Change the Locks

Posted: Nov 14, 2017 12:01 AM

Dear Edith: When you wrote about real estate closings, one of the things you did not mention was to change the locks, or have the lock cylinders changed, so that the old keys no longer work.

We trust that the old owners would not have kept any keys, but we don't know who else might have been given a hard copy over the years, like a house sitter or tenant. -- J. M.

Answer: You're right, of course. Sellers should turn over all keys to the buyers. Then, prudent new homeowners should call a locksmith promptly to make the changes.

Cottage Dilemma

Ms. Lank: We've owned a cottage for 28 years, and we are getting up there in age to where chores are too much. We plan to sell next year. Our son, who lives seven hours away, has expressed an interest in having it after we pass away. Despite the reality of the distance and the upkeep, and the fact that he is 15 years from retirement, he professes to love it as much as we do, and we would love for him to have it. However, our son can't afford to buy it now, and we can't be caretakers for the next 15 years!

We also have a daughter, and our wills, which were redone professionally three years ago, split everything 50-50 between them. We want to keep it even to prevent any arguments.

Should we have our home appraised? We've had three Realtors come out, and we have a ballpark figure of what we can hope to get.

What are the tax ramifications -- for either him or us -- of signing it over to him next summer? We realize he'd get that much less from our assets. The problem there, which looms over us all, is the possibility of one or both of us entering a nursing home and the assets being wiped out. I assume he'd have to settle up with our daughter in this case. -- C. J.

Answer: Your ballpark figures would probably be enough to use, just for keeping things even in the family.

If you give the cottage to your son next year, he will also receive your cost basis. If, on the other hand, he waits to inherit it, he'd have a new cost basis based on the home's value at the time of your death(s). But all that might affect the capital gains tax if he were to ever sell the home.

In any event, is your son at all in a position to take over those chores next year?

If you still want to use the cottage but are not up to the work, why not hire a maintenance crew? One of the local real estate agents will know where that's available.

Or, if you no longer want to use the cottage, I suppose you could hire an agent to rent it out till your son is ready to take over -- assuming he will still want it 15 years from now.

As far as the IRS is concerned, each of you can give each of your children an annual gift of $14,000 per year. Beyond that, you should report the gift, but there's no actual tax. The rest would be subtracted from what you could leave tax-free when you die. For the Feds, that's currently more than $5 million.

You didn't say whether the cottage is located in a state that levies a gift tax, though. Nor do we know any of the dollar amounts involved. It may be time to consult a lawyer who specializes in estate planning.

Golf Course Cozy

Dear Edith: In response to your reader fed up with the homeowner's association and its cozy relationship with the owners of the neighboring golf course: As a former HOA board member, it sounds as if the HOA board members may have a conflict of interest between their relationship with the golf course and their fiduciary duty to the HOA.

The reader may want to check the HOA bylaws or other governing documents to see whether there is a policy on conflicts of interest. I'm not sure what the reader would do if the board weren't following policy. Maybe complain to the state attorney general? Just a thought. --

Answer: As it happens, that reader was putting his apartment on the market anyhow, so I don't suppose he was in the mood to follow through with a complaint.

Contact Edith Lank at, at or at 240 Hemingway Drive, Rochester NY 14620.