Advice for my mom’s friend

[lostkitty]

She’s coming for dinner tonight… any help would be appreciated.

Here’s her situation:

She is 82, world traveler.
Paid about $400k for her house in LaJolla, now worth 2mil+.
She is pretty $$ savvy and is considering selling and taking out equity… but then what?

my mom thinks she should sit tight, but her friend is a historian and is very worried about the current political atmosphere in the US. She’s considering buying into a retirement village-type or leaving the US completely. Any opinions? Should she sell, rent awhile, then buy into a retirement place afew years from now?

What would you tell her to do if she were your grandmother or such?

[powayseller]

Does she understand the housing bubble?

I think a savvy lady like your friend can make her own decision. My advice would be to give her all the information and graphs in the Bubble Primer and on the Resources link (above user forum link).

[PerryChase]

My auntie, is 84 years old. He sold last year and lived with my dad for a few months. She’s now traveling and plans to travel 6 months out of the year and doesn’t have a care in the world.

She’ll probably rent when she returns; or continue to live with my dad (if they get along). My dad has a 4-bedroom house so I think that it’s big enough for two. I also think it’s good for 2 seniors to watch out for each other.

I told my auntie that with the money she’d spend on buying, she could travel and enjoy herself without touching her savings. She had an eventful life so now is her time to relax and see the world.

In the end, who cares about real-estate. It’s quality-of-life and state-of-mind that counts. Remember the “pursuit of happiness?”

[sdappraiser]

Selling is not ALWAYS the answer, though some here would like you to believe it is. Need more facts, but if she sells a 2M+ house she is going to get hammered with capital gains. She doesnt need to look at bubble primer graphs, she needs to talk to an estate planner and an accountant.

[hs]

When is the time, when she sells her house and she does not need to pay capital gains? If she waits for several years, maybe her house won’t be worth 2M+ anymore.
Yes, she should find a good accountant and hope he or she can give her the best advice. Good luck.

[yooklid]

Sell and move to New Zealand.

[PerryChase]

I didn’t fully answer your question earlier.

Like PS said, if your friend is savvy she can make her own decisions.

But ask your friend to consider the following:

She’s 82 now and loves traveling. How many more years can she travel and enjoy herself? Can she enjoy her $2 million house while she’s away or will it sit empty collecting dust? Costing her gardening and maintenance?

When she’s 90+ will she care to live in such a big house?

I’m 38 and I’ve been humbled and learned a lot being around elderly people. They appreciate living life and being with friends and family. They enjoy sharing wisdom. Most old people I know have no interest in supporting a large home that they have to maintain and be prisoners of.

In my auntie’s example she has no interest in consumption like young career-minded people. She hates restaurants but she appreciates good healthy home cooked food such as chicken vegetable aloe vera soup, or salad with blueberries and pine nuts. I’m happy that she can now travel and meet relatives, old friends from school, and make new friends and expand her horizons.

[hs]

It is good she can enjoy her life like this. The most important thing is she is happy.
I have visited about 30 countries. If I were her, I would sell my house and take the big profit and continue my traveling.

[PerryChase]

HS, I would second your comment.

I’ve been to about 30 countries also (not just tourist destinations). I’m happy that I had a family that encouraged me to see the world. Traveling and meeting people from all over changed me and I see the world differently from my peers who’ve never been anywhere. I feel privileged.

Financial gain doesn’t mean much if happiness is not factored into the equation.

[hs]

Totally agreed. I can see you are an open-minded person. Good for you!

[sdrealtor]

A couple more things to consider:

Does she have heirs? Would they live in the property? She should consider that keeping the property and willing it to heirs will give them a stepped up basis and eliminate capital gains. If she has heirs and they will enjoy the $400K tax basis for real estate taxes as long as they own it. It really depends on what her personal financial situation looks like. If she needs the money, her heirs (if there are any might support her finacially). I know I would!

She REALLY needs to talk to a tax advisor because it is far from a simple question.

[Author]

Posts