All Forum Posts by: Lynnette E.

My parents a long time ago had one of those situations.  The renter's husband unscrewed the water from the washer to connect the garden hose to the water connection and ran the hose outside to wash his car while the other water hose was in use, forgot what, maybe kids playing in the sprinklers.  Anyway, he finished and turned the water off at the washer connection and did not screw the washer hose back in.  Wife renter then went to  wash clothes and the water did not come on to fill the washer.  So she remembered husband used the connection and turned the water on and heard it running and walked away. The washer hose was NOT screwed on though.   They left, went to grandma's, stayed out late.  Returned home and all went to bed.  The next day they woke up and water was throughout the kitchen, dining room and living room and the enclosed patio.  The washer connection on the wall was still running water onto the floor.

They lied to my parents.  Said there was a water leak in the slab somewhere.  Neighbors told my parents what really happened as they were trying to find a water line leak, but the water meter was not spinning when the water was off.  Renters had already left for the weekend at my parent's expense.  

Flooring, drywall, insulation, paint, cabinets--full of food that was soaked and a mess!  The insurance declined the claim saying it was not covered.  It definitely cost my parents more than a years worth of rent to fix, and us kids did a lot of the work.  We took our time so we could justify why the renters needed to move on--more than 30 days to fix--even then they wanted my parents for pay for their wet stuff.  Nope.  They already felt bad that they paid for the weekend when it was the renter's fault, not the plumbing.

Get a used refrigerator to go in the place and store the old one until they leave.  DO NOT buy them a new one, just any old used one that fits in the space.  Tell them you will never buy that kind of frig again with how many times it has broken!  Plus there is no shipping date even given for things like that right now.

If they are unhappy, let them break the lease and move on.

I'd also tell them that they can treat your repair people with respect.

I'd give the deposit back to them and ask them to sign a release for both you and them.  They could go after you for damages--having to move because of the roach infested home, all of their moving costs, they having to fumigate their stuff, because otherwise they likely took some with them, their rashes and allergies, and so on.  You are in CA and have higher standards that most places.  Renting a house with roaches makes it not habitable.  Roaches are HARD to get rid of.  You should get an annual contract that sprays monthly for at least a year or two.

 Wow!  Maybe Dad's crew is looking for work!  Make sure you go with licensed and insured, and decent price.  Also, you should think about what will happen once the block wall is up.  If the renters still hose the waste material it has no where to go but soak into the cement and blocks, so that will smell horrid and ruin fresh cement.  Can they get the artificial dog grass and make a set up for their dogs to use that?  You need some sort of a plan for how they manage the waste since the water now has no where to go with a block wall.  There are several dog waste systems with a tray that collects the urine and artificial grass for the dog to use.

I had one house where you have to push down on a bubble to open and close the tub drain.  4 adults and one autistic child lived in the house.  Only the kid knew how to work the drain.  My plumber did an on-site lesson for each of the adults to show them how to open and close the drain.  The adults would take a shower and the water would not drain and they would call me.  Seems the kid took baths and after the tub drained he reclosed the drain.  No calls after a complete class on how to work the drain...so sad!

You may be able to add your name to the deed.  But you should just get a loan, probably not a mortgage as the amount owed is too low for that and have your mom formally deed it to you.

 There is a big disadvantage for selling the property as you age.  Unfortunately capitol gains taxes will gobble up your profit, plus recapture on depreciation.  Right now, if you pass your heirs get a major tax advantage the value of the property is what an appraisal shows it is on the day you die, and there is no depreciation recapture.

So its something to think about.  Personally, I will likely make my kids sell the properties and I will save the tax money, unless the law changes in the years to come.  But my daughter likes doing the rental stuff, so she may just manage them and take a 10% PM fee and distribute the income to the heirs.

When you are interviewing the attorney, they are also sizing up their client.  It could be that the attorney thought that because of their age and understanding of wills, trusts they may take a lot of time to educate on how to run/manage a Trust.  A Trust is not just for end of life planning, but also about how the property is managed and used during the life of the Trustor.  

It may that the attorney thought that it may take a lot of time to get the basic answers in order to write a Trust because the estate plan is not well thought out or the people may not be in agreement.  

Things that the attorney needs to know that may be hard to figure out if there was not a lot of thought and discussions prior to the meeting with the attorney:  Can the Trustor sell the assets of the Trust, if so, how are the funds then used?  Can the Trustor spend the assets for his/her life expenses at will or are they to be reinvested into new Trust assets?  Or do the funds get distributed to the beneficiaries?  How long is the Trust to last before it expires?  Does it end after the death of the Trustors and the assets get distributed then, or does it end at a specific date, or at an age of a beneficiary or when?  What if a beneficiary passed away, is that share redistributed to other beneficiaries or passed on to a specific heir of the beneficiary  (e.g. eldest son).   Once the Trustors pass who will be the Trustee?  A bank, attorney, CPA, financial planner will charge and may consume more of the Trust than the beneficiaries get and it can be hard for beneficiaries to fight large companies with attorneys in their office...and some can be corrupt and self serving.  Most will also sell rentals and invest in stocks or something that is easier for them to manage and that they get a commission on each buy and sell.  If you use a family member or friend that person may self serve or be untrustworthy and may be honest, but hated by the beneficiaries in the end because they follow the Trust and the beneficiaries want more now.  Can the Trustee sell assets and reinvest or only distribute? What can the Trustee do if an asset is going downhill, in need of repairs or just no longer a good investment?   How does the Trust hold and manage money for things like insurance and taxes?  Can Trust assets be sold to fund other asset's day to day costs?  How much cash / income generated should the Trust be allowed to hold?  What is to be done with the funds if they are higher--distribute, buy another asset?  Does the Trustee get paid, how much, based on what?  Does the Trustee need to be bonded or insured?   Can the Trustee take out loans on Trust assets?  You get the idea.  

The attorney may have felt that the elderly couple would be in over their head in a Trust without a lot of time spent explaining it and discussing each issue.  

You need a will, always.  Even if your bank accounts and brokerage accounts have a beneficiary and your real estate is in a trust or has a transfer on death deed and your vehicles are titled jointly with someone else, you need a will.  Otherwise there is not a way to distribute your socks, underwear, well your computer and other material things.  Without a will no one is obligated to bury you or cremate you, so your ashes may be tossed on the potter's field.  If you die in an accidental death situation your estate may get a settlement on your behalf.  There is not a way to transfer that to who you want to get it.  A will wraps up the loose ends.

You can avoid probate by having a small estate without real estate and no one to fight and challenge anything.  Or have the real estate titled to allow transfer without probate--joint tenant, transfer on death.  I will warn you to be wary of using a transfer on death deed unless you specifically determine how the title companies regard that form of transfer in the state where the property is located.  I received property in CA under a transfer on death deed and many of the title companies were a royal pain.  They wanted to go through a mini-title company directed probate.  So I had to 'prove' that all medical bills were paid (impossible as how do I know when 'all' have been submitted to the insurance and processed?  NOONE would talk to me about a dead person's medical bills.  How do you know who the patient saw in the hospital, there were many, many doctors and others billing from the hospital.)  I had to show all credit card, utility bills, etc. were paid.  Same issue with these entities talking with me, even when given a death certificate.  So I really recommend you talk to a title company about what your heir would need to do to sell the property with title insurance after your death if you use a transfer on death deed.  

The cost of a simple Trust should not be that high. I paid $3500 for me--one person. They also did the quit claims to transfer all property into the Trust and set it up to include a special needs Trust within the main Trust for a special needs kid I adopted. The next Trust I got cost $550, yep less than $1000 and holds other properties with similar structure, but more investment focused. It would be more if you were married. And my prices also included a medical POA and will.

Even though the cost is similar to what one would pay for a simple probate, a Trust has other advantages.  Your heirs do not have to go through probate.  Probate can take months to years, which in some cases, leaves property subject to vandalism and rentals mismanaged.  It can cost a lot with a complex estate such as several properties in different locations.  Others can not challenge a Trust as easily as probate.  Trusts are private.  Probate is public.  It allows you to control how the assets are distributed, like some at death, but some at age XX, or some for education, or some for medical bills.  It can prohibit the money from being used for other things such as can not be used to pay for court ordered fines or lawsuit settlements or divorce proceedings, including attorneys.  It can have restrictions such as has to be drug free to get a distribution or should the beneficiary decease prior to the assets being fully distributed the beneficiary's share passes on to the beneficiary's blood or legally adopted children.  The beneficiary's share can not be passed to a spouse or step child.   Trusts keep beneficiaries from co-mingling the assets as some beneficiaries do not understand that co-mingling an inheritance makes it community property in many locations.

So shop around for prices, get a trust and a will!

 For a lot of places in CA the wealthy will pay a premium for a nice big house and do not want to be near lower income people who are more likely to rent a duplex type house.  With the housing shortage, those bigger properties are worth more and going up in value faster than the duplexes.  Many duplexes actually get torn down so someone can built their big house.  Plus investors buy the duplexes that remain as duplexes and they often don't want to over pay.

I would think that a large single family with an ADU would be worth more than either a single or duplex.

BP fans seem to like the small multi-family because it can bring in a larger income than a single family and they think has less risk, less maintenance.  Personally I have both and my single families have much less turn over, less maintenance, and better quality of applicants.  Plus with single family all the lawns, utilities, etc. are the tenants responsibility.  With the small multi the common areas and some utilities, and trash  are my time and cost.  When the trash is a single family and some dog knocks it over the tenants pick up the mess.  At the multi, they call me.  That trash belongs to no one.  The small multi does bring in $, but it take a lot more effort from me.