<p>bonnie - Thank you! I had no idea exactly what to ask for or what to deduct.</p>
<p>somemom - Good idea. I’d have to have someone else be the owner or it’d show up as my asset though, correct? Kids it would affect are 17 (college freshman), 16, and two 6 year olds. The 17 & 16 yo are definitely college bound and parents have ZERO saved for them. One of the 6 y.o. seems to have a learning disability and the other seems scary bright but they’re too young to predict. Maybe a UGMA?</p>
<p>As the laws stand now, don’t do a UGMA! That is considered the student’s asset and is “taxed” for FAFSA purposes at a much higher percentage being available for college. </p>
<p>How to avoid the money being considered “yours”, and yet not be the kid’s . . . hm, that’ll take some thinking!</p>
<p>How about your other sister, the house partner, is she dealing with financial aid?</p>
<p>No, the “good” sister’s oldest is only in 3rd grade. She might be an option for the teenagers but not for the 6 year olds as her income is already quite high.</p>
<p>Just a quick thought – depending on how you’re inheriting the house, it may well need to go through probate before the title is changed. While it is still in probate, it is not an asset of yours, and thus doesn’t need to be reported. Legal action on the part of any of your siblings could slow probate down measurably. Even if it doesn’t need to go through probate, if legal action is threatened or underway, it may still not be an asset. If you’re the executor, you might get some advice on this – my dad’s estate took nearly two years to finish probate because the company he’d retired from had filed bankruptcy, and stuff was a mess.</p>
<p>This is tough stuff to deal with on top of trying to cope with your mom’s death. Hang in there.</p>
<p>On passing assets to the grandkids - would it be possible to put their share of the estate into a trust and have the trust be the owner of the 529s? Or, could the trust just be set up to hold the money for them period until they are say 25 and then they can use it to pay off college debts?</p>
<p>I was thinking about this since the other day, and wanted to get you info on the aspect of market value, but I see that someone has already thought of that and I can’t add to it. However, look carefully for a good real estate broker, since that is important. Also google or check MLS yourself for the comparables that are listed and recently sold. I think this helped when we sold my mom’s condo.</p>
<p>Maybe you are right about giving the money to the kids in some way. This would certainly cut off discussion (I think.) I know of someone who had an uncle who left the money (intentionally) not to his neice and nephew but to their children (the uncle had no kids, wife, etc.) Best of luck to you.</p>
<p>arabrab - Yes, I am the executor but the house is not part of the estate. The house was deeded to us 4 years ago and the covenant guaranteeing her life use of it expired with her passing. It was all done by a good lawyer who assures me that the house cannot revert to the estate (I asked because I initially thought it might be better if it did!)<br>
I don’t think I can put any share of the estate into trust - there is a will stipulating that goes directly to me and my sisters. Only the proceeds of the house, which are outside the estate, are at my discretion as they would technically be a gift from my co-owner sister and me.
Thanks for the good thoughts though! I’ll see if her financial guy has any…</p>
<p>Do any of you have experience borrowing equity out of an investment property or second home? We have 100% equity in this inherited house but all of the local banks (big commercial and S&L) my sister and I normally deal with told us a home equity loan is not an option as the house is not owner occupied. We don’t really need all the money up front (ie mortgage) and would prefer a loan that lets us take flexible “draws”. Also, as we plan to sell with a few years, we’d like to keep our up-front borrowing costs or back-end early termination fees down. The only thing I can think of is for one of us to take a home equity loan against our own homes but I’m not keen to do that on mine and not sure if she should be either! Any ideas/experience with this?</p>
<p>Why not take the mortgage out of the investment property (which lowers the equity you have in it) and use the proceeds to pay down the mortgages on your primary residences?</p>
<p>Custodial 529s might be the way to go for your neices and nephews. These are 529 accounts in the child’s name, as opposed to regular 529s which are in the parent’s name for the benefit of the child. They will not be reported on your daughter’s FAFSA because they’re not a parent asset. However, custodial 529s are restricted in that the money in them can only be spent for the benefit of the child named on the account (with regular 529s, the money can be transferred out of one child’s account and into another, with no penalties, as long as the money is being spent for education). So you should only set up a custodial 529 for those neices and nephews that you’re 100% certain will have educational expenses.</p>
<p>Well, after long discussions while packing up the house today, my sister and I have come to the conclusion that we should sell “as is”. We don’t really want to be in the landlord or house-flipping business and since we have both been diligently working toward debt free living it just doesn’t feel right to have to start borrowing. Not to mention our strong need to get a life again! Several people approached us this week about selling the house so a quick sale before year end looks very possible and will hopefully put the rest of the siblings at ease. If I can get it ready and on the market in a few weeks I can finally return my attention to helping my daughter with her college plans!</p>
<p>Many Thanks to all of you for the thoughtful advice and kind words - it’s been incredibly helpful in clarifying issues that seemed overwhelming when I started this thread.</p>