Questions to consider for retirement needs

REAL ESTATE MAILBAG

April 09, 1995|By Michael Gisriel

Q: My wife and I are approaching retirement. We are both in our early 60s and have two grown children and five grandchildren. We own our home and the mortgage is almost paid off. For estate planning purposes, are we better off selling our home now and taking our $125,000 one-time capital-gains-tax exclusion, or should we keep the house and let it pass to our heirs through our estate. What do you think?

Dean Wistling, Pasadena

A: First, you should know that married couples are permitted to defer their estate tax bill until the death of the second or surviving spouse.

Also, since under existing federal law virtually every American is given a $600,000 unified credit to offset any federal estate tax due, married couples generally will not pay any federal estate tax until their combined estates exceed $1.2 million. Thus, the only issue regarding selling your house and taking your one-time tax-free $125,000 gain from the sale is whether you need the cash for retirement.

Therefore, the key questions for you and your wife to answer are: Do you want to stay and live in your present house? Or do you want to stay and have the house pass to your heirs after you and your wife both pass away? Or do you need the cash for retirement, which the one-time $125,000 capital gains exclusion would bring? Or are you comfortable enough with retirement income to be able to remain in the house?

Q: What is the status of the "lead paint registration" program for rental property passed by the legislature last year?

Robert Hurwitz, Baltimore

A: The law, passed last year, requires owners of older rental properties to take certain actions to provide a supply of low-cost, lead-safe rental housing and allow those qualifying landlords to obtain limited liability protection and more affordable insurance.

The Maryland Department of the Environment (MDE) is in the final stages of drafting regulations to implement the program.

To find out if a particular rental unit needs to be registered, or for more information about the program, call the MDE's Lead Poisoning Prevention Program at (410) 631-3845.

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