Corey's talking about, Dwight.
Speaker 2 (07:06):
Where these things, even with a trust right, these things
can go sideways. But I, as the executor and the
one that's legally obligator, remember that I'm legally obligated state
to adhere and follow the wishes of mom and Dad
in this trust that they wrote out. If I don't
do that, now, guess what, Dwight, you consume me, Corey
(07:27):
consume me right in anybody else because I'm not following
quote the letter of the law via the trust. And
so that's where it gets really messy. And then Corey, right,
we can go down this rabbit hole real quick. Hey,
you know what, as I was telling this this this
client today, I've seen and I know you guys have too,
I've seen it to where the estate is such a mess,
when there's a lot of real estate involved that that
(07:48):
that executor I all use myself in this example has
to quit their job, right because there's so much involved
in this liquidating of the of the real estate, the
stock market accounts, the accounting of the distribution, et cetera.
Speaker 3 (08:02):
I don't have time to work my normal job.
Speaker 2 (08:04):
So guess what I'm going to quit my job and
I'm going to just focus on mom and Dad's estate
for the next year. Well you know what, I still
got to eat. So guys, I want you your i e.
The trust or the estate. I want you to pay
me five thousand dollars a month and going Mike, Hell,
we're gonna do that. It's not in there right right,
And it's it's.
Speaker 4 (08:22):
It's interesting you bring that up, because if you're going
to get paid, it has to be in the trust.
And if it's not mentioned in the trust, you can't
do it, and less a judge allows it. So most
trusts will say yes or they'll say no. And that's
one thing has a beneficiary. If you're not the person
in charge, that's one thing you want to look at.
So you should have a copy of the trust, even
(08:42):
if you're not in charge, because you have the right
to read it. And yeah, trust me, the courts are
packed with these little arguments back and forth, and you know,
I'm dealing with one right now for one of our
attorney clients. And the court basically took jurisdiction over the
trust because there were the issues were so oh so
they're fighting so bad. The court said, we now are
(09:04):
going to be in control and we're going to dictate
how this rolls. And they're doing it, you know, in
accordance with the trust.
Speaker 1 (09:10):
Yes, yeah, But if you take John, if you take
that scenario, and let's say Corey and I are really
close brothers, yes, and we don't you know particularly way
like the way you're interpreting the way Mom and Dad
can two out of three trump, I mean.
Speaker 4 (09:26):
Through a judge, through a judge, but you can't just
do it on your own, correct.
Speaker 3 (09:29):
And you don't know if you're gonna win with a judge.
But no, by your own beganging up against me two
on one. Nope, yep, that's why you have a trust.
Speaker 2 (09:36):
That was the That was the uh, you know Dad's
example or Dad's wishes in our example that he wanted
that money to be split thirty four to thirty three
thirty three, and then you come back to w and go.
You know what John is You know, a couple of
years have gone by, where's my money? And matter of fact,
I don't think you've been spending the money correctly, you know,
keeping the bills up and all this stuff. So I
request an additive financial statement of the trust of the estate.
Speaker 3 (09:58):
Corey shaking his head. Yep, yeah right.
Speaker 2 (10:00):
And then do you think I'm going to like you
anymore as my brother when you start accusing me of
stealing money?
Speaker 3 (10:05):
Nope? So now here comes the in family fighting.
Speaker 5 (10:09):
What do you think the just off topic?
Speaker 1 (10:11):
What do you think the percentage of this goes to
a court question?
Speaker 3 (10:15):
I have no idea. How about you, Gravy.
Speaker 4 (10:19):
I think I don't know what the number would because
I think the vast majority of them settle before they
get into the point where a judge has Judges don't
like to make decisions. They want people to figure it out,
and so a lot of times the threats back and forth,
and especially if you're that success or trustee, you're like,
oh man, these guys got a point, and your attorney's
(10:39):
going to figure that out. He's gonna be like, you
might want to settle this out or douce them because
as that success or trustee, and we can get into later,
but you have a higher burden, You have fiduciary duties.
You can get in big trouble. It's not just like
slap on the wrist and give the guy five bucks. No, No,
you've got some major problems if you are doing bad things.
Speaker 2 (11:00):
Yep, yep, you got it, and usually siblings will find out.
Speaker 3 (11:03):
If you are or excuse you of it. We all say,
in that.
Speaker 2 (11:07):
So very complicated topic, we're going to try to simplify
it with a lot of things to talk about. So
we're gonna come back to a quick recap on the
market and not a lot happened today, a little bit
of weakness. We'll tell you what the reasons were, and
then we'll get into our topic. You just inherited a home,
now what? Sturn over to Christen snow right now traffic Center.
Hello Kristen, Welcome back to the John Sanchez Show on
(11:28):
Newstalk seven eighty ko h to Corey In's evdrility to
White Mallard of Highlands Morgas.
Speaker 3 (11:32):
Once again our topic, You just inherit a home? Now what?
Speaker 2 (11:35):
But before we get to that, let's recap the market
real quick. Tough day to day. I just could not
get any traction ninety two point loss on the down,
down point two zero percent to forty six thousand and
six oh two, as I gave up one hundred and
sixty three point six to seven percent s and p
lower by twenty six points about a point three eight
percent decline.
Speaker 3 (11:53):
What was the problem that was the issue. There really
wasn't anything.
Speaker 2 (11:56):
There was no specific, real negative news on anything.
Speaker 3 (11:59):
Today.
Speaker 2 (12:00):
I think investors are getting a little concerned, you know,
with this dragon. What are we going into date eight? Now,
today was day seven of the government shut down. I
don't know if you guys saw this or not. I
mentioned this on my stock update this morning. Bloomberg reported
at eight o five this morning in the Pacific Standard
time that the Trump administration is considering not not paying
(12:20):
furloughed government workers because they said, the last time we had,
you know, the government workers gone furloughed, they put a
provision in the in the in the the rule slash
law that said, after and I'm going to paraphrase, after
a government shut down, there has to be a certain
provision in the new rule that says, Okay, these employees
(12:44):
can come back and they get their back pay.
Speaker 4 (12:49):
So it's not automatic.
Speaker 2 (12:50):
It's not automatic. That's what everybody said, like, you got
to be kidding me. So now, I don't know. I
mentioned this to Ross this morning. The market seemed to
roll over right after that news came out. I saw
nothing in any of my sources indicating that that was
a specific reason. I don't know if was this a
coincidence or what, But can you guys imagine what a
(13:10):
disaster that would be GDP wise, right, because remember we
lose one tenth of GDP for every week the government
shut down. So now we've already been shut down a week,
we lost one tenth. Can you imagine if all these hundreds,
you know, almost a million people, right, what seven hundred
and eighty thousand something like that, don't get paid while
they're gone, and you know, do iight, how for giving
(13:32):
their lenders under a shutdown like this.
Speaker 5 (13:35):
Well, I don't think they are at all.
Speaker 1 (13:37):
You're in a contract. I mean, we don't want to
get back into that again. Right, Skip three payments and
we'll talk to you, right. You know, that just doesn't
make sense. But it's going to be interesting, John, because
I think what they had to vote at last night,
I think to approve it in order to get paid
this next.
Speaker 5 (13:52):
Pay period, right, right, So they're not going to get there.
Speaker 1 (13:55):
They're not going to get paid, right, And that's when
it's really going to start to Matt.
Speaker 5 (14:00):
Yeah, it's really going to start to matter.
Speaker 1 (14:02):
And you know, I think It was kind of interesting
how the Trump administration did kind of pivot a little
bit and now put it all back on. It feels like,
you know, the Senate and in the House, you know,
going hey, yeah, this is in there. I mean so
now I don't know, I mean, eventually they're going to
(14:22):
get it resolved.
Speaker 5 (14:23):
But this, this is, this is getting problematic.
Speaker 1 (14:25):
I mean, of course, now I have my first us
D A loan, right and they're not even open. Right
of course, isn't that just Murphy's law? So you go
on the site and it says, sorry do to you,
we're in on USDA. Sorry, government closes down.
Speaker 2 (14:39):
So so when you go to the USDA site, what
what what's the.
Speaker 5 (14:42):
The you can't get in? You're just sorry?
Speaker 3 (14:44):
Is what does the email say?
Speaker 2 (14:45):
Because it seems like every government entity has a different response.
Speaker 5 (14:50):
It was just like, do the government shutdown? We are
unable to didn't blame it.
Speaker 3 (14:54):
Just so we're not hilarious, absolutely.
Speaker 1 (14:57):
I don't know, but yeah, but it's just gonna you
you said it perfect. The longer this goes, the.
Speaker 5 (15:03):
Tougher it's going to be. It's gonna be tough. It'sould
be tough to unwind it's gonna be tough. Yeah, they've
got to get this figured out well.
Speaker 2 (15:10):
And then, of course we heard today for those of
you that are traveling that a number of UH air
traffic controllers are calling in sick. They're not reporting because
they're not getting paid. Like I'm sick to the I'm
not coming in. So air travels really starting news, you know,
slow down dramatically.
Speaker 4 (15:27):
Uh.
Speaker 2 (15:27):
There was I guess yesterday Burbank Airport. They went like
three or four hours with no air traffic controllers. The
air traffic was being directed out of San Diego, out
of the Air Traffic Control Center in San Diego.
Speaker 3 (15:38):
That's scary. That's scary.
Speaker 2 (15:40):
And then and then you had the Transportation secretary on
CBC this morning, gone, hey, you know it's all right.
Speaker 3 (15:45):
Safety is all these.
Speaker 2 (15:46):
First I'm like, oh boy, you know, sorry for anybody
that's having that travel right now.
Speaker 3 (15:51):
I really do.
Speaker 2 (15:52):
Quickly, let's let's hit the mortgage because I've got a
question I want to throw your direction regarding zombie mortgages.
I read a fascinating article. We'll go to break and
then we're going to come back and tack list. So
where do we finish out on the thirty year today.
Speaker 1 (16:04):
So right where we kind of left off last week,
six point three to eight on the thirty year fixed mortgage.
I mean that's six point three nine six point three,
that's where we're at, five point nine zer on the
fifteen and then the fahava is or six point eight
and six ten.
Speaker 5 (16:19):
So I mean, no movement. But it's interesting after our last.
Speaker 1 (16:22):
Conversation last week, John, I'm getting more and more questions,
especially from builders and Miltor's saying, what is going to
take to get these rates down? You know, John Ida, Yeah,
I mean, who's going to go buy this sleepy little
bond over there?
Speaker 3 (16:38):
Nobody?
Speaker 2 (16:38):
Yeah, And that's stock market corrects then and you'll see
larger allocation.
Speaker 5 (16:43):
But being a businessman, is there is there a way?
Speaker 1 (16:46):
And I'm just trying to think outside the box where
Trump could create some energy in the ball mark, where
people would want to buy bonds for any reason.
Speaker 3 (16:56):
There could be. I could give you a million.
Speaker 1 (16:58):
Reasons, Okay, okay, So there's okay, yeah, okay, yeah, not
just the government, because that's what we did the first right, right,
we don't want to use.
Speaker 3 (17:06):
The governments, how do you? Yeah, Governent's gonna have to
be behind it. But yeah, I could think of so
many ways.
Speaker 1 (17:10):
Okay, so there are some little tools out there that
could Okay, absolutely.
Speaker 2 (17:14):
Yeah, they just don't feel there at that point yet.
All right, tenure yield today? To Dwight's point, I'm surprised
you didn't budget all Dwight on the thirty year, you're
down four basis points on the ten year, you know,
at yield of four thirteen?
Speaker 3 (17:25):
Uh real, quickly, doight? I got to throw this in.
Just give me about a minute or two answer for
you would be so kind.
Speaker 2 (17:31):
There's a great article in uh Bloomberg or stus with
Wall Street Journal today and it's talking about zombie mortgages.
Speaker 3 (17:40):
And it's been a long time.
Speaker 2 (17:41):
We need to do a show on this because I
found it very fascinating. But I want to see what
your experience is. So this is if folks, if you
don't know what a zombie mortgage is. So do I
just mention about, you know, the financial crisis, right, so
you go back to the financial crisis O eight oh nine.
You know, you'd get a loan first, and then let's
say you get another whatever one hundred and twenty five
thousand and for a second to make up that entire
(18:03):
amount duce so you don't have to come out so
much out of pocket. So far, so good, right, right, Okay,
Now that second mortgage, really the financial crisis happens that
second mortgage, as we all know, balloon came do or
your new term with a higher interest rate kicked in.
That's what called when the results of the financial crisis
of wait or night. People couldn't do it, so you
(18:24):
let that second go. So many companies came in and
issued at ten ninety nine. I remember Corey talking about this,
issued the ten ninety nine. See I believe it is
where the lender on that second forgave the loans, like
you know, your house is not worth it. You're saying,
you can't afford it, So they write it off and
then what they do is they turn around.
Speaker 3 (18:42):
And sell it to collection agencies.
Speaker 2 (18:44):
So let's say they just wrote off this one hundred
and twenty thousand dollars second mortgage. Homeowner goes, hey, I
got the ten ninety nine and right, Corey, they had
to pay tax.
Speaker 3 (18:51):
On that money. Absolutely, okay, forget now, So now they.
Speaker 2 (18:54):
Pay taxes on it and they don't hear anymore. They
don't get any statements from the lender, Dwight, they don't
get any thing. And then all of a sudden, Now
what's happening. These these these collections are buying these loans
for like two or three thousand dollars, right, one hundred
thousand dollars plus loan that was written down. They're buying
(19:14):
it for like two thousand dollars. I mean literally since
on the dollar. Now they're going back after these people
saying you owe this money? I mean how I again,
I want to do a whole show on this at
some point.
Speaker 3 (19:26):
But have you heard anything to Wight? Is this prevalent?
Because this article made it sound like it's really starting
to raise its Yeah.
Speaker 1 (19:32):
Well you know those collection companies are out there buying anything, yes, right,
because they know they have you held hostage. Whether than
that they can collect or not, Corey, correct me if
they you know, if it's.
Speaker 3 (19:42):
In many cases they are, Yeah, they are collecting.
Speaker 5 (19:44):
They have the legal right tip.
Speaker 3 (19:47):
Yeah in some states they do.
Speaker 1 (19:49):
So if they do that changes, but if they don't, Hey,
what do I care about it?
Speaker 5 (19:52):
For two thousand and three? You you're they will settle
at some point. Tell me you the consumer, because you've
locked them down.
Speaker 4 (19:59):
You you can't do anything.
Speaker 2 (20:00):
So some of these these clutch stencies are generating over
a three thousand percent return.
Speaker 5 (20:08):
As if it wasn't bad enough.
Speaker 2 (20:09):
Back that's what these people are saying, Like, my god,
I'm reliving hell again.
Speaker 1 (20:13):
You know we said this, We said this though back then,
remember that, Corey, we talked about the these seconds are
going to resurface at a different point in time in
a different way.
Speaker 4 (20:22):
Well, yeah, typically I didn't read the article, but typically
when the first lender writes it off, you get a
ten and and you pay the tax. It's done as
far as your concerned. Now, they don't do what's called
reconvey it, which gets it off of the public record,
so it stays there. So then somebody's got to go
clear it up. So I g. If that were to
happen to somebody I know or me, let's go to court,
(20:43):
because you can't. That's double dipping. You can't double dip
on that. And and there have been investment strategies. A
couple guys here locally pushing stuff, Oh, we can buy
all these seconds, knowing that maybe you're only going to
collect on one or two percent of them, not because
you have the right to. But because people get panicked. Yes,
what's happened, But that's the bet, right, Like, Okay, well,
I'll spend one hundred thousand, and if I can get
(21:05):
two of them to pay me one hundred and fifty thousand,
that's a great return, you know so, But yeah, it's
it's a slime ball way to mind.
Speaker 3 (21:13):
Man oh man.
Speaker 2 (21:14):
All right, guys, thank you for that deviation there. Let's
turn it over to Jack Sabing. He's got news, traffic
and weather. Hey, Jack, welcome back to the John Sanchez
Show with Newstalk seven and eighty K, which the Cory
has eventuality to White mallart of Highlands more years once again.
A ninety two point decline on the down lower by
one fifty three on the nasdack can I pulled back
up twenty six on the SMP. All right, you hit
the lottery, you inherited a home. Now what is it
(21:37):
all fun and games and profitability? I hope it is,
but it may not be. And that's what we're here
to tell you about this afternoon.
Speaker 3 (21:44):
I'm gonna start off with some stats, guys.
Speaker 2 (21:47):
According to Sorelli Associates, Okay, let's talk about the great
wealth transfer. According to Cirelli Associates, eighty four trillion dollars
in assets is expected to pass down through the States
between twenty twenty four and the year twenty forty five.
Eighty four trillion dollars of that sixteen trillion is going
to transfer within the next ten years. Roughly half of
(22:10):
this wealth is tied to real estate, particularly in California, Florida,
Texas and other high appreciation areas. Forty five percent of
American age fifty five plus own their home outright. Many
millions of properties are going to soon change hands. And finally,
a Fidelity survey found that one in three inheritors sell
an inherited home within the first year, often without understanding
(22:33):
the tax implications. Okay, let's start with some reality, folks,
the emotional side.
Speaker 3 (22:38):
You just lost the love one.
Speaker 2 (22:39):
Let's just say it was you know, mom was the
final remaining parents A mom just passed. Then you have
to make a major financial decision quickly. Right, You just
got this house, got bills, you got to pay on it, right,
even if it's paid off.
Speaker 3 (22:51):
You got property taxes and utilities, et cetera.
Speaker 2 (22:55):
But why this whole area is really becoming so very
popular that we need to talk about. It is because
the Boots my generation, in Dwight's generation, we are the
last year of the boomer generation. We hold over fifty
percent of us household wealth and much of that, as
I just said, is tied up in wealth. Okay, Corey,
let's get down to the action. What are the immediate
(23:16):
steps that someone needs to follow after they inherit the
home they has found out you know, trust, reading up
a will, whatever it is you just inherited this. Let's
pick a hypothetical value. Let's say seven hundred thousand dollars house.
Speaker 3 (23:29):
What do we do?
Speaker 4 (23:30):
The first thing that you need to do is figure
out how that is titled. Is there a trust or
is there not a trust? Meaning you're probably gon to
go through probate even if there is a trust and
you're the smartest person that you know, but you have
no legal background, you need to have an attorney. And
in a lot of cases, John, it's the attorneys or
the attorney shop that drafted the trust. Go back to them.
(23:53):
Talk to them so they can explain. Not all trusts
are created the same. They all have different little provisions
here and there. And it's not as if Hey, I
read a trust five years ago, so I already understand
how this works. These things are some can be incredibly complicated,
some of them are pretty easy. But you need to
have a third party, be it an attorney, a CPA,
somebody with an understanding, to explain the trust to you.
(24:16):
But the first thing I always do when I get
a phone call, and I get these calls a lot,
they say, hey, you know my dad just passed away.
Somebody gave me your number, or think we might sell
the property. The first question to ask is is it
in a trust or Usually I'll go to the assession.
I'll find out ahead of time. But is it in
a trust or is it not in a trust? Because
that's going to determine which path we have to go
to right away? Probate not probate either way. My recommendation
(24:39):
is always have an attorney involved to get you through it.
Speaker 2 (24:42):
Let's say let's say that it is going to go
the it's just owned in mom's name, mom's past, We're
going to go to probate.
Speaker 3 (24:50):
What's the path.
Speaker 4 (24:52):
Again, my recommendation is have a good probate, a state attorney,
start the process, get you through the process, have to
notify the creditors, you have to notify the other beneficiaries.
You have to take an inventory of what's there. If
there's a will, I think it will name who's gonna
do these things. But if there's not, then the court
can name who's going to be the administrator if you will.
(25:15):
So it doesn't have to be a bloodline, but typically
it's a bloodline, and that person is going to be
in charge of securing the property, itemizing everything, trying to
figure out what's there. And you're going to have to
report to the court. So when you have a probate situation,
all that reporting goes back to the court. So if
you get somebody that's not on the up and up,
(25:36):
they're going to be in trouble with the court system,
if that makes sense, because they have to file these reports.
I hear it all the time. I don't want to
go through probate. That's going to take a decade. I mean,
unless you have the most complicated a state ever, it
will not take that long. Typically the ones I deal
with here and again, I get them after the attorneys
are already involved, and now we're going to start selling
(25:57):
some assets. A year, maybe a year and a half
like it depends. Is there a bunch of fighting, No, fighting.
Ors are pretty straightforward. These things don't take that long
of coury.
Speaker 2 (26:06):
Who's paying the property taxes, the utility bills, etc.
Speaker 4 (26:10):
That Well, if there's money in the trust, which a lot,
So here's the other I'm sorry in the estate, here's
the other fun part of it. Until the court names
you as the person that gets to handle the estate,
you don't get access to any of the bank accounts
or any of the other stuff. So if I've had
it happen both ways, typically that administrator is going to
be paying those bills, the mortgage, the taxes, the power,
(26:34):
all that stuff. They do have the right to get reimbursed,
and the judges will usually grant it, or if they
can get in fast enough. And let's say it's going
to take two months to get access to the bank accounts,
if there's no money otherwise to pay it, the chances
of a bank foreclosing or any drastic things happening in
two months, you know, that's kind of the calculation. You
(26:54):
do say, if you can get this, if you can
get access to mom's account, and that's where one hundred
thousand dollars is to take care of this stuff. We
can explain that to a bank, they're not going to
take your house in two months.
Speaker 2 (27:04):
And folks, again, you want to get an attorney involved
as soon as possible. But to that bank account issue, Cory,
I've ran into this situation. If your mom in this
example did not have a living trust, because you know
hopefully she did, but if she didn't.
Speaker 3 (27:15):
If she did, she.
Speaker 2 (27:15):
Probably named you as again executives last trustee where you
would have access.
Speaker 3 (27:19):
To that bank account.
Speaker 2 (27:20):
You go unto the bank, so the trust documents and
nine times out of ten you have access to it
to pay these bills. But let's say she did not.
She dies in test sate, meaning without a will, without
a trust, et cetera. Again, good luck getting your hands
on that money. So for those of you, at least
if you don't listen to our advice about considered speaking
with a state planning attorney getting a trust. If you
(27:40):
don't do anything, what I'm seeing Corey becoming popular is
at least make it a tod a transfer our death
bank account. Right, so that tells the bank, Okay, this
person doesn't have a trust. But let's say you know,
Corey is my dad, and I'm his son. He dies
without a trust. If it's a TOD account and I'm
the beneficiary of that when he dies, at least I
can go into the bank go hey, you know this
(28:02):
is a TOD account.
Speaker 3 (28:03):
I'm I'm the.
Speaker 2 (28:04):
One that's supposed to transfer to the legal department of
the bank, will look it over and most likely grant
me access so I can use that money and pay.
Speaker 3 (28:10):
Bills and so on and so forth.
Speaker 2 (28:11):
So I'm seeing a lot more of that where people
are like, and I don't know what it is the
want to mess with the trust, but at least TODs
better than not having anything.
Speaker 1 (28:19):
But John, would you take that same principle and then
add somebody to the house.
Speaker 5 (28:23):
I mean, I know we're getting kind of off the top.
Speaker 2 (28:26):
Yeah yeah, Corey shaking and said, no, I see that
done a lot too. Where I'm gonna let you real
quickly answer that's usual. You're seeing that them and usually
not the best.
Speaker 4 (28:34):
Right, So there's different ways you can do that. I've
seen it where they add people to the house. But
now you're getting involved in all these different tax ramifications. Right,
we haven't talked about the step that basis and all
this other stuff. So you start adding people to the house,
you're creating an issue there. The other thing that you
can do in the d and maybe do in other states,
is and say transfer on death deed. So if John,
you're my dad and doesn't look like you're going to
(28:54):
make it over the next year, you sign a ded
to transfer the house to me upon your death. Just
had to deal with this last year. The thought process
behind it for these clients and other people say, hey,
we're going to avoid probate because it's such a drastic,
you know, pain in the butt process, which it's not,
but that's what they think. Well, guess what, no title companies,
We're going to give you title insurance with a transfer
(29:16):
on death deed until you hit the statutory requirements for
creditor noticing. And to do the creditor noticing, you got
to go through the probate and medicare, medicare all these
different things. So it's like anything else in life. If
it sounds too good to be true, just do it
the way that ninety nine percent of the people do it.
Speaker 2 (29:37):
You just touched on something real quick, brother, that I
got to hit really fast, and that is if your
mom in this example was taking was a recipient of Medicare,
medical any any of the government or state funded programs.
Most likely you can't sell that house free and clear
and take those proceeds. You run the risk of having
to pay use the son of this example, paying the
(29:59):
government back some or all of the money they've taken,
right they you see that a lot for you.
Speaker 4 (30:03):
Yeah, yeah, and that's where if you get a good
attorney and go through the process. I've seen those amounts,
negotiate it down to pennies. Yes, but if you just
try to part my language, screw them out of it,
it's like screwing the irs, and they're going to come
after it. They're going to find it. You may have
some personal liability there that you don't want it.
Speaker 3 (30:20):
That's right.
Speaker 2 (30:21):
So you see, folks, it's not it like Gory just said,
it's not as easy as you think it is when
you're in.
Speaker 3 (30:26):
There at that house.
Speaker 2 (30:27):
All right, we come back, we're gonnas. So we're going
to talk about getting the appraisal, reviewing the deaths only
as we kind of skip past that one and then
meeting with the tax Professional Financial Planner ETCTERA, dropping up
with Christa Snell right now, traffict cetera. Hello, Christen John
Sanchez show on News Talk seven and eighty K which
if you missed any of this show or any of
our others, please don't forget to pick up our podcast
at your favorite to podcasting company I e.
Speaker 3 (30:48):
iTunes, Spotify, Google, wherever it may be.
Speaker 2 (30:50):
Let's got some fun numbers going, so if you can
reach these fine gentlemen and their incredible years of expertise,
mister Edge, start us off.
Speaker 4 (30:55):
Please six seven three six sevens Rozer.
Speaker 1 (30:58):
Thank you, sir, mister Maaur yeah, two four zero two
zero two two thank you.
Speaker 3 (31:02):
Fellows, do appreciate it?
Speaker 2 (31:04):
All right, we're discussing you just an air at home
now what let's recap very quickly, so as Cory said,
first immediate step number one, you confirmed title and ownership structure.
Speaker 3 (31:12):
Is it the trust or held in the trust? A will,
joint tendancy.
Speaker 2 (31:16):
Secondly, get a professional appraisal, right, take it away.
Speaker 4 (31:21):
Corey, absolutely, and our friend Richard Lace is the expert
on these things. Anytime we run into an issue, that's
the number I always give out. And these are going
to be day of death appraisals. So, for instance, if
the family member passed away a decade ago and nobody
got around to doing any of this. You can call
Richard and say, hey, my dad passed away ten years ago,
(31:44):
I need to figure out what the value of the
house was in and through all his magic and numbers
and all the stuff he has, he can tell you
what the house was worth back then. And you're going
to need it or you're going to want it for
tax purposes because you get what's called a stepped up basis.
So if mom and dad bought the house in southern
California for twenty thousand dollars and nineteen I don't know,
(32:05):
fifty five or whatever it is right on the ocean,
and they spent every penny they had to do it,
and now it's worth twenty million, well, you get a
stepped up basis to the point of what it was
valued at on the date of their death. If you
then turn around and sell it for that amount, there
is no tax. If you saw it for more than
that amount, he'll only be taxed on the data death
(32:27):
of value and what the sell value was. So it's an.
Speaker 3 (32:31):
Incredible Any expenses such as Brookridge.
Speaker 4 (32:34):
Commissions, absolutely yeah, and so it's it's an incredible tool
that people don't. And I've had I've had two people
I've talked to and this sounds morbid, who had very
big estate holdings that they were thinking about selling this
and that. And both of these gentlemen at different times said,
you know what, for the sake of my kids, I'm
(32:55):
just going to hold it till I die, because then
at least they get the stepped up basis.
Speaker 2 (33:00):
Common real estate strategy is this. So you understand Corey's example, right,
you buy it, buy it for a hundred. When you die,
it's worth a million. So you normally, you know you'd
have a nine hundred thousand dollars capital gain if you
owned a longer than twelve months, you started about twenty
percent capital gains, right, plus state and maybe a little
Medicare capital gains. So let's just say twenty percent, right,
big substantial capital gains if you sold that property while
(33:21):
you're alive.
Speaker 3 (33:22):
Now, of course, if it's primary, you get the two
fifty or.
Speaker 2 (33:24):
Five hundred thousand dollars tax free exclusion, so on and so forth.
Where he gets really interesting, and Corey's just a pro
at this. If you have a rental property, again, a
lot of people they'll do what's called a ten thirty
one tax deferred exchange. We'll do some shows on that
where they just write Corey ten thirty one from one property,
do another, to another, to another.
Speaker 3 (33:41):
And let's say it was the same example.
Speaker 2 (33:43):
They started with one hundred thousand dollars rental, and now
they've ten thirty one multiple times, or maybe just once,
but now it's worth one hundred and now it's worth
a million dollars. Guess what, they die, you get the
same thing. You get the stepped up basis on there.
So they ten thirty one, they moved to bigger properties
or whatever they came was to justify that that ten
thirty one, but the same thing.
Speaker 3 (34:05):
They wait till they die, and you can hit it
right on Corey.
Speaker 2 (34:08):
That is a very very popular estate planning slash real
estate strategy. I've heard clients go, I'm never gonna sell it,
I'm just gonna rental propert.
Speaker 3 (34:16):
I'm just gonna keep ten.
Speaker 2 (34:17):
Thirty one exchanging it until the day I died. Then
my kids are going to get the stepped up cost spaces.
Speaker 4 (34:21):
Well, and the other thing too. To remember, not to
get all complicated, but let's say that that happens you've
got a property that's been exchanged multiple times, you get it,
you decide, you know what, Dad was pretty good at this,
so now I'm going to do that. When you take
the title of that property, it's in your personal name,
so if you're married, your spouse doesn't get to go
on there. But I had this last year John with
actually with one of your clients, and it was the
(34:41):
first time I had seen it. He held that as
an individual person inside their revocable trust and it was
a separate set aside, so technically his wife had no
control over, but it was still in their trust, and
they had a pretty savvy accountant that had it all
set up. And this gentleman, remember I sold them the
property at ten thirty one after his I think he
(35:02):
was his dad passed away, we sold it again. You know,
this was ten twelve years later. Now he moved it
from Reno up to I think they want somewhere up
in Montana or somewhere close to this. So it was
just very This all boils down to it's worth the
one thousand, two thousand and three thousand dollars whatever's going
to cost to get the experts to come in and say, hey,
this is how you do it. This is how you
(35:22):
do it, because you know I've seen people piss away inheritances.
Speaker 2 (35:26):
Yeah, no, you're absolutely right. All righty folks would just
touch the surface. We'll continue on this topic at another
show in the meantime. Thank you for joining us. Gott
bless you have a great day. We'll see it tomorre
on the John Sanchez Show. See you boy. S.
Speaker 3 (35:36):
Dwaighte Millard n MLSID number two four one two five
nine a license mortgage Loan officer with Highlands Residential Mortgage
Limited and Equal Housing Lender and MLSID number one three
four eight seven one.
Speaker 2 (35:48):
The information shared on this live broadcast is for general
information purposes only and does not constitute financial or mortgage advice.
Speaker 3 (35:55):
Listeners should consult directly with a licensed mortgage professional for
guidance tailored to their specific situation.
Speaker 2 (36:01):
All loans are subject to credit approval and program guidelines.
Speaker 3 (36:04):
Not all applicants will qualify.
Speaker 2 (36:06):
Loan terms in availability may vary by state and are
subject to change without notice.
Speaker 3 (36:11):
Highlands Residential Mortgage Limited is licensed in multiple states.
Speaker 2 (36:14):
For a full list of state licenses and disclosures, please
visit https slash slash www dot highlandsmortgage dot com backslash
licenses backslash. The views expressed during this program are their
own and do not necessarily reflect those of Highlands Residential
Mortgage Limited,
M hmm.
Speaker 2 (00:07):
Good Tuesday afternoon. Welcome to the John Sanchez Show on
News Talk seven to eighty. Wait, it's a pleasure to
be with you and a pleasure to be with my
co host Around the hornet, we shall trouble Corey individual
big c Is.
Speaker 3 (00:17):
I like you.
Speaker 4 (00:18):
I'm doing great.
Speaker 3 (00:19):
How are you doing very well? Thank you?
Speaker 4 (00:21):
All right?
Speaker 3 (00:21):
Well, mister Dwight Millard Highland's mortgage? How are you?
Speaker 5 (00:25):
No complaints?
Speaker 3 (00:26):
John, I can see the look on your face. Don't
tell you that you're I can see it.
Speaker 4 (00:31):
I'm gonna have one complain.
Speaker 1 (00:33):
Yeah, yeah, but nobody listens anymore, right, right, complain all
you want. Everybody's going, hey, I'll want up you right exactly.
Speaker 2 (00:41):
Have you noticed that the older you get, that less
people want to hear about your problems?
Speaker 1 (00:44):
You know?
Speaker 4 (00:44):
Yes?
Speaker 3 (00:45):
Yeah, yeah, I know.
Speaker 4 (00:46):
I know.
Speaker 5 (00:47):
It's like because there's lots of them, right, Yeah.
Speaker 2 (00:49):
They don't hesitate to come to us with their problems,
but they don't want to hear ours. See, you make friends,
make friends with AI, and you.
Speaker 3 (00:56):
Don't need a human being.
Speaker 4 (00:57):
That's right, that's what they're saying.
Speaker 3 (00:59):
I guess you know. Yeah, I love it.
Speaker 2 (01:03):
I love it, Alrighty folks, Well, thank you so much
for joining us this afternoon. We do appreciate it. We're
gonna make this next hour very much worth your while.
We're gonna recap the stock market very quickly here in
a moment. But first let me tell you our topic
for this afternoon. Here's the title. You just inherited a home?
Now what you're thinking? Oh man, what do you mean now?
Speaker 4 (01:22):
What? Now?
Speaker 3 (01:23):
I'm gonna get a whole bunch of money, right, find
means like hitting the lottery?
Speaker 2 (01:27):
Well, hold on, you know, to say, the biggest wealth
transfer in history, in history, folks, is going to be occurring.
And they're right, it's already started. It's already started. Over
the next ten years, trillions of dollars and property is
going to pass from one generation to the next. But
(01:47):
the question is what should you really do, really do?
And I underline that word really If you inherit a home,
do you keep it? Do you sell it? Do you
rent it out? Well, today, myself and the boys are
gonna through the financial, the tax and the emotional decisions
that can make or break your inheritance. And we all
(02:08):
deal with this on a regular basis by all means,
especially Corey and you know, this is a discussion that
we have that takes you know, in real life, I'm
talking that takes Corey a lot of fact finding, right
you know. We I was telling someone today the typical
scenario I get, and I'd love to hear yours very quickly,
(02:29):
is you know, the kids inherit the property.
Speaker 3 (02:31):
You know, you got one parent left, that parent dies, you.
Speaker 2 (02:35):
Got the property now and two out of the three siblings,
let's say they want to keep the property, and you
always have that one sibling that says, no, I want
to be cashed out. And then those two siblings go, well,
wait a minute here, that's not what mom and dad wanted. Right,
we have family memories here, we all grew up, we
had Christmas here, No I want to be cashed out.
So then those two siblings go, I got a call
to White and refinance this thing to get some cash.
(02:58):
And then I mean it goes on and on from there, right, Cory.
Speaker 4 (03:03):
It does, and it goes we'll go into the points,
but then you go to what is the structure somebody
passes away. If they have a trust, then the structure
of what's supposed to happen will be in the trust.
If they don't, then you get to go to probate
court more than likely and get up to a judge.
And so every beneficiary has a certain amount of rights,
and if it's a trust, those rights will be kind
of spelled out. If you go to court and have
(03:28):
to go through that probate scenario, then they all, I think,
And I might be wrong to say I'll have equal rights. Right,
So does one always trump the other? No? But you know, John,
and I'm sure you've seen it too. I've seen siblings
and I deal with them all the time that are
the best of friends. As soon as mom and dad,
as soon as the last parent is gone, here come
the attorneys and here comes the fight and it gets nasty.
(03:51):
And it's unfortunate that it happens that way, but not
every single time, but most of the time that's how
it goes.
Speaker 3 (03:57):
I just told that to a client this morning.
Speaker 2 (04:00):
We're doing a review, and I said, they we're gonna
get their living trust up to date and are actually created.
Speaker 3 (04:06):
They don't even have one.
Speaker 2 (04:07):
And I said that exact same thing, Corey, I said,
I have seen the best of you know, siblings break
apart because of financial right. And so once again and
that's why, you know, we do so many shows and
we'll be doing many more on the importance of a
state planning because that can be avoided through proper state planning,
proper titling, having written instructions IEVA living trust or revocable
(04:28):
living trust, having those instructions written out. You know, Dwight's
gonna get this portion, Corey's going to get this portion.
John's going to get this portion. And by the way,
as I told this client, you guys know this if
you can test it, Dwight, if you can test you know,
Mom and Dad's a state.
Speaker 3 (04:42):
Guess what you're gonna get one dollar thing?
Speaker 2 (04:44):
Right, Well, you get a dollar, you get a dollar,
you get it. I think legally they have to have
a dollar in there, but you get a dollar, and
so that stops a little bit of it. But it's
a it's a tough situation because you go from this emotion.
Speaker 3 (04:55):
I've seen it with clients.
Speaker 2 (04:56):
You go with it from the from the emotion like okay,
you know, yeah, mom and that are gone. You know, boohoo,
who wow, Mom and Dad owned this million dollar house
free and clear. And it's me and my sister, right,
So we're gonna get half a million dollars each. Well,
hold on, right, there's a lot of things and that's
what we're going to cover today. There's a lot of
things that we're gonna We're gonna kind of be starting
this off by talking about the reality of it.
Speaker 3 (05:17):
Right. It's not as easy and as simple as you
think it is. But hopefully you have a great understanding.
I know you will not. Hopefully you're gonna have a
great understand by the time the show's done. Dwight, did
you do you have any personal stories you want to
share real quick?
Speaker 5 (05:28):
No, except for you know, the family thing is is real?
Speaker 4 (05:33):
Right?
Speaker 1 (05:33):
I mean, I guess the question I would have and
we can do this an now or later. But in
a trust, the trustee do they carry more weight than
a normal sibling.
Speaker 4 (05:46):
The I'm not an attorney, John's not an attorney, but
the trustee, the success or trustee, if you will, is
supposed to carry out the function of the trust. They
don't get any more where with all to do this,
do that, anything else. They have the same rights as
the other beneficiars, because typically they are a beneficiar. But
and John, tell me, if you see this too, I
(06:08):
see a lot of times where it's usually the eldest
son or something like whoever the parents thought had the
more financial you know whatever. The parents will lay it
out and maybe once they're gone, that person says, eh,
I don't necessarily agree with this, and they'll start going
down a different path. Then you have to get into court,
unfortunately and force them back onto the path that mom
(06:29):
and dad wanted them to go.
Speaker 2 (06:31):
Right, Because to your point, Dwight, let's just real quick,
let's use the three of us at is exemple. Okay,
we're brothers, and let's say we're gonna inherit a million
a million dollar paid in full property. Right, So mom
and dad selected me to be the trustee or would.
Speaker 3 (06:44):
I become the executor? Right?
Speaker 2 (06:45):
So mom and Dad died, and let's say they wanted it,
you know, thirty four percent to me, thirty three to you,
thirty three to Corey. Okay, so pretty simple, right, But
what if Corey goes man? You know, I remember back
on my twenty first birthday, Dad and I were sitting
around and having a couple of beers, said, hay Son, you're.
Speaker 3 (07:01):
My favorite son.
Speaker 2 (07:01):
I'm going to give you fifty percent, and maybe he
even wrote it down.
Speaker 3 (07:05):
That's what Corey's talking about, Dwight.
Speaker 2 (07:06):
Where these things, even with a trust right, these things
can go sideways. But I, as the executor and the
one that's legally obligator, remember that I'm legally obligated state
to adhere and follow the wishes of mom and Dad
in this trust that they wrote out. If I don't
do that, now, guess what, Dwight, you consume me, Corey
(07:27):
consume me right in anybody else because I'm not following
quote the letter of the law via the trust. And
so that's where it gets really messy. And then Corey, right,
we can go down this rabbit hole real quick. Hey,
you know what, as I was telling this this this
client today, I've seen and I know you guys have too,
I've seen it to where the estate is such a mess,
when there's a lot of real estate involved that that
(07:48):
that executor I all use myself in this example has
to quit their job, right because there's so much involved
in this liquidating of the of the real estate, the
stock market accounts, the accounting of the distribution, et cetera.
Speaker 3 (08:02):
I don't have time to work my normal job.
Speaker 2 (08:04):
So guess what I'm going to quit my job and
I'm going to just focus on mom and Dad's estate
for the next year. Well you know what, I still
got to eat. So guys, I want you your i e.
The trust or the estate. I want you to pay
me five thousand dollars a month and going Mike, Hell,
we're gonna do that. It's not in there right right,
And it's it's.
Speaker 4 (08:22):
It's interesting you bring that up, because if you're going
to get paid, it has to be in the trust.
And if it's not mentioned in the trust, you can't
do it, and less a judge allows it. So most
trusts will say yes or they'll say no. And that's
one thing has a beneficiary. If you're not the person
in charge, that's one thing you want to look at.
So you should have a copy of the trust, even
(08:42):
if you're not in charge, because you have the right
to read it. And yeah, trust me, the courts are
packed with these little arguments back and forth, and you know,
I'm dealing with one right now for one of our
attorney clients. And the court basically took jurisdiction over the
trust because there were the issues were so oh so
they're fighting so bad. The court said, we now are
(09:04):
going to be in control and we're going to dictate
how this rolls. And they're doing it, you know, in
accordance with the trust.
Speaker 1 (09:10):
Yes, yeah, But if you take John, if you take
that scenario, and let's say Corey and I are really
close brothers, yes, and we don't you know particularly way
like the way you're interpreting the way Mom and Dad
can two out of three trump, I mean.
Speaker 4 (09:26):
Through a judge, through a judge, but you can't just
do it on your own, correct.
Speaker 3 (09:29):
And you don't know if you're gonna win with a judge.
But no, by your own beganging up against me two
on one. Nope, yep, that's why you have a trust.
Speaker 2 (09:36):
That was the That was the uh, you know Dad's
example or Dad's wishes in our example that he wanted
that money to be split thirty four to thirty three
thirty three, and then you come back to w and go.
You know what John is You know, a couple of
years have gone by, where's my money? And matter of fact,
I don't think you've been spending the money correctly, you know,
keeping the bills up and all this stuff. So I
request an additive financial statement of the trust of the estate.
Speaker 3 (09:58):
Corey shaking his head. Yep, yeah right.
Speaker 2 (10:00):
And then do you think I'm going to like you
anymore as my brother when you start accusing me of
stealing money?
Speaker 3 (10:05):
Nope? So now here comes the in family fighting.
Speaker 5 (10:09):
What do you think the just off topic?
Speaker 1 (10:11):
What do you think the percentage of this goes to
a court question?
Speaker 3 (10:15):
I have no idea. How about you, Gravy.
Speaker 4 (10:19):
I think I don't know what the number would because
I think the vast majority of them settle before they
get into the point where a judge has Judges don't
like to make decisions. They want people to figure it out,
and so a lot of times the threats back and forth,
and especially if you're that success or trustee, you're like,
oh man, these guys got a point, and your attorney's
(10:39):
going to figure that out. He's gonna be like, you
might want to settle this out or douce them because
as that success or trustee, and we can get into later,
but you have a higher burden, You have fiduciary duties.
You can get in big trouble. It's not just like
slap on the wrist and give the guy five bucks. No, No,
you've got some major problems if you are doing bad things.
Speaker 2 (11:00):
Yep, yep, you got it, and usually siblings will find out.
Speaker 3 (11:03):
If you are or excuse you of it. We all say,
in that.
Speaker 2 (11:07):
So very complicated topic, we're going to try to simplify
it with a lot of things to talk about. So
we're gonna come back to a quick recap on the
market and not a lot happened today, a little bit
of weakness. We'll tell you what the reasons were, and
then we'll get into our topic. You just inherited a home,
now what? Sturn over to Christen snow right now traffic Center.
Hello Kristen, Welcome back to the John Sanchez Show on
(11:28):
Newstalk seven eighty ko h to Corey In's evdrility to
White Mallard of Highlands Morgas.
Speaker 3 (11:32):
Once again our topic, You just inherit a home? Now what?
Speaker 2 (11:35):
But before we get to that, let's recap the market
real quick. Tough day to day. I just could not
get any traction ninety two point loss on the down,
down point two zero percent to forty six thousand and
six oh two, as I gave up one hundred and
sixty three point six to seven percent s and p
lower by twenty six points about a point three eight
percent decline.
Speaker 3 (11:53):
What was the problem that was the issue. There really
wasn't anything.
Speaker 2 (11:56):
There was no specific, real negative news on anything.
Speaker 3 (11:59):
Today.
Speaker 2 (12:00):
I think investors are getting a little concerned, you know,
with this dragon. What are we going into date eight? Now,
today was day seven of the government shut down. I
don't know if you guys saw this or not. I
mentioned this on my stock update this morning. Bloomberg reported
at eight o five this morning in the Pacific Standard
time that the Trump administration is considering not not paying
(12:20):
furloughed government workers because they said, the last time we had,
you know, the government workers gone furloughed, they put a
provision in the in the in the the rule slash
law that said, after and I'm going to paraphrase, after
a government shut down, there has to be a certain
provision in the new rule that says, Okay, these employees
(12:44):
can come back and they get their back pay.
Speaker 4 (12:49):
So it's not automatic.
Speaker 2 (12:50):
It's not automatic. That's what everybody said, like, you got
to be kidding me. So now, I don't know. I
mentioned this to Ross this morning. The market seemed to
roll over right after that news came out. I saw
nothing in any of my sources indicating that that was
a specific reason. I don't know if was this a
coincidence or what, But can you guys imagine what a
(13:10):
disaster that would be GDP wise, right, because remember we
lose one tenth of GDP for every week the government
shut down. So now we've already been shut down a week,
we lost one tenth. Can you imagine if all these hundreds,
you know, almost a million people, right, what seven hundred
and eighty thousand something like that, don't get paid while
they're gone, and you know, do iight, how for giving
(13:32):
their lenders under a shutdown like this.
Speaker 5 (13:35):
Well, I don't think they are at all.
Speaker 1 (13:37):
You're in a contract. I mean, we don't want to
get back into that again. Right, Skip three payments and
we'll talk to you, right. You know, that just doesn't
make sense. But it's going to be interesting, John, because
I think what they had to vote at last night,
I think to approve it in order to get paid
this next.
Speaker 5 (13:52):
Pay period, right, right, So they're not going to get there.
Speaker 1 (13:55):
They're not going to get paid, right, And that's when
it's really going to start to Matt.
Speaker 5 (14:00):
Yeah, it's really going to start to matter.
Speaker 1 (14:02):
And you know, I think It was kind of interesting
how the Trump administration did kind of pivot a little
bit and now put it all back on. It feels like,
you know, the Senate and in the House, you know,
going hey, yeah, this is in there. I mean so
now I don't know, I mean, eventually they're going to
(14:22):
get it resolved.
Speaker 5 (14:23):
But this, this is, this is getting problematic.
Speaker 1 (14:25):
I mean, of course, now I have my first us
D A loan, right and they're not even open. Right
of course, isn't that just Murphy's law? So you go
on the site and it says, sorry do to you,
we're in on USDA. Sorry, government closes down.
Speaker 2 (14:39):
So so when you go to the USDA site, what
what what's the.
Speaker 5 (14:42):
The you can't get in? You're just sorry?
Speaker 3 (14:44):
Is what does the email say?
Speaker 2 (14:45):
Because it seems like every government entity has a different response.
Speaker 5 (14:50):
It was just like, do the government shutdown? We are
unable to didn't blame it.
Speaker 3 (14:54):
Just so we're not hilarious, absolutely.
Speaker 1 (14:57):
I don't know, but yeah, but it's just gonna you
you said it perfect. The longer this goes, the.
Speaker 5 (15:03):
Tougher it's going to be. It's gonna be tough. It'sould
be tough to unwind it's gonna be tough. Yeah, they've
got to get this figured out well.
Speaker 2 (15:10):
And then, of course we heard today for those of
you that are traveling that a number of UH air
traffic controllers are calling in sick. They're not reporting because
they're not getting paid. Like I'm sick to the I'm
not coming in. So air travels really starting news, you know,
slow down dramatically.
Speaker 4 (15:27):
Uh.
Speaker 2 (15:27):
There was I guess yesterday Burbank Airport. They went like
three or four hours with no air traffic controllers. The
air traffic was being directed out of San Diego, out
of the Air Traffic Control Center in San Diego.
Speaker 3 (15:38):
That's scary. That's scary.
Speaker 2 (15:40):
And then and then you had the Transportation secretary on
CBC this morning, gone, hey, you know it's all right.
Speaker 3 (15:45):
Safety is all these.
Speaker 2 (15:46):
First I'm like, oh boy, you know, sorry for anybody
that's having that travel right now.
Speaker 3 (15:51):
I really do.
Speaker 2 (15:52):
Quickly, let's let's hit the mortgage because I've got a
question I want to throw your direction regarding zombie mortgages.
I read a fascinating article. We'll go to break and
then we're going to come back and tack list. So
where do we finish out on the thirty year today.
Speaker 1 (16:04):
So right where we kind of left off last week,
six point three to eight on the thirty year fixed mortgage.
I mean that's six point three nine six point three,
that's where we're at, five point nine zer on the
fifteen and then the fahava is or six point eight
and six ten.
Speaker 5 (16:19):
So I mean, no movement. But it's interesting after our last.
Speaker 1 (16:22):
Conversation last week, John, I'm getting more and more questions,
especially from builders and Miltor's saying, what is going to
take to get these rates down? You know, John Ida, Yeah,
I mean, who's going to go buy this sleepy little
bond over there?
Speaker 3 (16:38):
Nobody?
Speaker 2 (16:38):
Yeah, And that's stock market corrects then and you'll see
larger allocation.
Speaker 5 (16:43):
But being a businessman, is there is there a way?
Speaker 1 (16:46):
And I'm just trying to think outside the box where
Trump could create some energy in the ball mark, where
people would want to buy bonds for any reason.
Speaker 3 (16:56):
There could be. I could give you a million.
Speaker 1 (16:58):
Reasons, Okay, okay, So there's okay, yeah, okay, yeah, not
just the government, because that's what we did the first right, right,
we don't want to use.
Speaker 3 (17:06):
The governments, how do you? Yeah, Governent's gonna have to
be behind it. But yeah, I could think of so
many ways.
Speaker 1 (17:10):
Okay, so there are some little tools out there that
could Okay, absolutely.
Speaker 2 (17:14):
Yeah, they just don't feel there at that point yet.
All right, tenure yield today? To Dwight's point, I'm surprised
you didn't budget all Dwight on the thirty year, you're
down four basis points on the ten year, you know,
at yield of four thirteen?
Speaker 3 (17:25):
Uh real, quickly, doight? I got to throw this in.
Just give me about a minute or two answer for
you would be so kind.
Speaker 2 (17:31):
There's a great article in uh Bloomberg or stus with
Wall Street Journal today and it's talking about zombie mortgages.
Speaker 3 (17:40):
And it's been a long time.
Speaker 2 (17:41):
We need to do a show on this because I
found it very fascinating. But I want to see what
your experience is. So this is if folks, if you
don't know what a zombie mortgage is. So do I
just mention about, you know, the financial crisis, right, so
you go back to the financial crisis O eight oh nine.
You know, you'd get a loan first, and then let's
say you get another whatever one hundred and twenty five
thousand and for a second to make up that entire
(18:03):
amount duce so you don't have to come out so
much out of pocket. So far, so good, right, right, Okay,
Now that second mortgage, really the financial crisis happens that
second mortgage, as we all know, balloon came do or
your new term with a higher interest rate kicked in.
That's what called when the results of the financial crisis
of wait or night. People couldn't do it, so you
(18:24):
let that second go. So many companies came in and
issued at ten ninety nine. I remember Corey talking about this,
issued the ten ninety nine. See I believe it is
where the lender on that second forgave the loans, like
you know, your house is not worth it. You're saying,
you can't afford it, So they write it off and
then what they do is they turn around.
Speaker 3 (18:42):
And sell it to collection agencies.
Speaker 2 (18:44):
So let's say they just wrote off this one hundred
and twenty thousand dollars second mortgage. Homeowner goes, hey, I
got the ten ninety nine and right, Corey, they had
to pay tax.
Speaker 3 (18:51):
On that money. Absolutely, okay, forget now, So now they.
Speaker 2 (18:54):
Pay taxes on it and they don't hear anymore. They
don't get any statements from the lender, Dwight, they don't
get any thing. And then all of a sudden, Now
what's happening. These these these collections are buying these loans
for like two or three thousand dollars, right, one hundred
thousand dollars plus loan that was written down. They're buying
(19:14):
it for like two thousand dollars. I mean literally since
on the dollar. Now they're going back after these people
saying you owe this money? I mean how I again,
I want to do a whole show on this at
some point.
Speaker 3 (19:26):
But have you heard anything to Wight? Is this prevalent?
Because this article made it sound like it's really starting
to raise its Yeah.
Speaker 1 (19:32):
Well you know those collection companies are out there buying anything, yes, right,
because they know they have you held hostage. Whether than
that they can collect or not, Corey, correct me if
they you know, if it's.
Speaker 3 (19:42):
In many cases they are, Yeah, they are collecting.
Speaker 5 (19:44):
They have the legal right tip.
Speaker 3 (19:47):
Yeah in some states they do.
Speaker 1 (19:49):
So if they do that changes, but if they don't, Hey,
what do I care about it?
Speaker 5 (19:52):
For two thousand and three? You you're they will settle
at some point. Tell me you the consumer, because you've
locked them down.
Speaker 4 (19:59):
You you can't do anything.
Speaker 2 (20:00):
So some of these these clutch stencies are generating over
a three thousand percent return.
Speaker 5 (20:08):
As if it wasn't bad enough.
Speaker 2 (20:09):
Back that's what these people are saying, Like, my god,
I'm reliving hell again.
Speaker 1 (20:13):
You know we said this, We said this though back then,
remember that, Corey, we talked about the these seconds are
going to resurface at a different point in time in
a different way.
Speaker 4 (20:22):
Well, yeah, typically I didn't read the article, but typically
when the first lender writes it off, you get a
ten and and you pay the tax. It's done as
far as your concerned. Now, they don't do what's called
reconvey it, which gets it off of the public record,
so it stays there. So then somebody's got to go
clear it up. So I g. If that were to
happen to somebody I know or me, let's go to court,
(20:43):
because you can't. That's double dipping. You can't double dip
on that. And and there have been investment strategies. A
couple guys here locally pushing stuff, Oh, we can buy
all these seconds, knowing that maybe you're only going to
collect on one or two percent of them, not because
you have the right to. But because people get panicked. Yes,
what's happened, But that's the bet, right, Like, Okay, well,
I'll spend one hundred thousand, and if I can get
(21:05):
two of them to pay me one hundred and fifty thousand,
that's a great return, you know so, But yeah, it's
it's a slime ball way to mind.
Speaker 3 (21:13):
Man oh man.
Speaker 2 (21:14):
All right, guys, thank you for that deviation there. Let's
turn it over to Jack Sabing. He's got news, traffic
and weather. Hey, Jack, welcome back to the John Sanchez
Show with Newstalk seven and eighty K, which the Cory
has eventuality to White mallart of Highlands more years once again.
A ninety two point decline on the down lower by
one fifty three on the nasdack can I pulled back
up twenty six on the SMP. All right, you hit
the lottery, you inherited a home. Now what is it
(21:37):
all fun and games and profitability? I hope it is,
but it may not be. And that's what we're here
to tell you about this afternoon.
Speaker 3 (21:44):
I'm gonna start off with some stats, guys.
Speaker 2 (21:47):
According to Sorelli Associates, Okay, let's talk about the great
wealth transfer. According to Cirelli Associates, eighty four trillion dollars
in assets is expected to pass down through the States
between twenty twenty four and the year twenty forty five.
Eighty four trillion dollars of that sixteen trillion is going
to transfer within the next ten years. Roughly half of
(22:10):
this wealth is tied to real estate, particularly in California, Florida,
Texas and other high appreciation areas. Forty five percent of
American age fifty five plus own their home outright. Many
millions of properties are going to soon change hands. And finally,
a Fidelity survey found that one in three inheritors sell
an inherited home within the first year, often without understanding
(22:33):
the tax implications. Okay, let's start with some reality, folks,
the emotional side.
Speaker 3 (22:38):
You just lost the love one.
Speaker 2 (22:39):
Let's just say it was you know, mom was the
final remaining parents A mom just passed. Then you have
to make a major financial decision quickly. Right, You just
got this house, got bills, you got to pay on it, right,
even if it's paid off.
Speaker 3 (22:51):
You got property taxes and utilities, et cetera.
Speaker 2 (22:55):
But why this whole area is really becoming so very
popular that we need to talk about. It is because
the Boots my generation, in Dwight's generation, we are the
last year of the boomer generation. We hold over fifty
percent of us household wealth and much of that, as
I just said, is tied up in wealth. Okay, Corey,
let's get down to the action. What are the immediate
(23:16):
steps that someone needs to follow after they inherit the
home they has found out you know, trust, reading up
a will, whatever it is you just inherited this. Let's
pick a hypothetical value. Let's say seven hundred thousand dollars house.
Speaker 3 (23:29):
What do we do?
Speaker 4 (23:30):
The first thing that you need to do is figure
out how that is titled. Is there a trust or
is there not a trust? Meaning you're probably gon to
go through probate even if there is a trust and
you're the smartest person that you know, but you have
no legal background, you need to have an attorney. And
in a lot of cases, John, it's the attorneys or
the attorney shop that drafted the trust. Go back to them.
(23:53):
Talk to them so they can explain. Not all trusts
are created the same. They all have different little provisions
here and there. And it's not as if Hey, I
read a trust five years ago, so I already understand
how this works. These things are some can be incredibly complicated,
some of them are pretty easy. But you need to
have a third party, be it an attorney, a CPA,
somebody with an understanding, to explain the trust to you.
(24:16):
But the first thing I always do when I get
a phone call, and I get these calls a lot,
they say, hey, you know my dad just passed away.
Somebody gave me your number, or think we might sell
the property. The first question to ask is is it
in a trust or Usually I'll go to the assession.
I'll find out ahead of time. But is it in
a trust or is it not in a trust? Because
that's going to determine which path we have to go
to right away? Probate not probate either way. My recommendation
(24:39):
is always have an attorney involved to get you through it.
Speaker 2 (24:42):
Let's say let's say that it is going to go
the it's just owned in mom's name, mom's past, We're
going to go to probate.
Speaker 3 (24:50):
What's the path.
Speaker 4 (24:52):
Again, my recommendation is have a good probate, a state attorney,
start the process, get you through the process, have to
notify the creditors, you have to notify the other beneficiaries.
You have to take an inventory of what's there. If
there's a will, I think it will name who's gonna
do these things. But if there's not, then the court
can name who's going to be the administrator if you will.
(25:15):
So it doesn't have to be a bloodline, but typically
it's a bloodline, and that person is going to be
in charge of securing the property, itemizing everything, trying to
figure out what's there. And you're going to have to
report to the court. So when you have a probate situation,
all that reporting goes back to the court. So if
you get somebody that's not on the up and up,
(25:36):
they're going to be in trouble with the court system,
if that makes sense, because they have to file these reports.
I hear it all the time. I don't want to
go through probate. That's going to take a decade. I mean,
unless you have the most complicated a state ever, it
will not take that long. Typically the ones I deal
with here and again, I get them after the attorneys
are already involved, and now we're going to start selling
(25:57):
some assets. A year, maybe a year and a half
like it depends. Is there a bunch of fighting, No, fighting.
Ors are pretty straightforward. These things don't take that long
of coury.
Speaker 2 (26:06):
Who's paying the property taxes, the utility bills, etc.
Speaker 4 (26:10):
That Well, if there's money in the trust, which a lot,
So here's the other I'm sorry in the estate, here's
the other fun part of it. Until the court names
you as the person that gets to handle the estate,
you don't get access to any of the bank accounts
or any of the other stuff. So if I've had
it happen both ways, typically that administrator is going to
be paying those bills, the mortgage, the taxes, the power,
(26:34):
all that stuff. They do have the right to get reimbursed,
and the judges will usually grant it, or if they
can get in fast enough. And let's say it's going
to take two months to get access to the bank accounts,
if there's no money otherwise to pay it, the chances
of a bank foreclosing or any drastic things happening in
two months, you know, that's kind of the calculation. You
(26:54):
do say, if you can get this, if you can
get access to mom's account, and that's where one hundred
thousand dollars is to take care of this stuff. We
can explain that to a bank, they're not going to
take your house in two months.
Speaker 2 (27:04):
And folks, again, you want to get an attorney involved
as soon as possible. But to that bank account issue, Cory,
I've ran into this situation. If your mom in this
example did not have a living trust, because you know
hopefully she did, but if she didn't.
Speaker 3 (27:15):
If she did, she.
Speaker 2 (27:15):
Probably named you as again executives last trustee where you
would have access.
Speaker 3 (27:19):
To that bank account.
Speaker 2 (27:20):
You go unto the bank, so the trust documents and
nine times out of ten you have access to it
to pay these bills. But let's say she did not.
She dies in test sate, meaning without a will, without
a trust, et cetera. Again, good luck getting your hands
on that money. So for those of you, at least
if you don't listen to our advice about considered speaking
with a state planning attorney getting a trust. If you
(27:40):
don't do anything, what I'm seeing Corey becoming popular is
at least make it a tod a transfer our death
bank account. Right, so that tells the bank, Okay, this
person doesn't have a trust. But let's say you know,
Corey is my dad, and I'm his son. He dies
without a trust. If it's a TOD account and I'm
the beneficiary of that when he dies, at least I
can go into the bank go hey, you know this
(28:02):
is a TOD account.
Speaker 3 (28:03):
I'm I'm the.
Speaker 2 (28:04):
One that's supposed to transfer to the legal department of
the bank, will look it over and most likely grant
me access so I can use that money and pay.
Speaker 3 (28:10):
Bills and so on and so forth.
Speaker 2 (28:11):
So I'm seeing a lot more of that where people
are like, and I don't know what it is the
want to mess with the trust, but at least TODs
better than not having anything.
Speaker 1 (28:19):
But John, would you take that same principle and then
add somebody to the house.
Speaker 5 (28:23):
I mean, I know we're getting kind of off the top.
Speaker 2 (28:26):
Yeah yeah, Corey shaking and said, no, I see that
done a lot too. Where I'm gonna let you real
quickly answer that's usual. You're seeing that them and usually
not the best.
Speaker 4 (28:34):
Right, So there's different ways you can do that. I've
seen it where they add people to the house. But
now you're getting involved in all these different tax ramifications. Right,
we haven't talked about the step that basis and all
this other stuff. So you start adding people to the house,
you're creating an issue there. The other thing that you
can do in the d and maybe do in other states,
is and say transfer on death deed. So if John,
you're my dad and doesn't look like you're going to
(28:54):
make it over the next year, you sign a ded
to transfer the house to me upon your death. Just
had to deal with this last year. The thought process
behind it for these clients and other people say, hey,
we're going to avoid probate because it's such a drastic,
you know, pain in the butt process, which it's not,
but that's what they think. Well, guess what, no title companies,
We're going to give you title insurance with a transfer
(29:16):
on death deed until you hit the statutory requirements for
creditor noticing. And to do the creditor noticing, you got
to go through the probate and medicare, medicare all these
different things. So it's like anything else in life. If
it sounds too good to be true, just do it
the way that ninety nine percent of the people do it.
Speaker 2 (29:37):
You just touched on something real quick, brother, that I
got to hit really fast, and that is if your
mom in this example was taking was a recipient of Medicare,
medical any any of the government or state funded programs.
Most likely you can't sell that house free and clear
and take those proceeds. You run the risk of having
to pay use the son of this example, paying the
(29:59):
government back some or all of the money they've taken,
right they you see that a lot for you.
Speaker 4 (30:03):
Yeah, yeah, and that's where if you get a good
attorney and go through the process. I've seen those amounts,
negotiate it down to pennies. Yes, but if you just
try to part my language, screw them out of it,
it's like screwing the irs, and they're going to come
after it. They're going to find it. You may have
some personal liability there that you don't want it.
Speaker 3 (30:20):
That's right.
Speaker 2 (30:21):
So you see, folks, it's not it like Gory just said,
it's not as easy as you think it is when
you're in.
Speaker 3 (30:26):
There at that house.
Speaker 2 (30:27):
All right, we come back, we're gonnas. So we're going
to talk about getting the appraisal, reviewing the deaths only
as we kind of skip past that one and then
meeting with the tax Professional Financial Planner ETCTERA, dropping up
with Christa Snell right now, traffict cetera. Hello, Christen John
Sanchez show on News Talk seven and eighty K which
if you missed any of this show or any of
our others, please don't forget to pick up our podcast
at your favorite to podcasting company I e.
Speaker 3 (30:48):
iTunes, Spotify, Google, wherever it may be.
Speaker 2 (30:50):
Let's got some fun numbers going, so if you can
reach these fine gentlemen and their incredible years of expertise,
mister Edge, start us off.
Speaker 4 (30:55):
Please six seven three six sevens Rozer.
Speaker 1 (30:58):
Thank you, sir, mister Maaur yeah, two four zero two
zero two two thank you.
Speaker 3 (31:02):
Fellows, do appreciate it?
Speaker 2 (31:04):
All right, we're discussing you just an air at home
now what let's recap very quickly, so as Cory said,
first immediate step number one, you confirmed title and ownership structure.
Speaker 3 (31:12):
Is it the trust or held in the trust? A will,
joint tendancy.
Speaker 2 (31:16):
Secondly, get a professional appraisal, right, take it away.
Speaker 4 (31:21):
Corey, absolutely, and our friend Richard Lace is the expert
on these things. Anytime we run into an issue, that's
the number I always give out. And these are going
to be day of death appraisals. So, for instance, if
the family member passed away a decade ago and nobody
got around to doing any of this. You can call
Richard and say, hey, my dad passed away ten years ago,
(31:44):
I need to figure out what the value of the
house was in and through all his magic and numbers
and all the stuff he has, he can tell you
what the house was worth back then. And you're going
to need it or you're going to want it for
tax purposes because you get what's called a stepped up basis.
So if mom and dad bought the house in southern
California for twenty thousand dollars and nineteen I don't know,
(32:05):
fifty five or whatever it is right on the ocean,
and they spent every penny they had to do it,
and now it's worth twenty million, well, you get a
stepped up basis to the point of what it was
valued at on the date of their death. If you
then turn around and sell it for that amount, there
is no tax. If you saw it for more than
that amount, he'll only be taxed on the data death
(32:27):
of value and what the sell value was. So it's an.
Speaker 3 (32:31):
Incredible Any expenses such as Brookridge.
Speaker 4 (32:34):
Commissions, absolutely yeah, and so it's it's an incredible tool
that people don't. And I've had I've had two people
I've talked to and this sounds morbid, who had very
big estate holdings that they were thinking about selling this
and that. And both of these gentlemen at different times said,
you know what, for the sake of my kids, I'm
(32:55):
just going to hold it till I die, because then
at least they get the stepped up basis.
Speaker 2 (33:00):
Common real estate strategy is this. So you understand Corey's example, right,
you buy it, buy it for a hundred. When you die,
it's worth a million. So you normally, you know you'd
have a nine hundred thousand dollars capital gain if you
owned a longer than twelve months, you started about twenty
percent capital gains, right, plus state and maybe a little
Medicare capital gains. So let's just say twenty percent, right,
big substantial capital gains if you sold that property while
(33:21):
you're alive.
Speaker 3 (33:22):
Now, of course, if it's primary, you get the two
fifty or.
Speaker 2 (33:24):
Five hundred thousand dollars tax free exclusion, so on and so forth.
Where he gets really interesting, and Corey's just a pro
at this. If you have a rental property, again, a
lot of people they'll do what's called a ten thirty
one tax deferred exchange. We'll do some shows on that
where they just write Corey ten thirty one from one property,
do another, to another, to another.
Speaker 3 (33:41):
And let's say it was the same example.
Speaker 2 (33:43):
They started with one hundred thousand dollars rental, and now
they've ten thirty one multiple times, or maybe just once,
but now it's worth one hundred and now it's worth
a million dollars. Guess what, they die, you get the
same thing. You get the stepped up basis on there.
So they ten thirty one, they moved to bigger properties
or whatever they came was to justify that that ten
thirty one, but the same thing.
Speaker 3 (34:05):
They wait till they die, and you can hit it
right on Corey.
Speaker 2 (34:08):
That is a very very popular estate planning slash real
estate strategy. I've heard clients go, I'm never gonna sell it,
I'm just gonna rental propert.
Speaker 3 (34:16):
I'm just gonna keep ten.
Speaker 2 (34:17):
Thirty one exchanging it until the day I died. Then
my kids are going to get the stepped up cost spaces.
Speaker 4 (34:21):
Well, and the other thing too. To remember, not to
get all complicated, but let's say that that happens you've
got a property that's been exchanged multiple times, you get it,
you decide, you know what, Dad was pretty good at this,
so now I'm going to do that. When you take
the title of that property, it's in your personal name,
so if you're married, your spouse doesn't get to go
on there. But I had this last year John with
actually with one of your clients, and it was the
(34:41):
first time I had seen it. He held that as
an individual person inside their revocable trust and it was
a separate set aside, so technically his wife had no
control over, but it was still in their trust, and
they had a pretty savvy accountant that had it all
set up. And this gentleman, remember I sold them the
property at ten thirty one after his I think he
(35:02):
was his dad passed away, we sold it again. You know,
this was ten twelve years later. Now he moved it
from Reno up to I think they want somewhere up
in Montana or somewhere close to this. So it was
just very This all boils down to it's worth the
one thousand, two thousand and three thousand dollars whatever's going
to cost to get the experts to come in and say, hey,
this is how you do it. This is how you
(35:22):
do it, because you know I've seen people piss away inheritances.
Speaker 2 (35:26):
Yeah, no, you're absolutely right. All righty folks would just
touch the surface. We'll continue on this topic at another
show in the meantime. Thank you for joining us. Gott
bless you have a great day. We'll see it tomorre
on the John Sanchez Show. See you boy. S.
Speaker 3 (35:36):
Dwaighte Millard n MLSID number two four one two five
nine a license mortgage Loan officer with Highlands Residential Mortgage
Limited and Equal Housing Lender and MLSID number one three
four eight seven one.
Speaker 2 (35:48):
The information shared on this live broadcast is for general
information purposes only and does not constitute financial or mortgage advice.
Speaker 3 (35:55):
Listeners should consult directly with a licensed mortgage professional for
guidance tailored to their specific situation.
Speaker 2 (36:01):
All loans are subject to credit approval and program guidelines.
Speaker 3 (36:04):
Not all applicants will qualify.
Speaker 2 (36:06):
Loan terms in availability may vary by state and are
subject to change without notice.
Speaker 3 (36:11):
Highlands Residential Mortgage Limited is licensed in multiple states.
Speaker 2 (36:14):
For a full list of state licenses and disclosures, please
visit https slash slash www dot highlandsmortgage dot com backslash
licenses backslash. The views expressed during this program are their
own and do not necessarily reflect those of Highlands Residential
Mortgage Limited,
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