When a home sale will lead to capital gains

With home prices climbing, some sellers are concerned about capital gains taxes. If you bought your home more than 20 years ago and/or you live in a hot market, it’s possible your home value has increased to the point where capital gain taxes would kick in. Currently, if you sell your primary residence you can keep up to $250,000 in capital gains tax free. If you’re married, you can keep up to $500,000 in gains. Any significant improvements you’ve made on the home can decrease your tax calculations. For example, let’s say you purchased the home for $150,000. Over the…..

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Know the difference between ‘per stirpes’ and ‘per capita’

When making a will or designating beneficiaries, you can make bequests to your heirs on a “per stirpes” or “per capita” basis. Per capita (by head) means your gifts will be divided evenly among your surviving beneficiaries. But if one of your beneficiaries dies, a per stirpes (by branch) designation means their inheritance will be passed on to their heirs. Let’s assume you have two kids, John and Paul. John has one child and Paul has two. For easy math, let’s assume you have a $1 million estate. Per stirpes. In your will, you stipulate your estate should be distributed…..

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Are handwritten notes on a will enforceable?

This is a common scenario: Family members have a copy of a loved one’s will that’s been edited with handwritten scratch outs and addendums. Is it legal? Will a court enforce it? The answer is that it depends. First of all, it isn’t recommended to make handwritten notes on estate planning documents. Those notes can create a mess for heirs down the road. They can open the will to challenge and complicate the probate process. To make a legally enforceable change, you have two options: 1) Replace the prior will with an entirely new document, explicitly stating that all prior…..

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Handling guns in estate planning

If you’re a hunter, you enjoy recreational shooting, or have family heirloom guns in your collection, you should consider whether your estate plan includes adequate measures for passing on your guns. Without proper planning, your executor or beneficiaries could unintentionally break the law. The first thing to consider is who can legally inherit a firearm. Under the Gun Control Act, several categories of people are federally prohibited from owning guns, including felons and people with mental illnesses, dishonorable discharges, domestic violence convictions, and domestic restraining orders. It’s possible that you may not be aware of what’s going on in your…..

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Legal foundation takes aim at ‘home equity theft’

When a property owner falls behind on their taxes, it’s customary for local government to seize the property and sell it off to satisfy the debt. In most states, the local government keeps only the proceeds necessary to satisfy the debt and cover administrative fees, then returns any excess proceeds to the property owner. In a dozen states, however, governments can keep the entire sale price. It’s a windfall for the government and unfair to the homeowner who built up equity. Critics call it “home equity theft.” It’s not hard to see how the practice can lead to abuse. In…..

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Time limit on asserting property rights

Assert your property rights, or lose them. That’s the takeaway from a recent decision from the California Court of Appeal. In the case of Johnson v. Little Rock Ranch, LLC, the appeals court upheld a lower court ruling that ordered a property owner to sell a portion of their land to an encroaching neighbor. The case illustrates the broad discretion courts have in determining how to resolve encroachment disputes and highlights the importance of maintaining and protecting one’s property boundaries. The California case centered around two adjoining parcels of land, a 677-acre northern parcel and a 210-acre southern parcel owned…..

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Judge halts ban on real estate ‘love letters’

Would-be homebuyers are still allowed to write personal letters to home sellers in Oregon. That’s after a federal judge granted a preliminary injunction against a law that bans them. In 2021, Oregon became the first state in the nation to ban homebuyers from writing so-called “love letters” to sellers as a way of improving their chances of being selected to buy a house. HB 2550 prohibited letters, photographs, and any written communication outside “customary documents.” Supporters of the law say that personal letters fuel housing discrimination because they can reveal a buyer’s race, religion, sexual orientation, or other protected class……

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Constitutionality of short-term rental restrictions in question

A judge in Tennessee recently ruled that a local restriction on short term rentals unconstitutional. Judge Robert E. Lee Davies of Sumner County concluded that the ordinance in question “does not promote the public interest as a whole. … Instead, it promotes some private owners’ interest over other private owners’ interest.” Further, the ordinance acts as an “unconstitutional infringement upon a property owner’s fundamental right to own, lease, and dispose of property in a lawful manner because it destroys the homeowner’s right to lease his property on a short-term basis,” the judge said. City officials maintain that there is a…..

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Making the most of restricted stock and RSUs

Restricted stock and restricted stock units (RSUs) are two alternative forms of employee compensation. They’re a way for a company to incentivize employees with equity in the company. Restricted stock is typically granted as a type of bonus or added compensation, using a vesting schedule. You receive partial ownership of the shares and may be entitled to voting rights and dividends before they vest. Until the stock is vested, however, you can’t sell it. If you leave the company before you vest, you lose your shares. RSUs on the other hand, give you stock once you meet vesting requirements. You…..

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Including life settlements in your estate plan

If you have a life insurance policy you no longer need, you may be able to sell it for significantly more than its cash surrender value (CSV). A life settlement is the sale of a life insurance policy to a third party. The sale can provide the policy holder with more than the CSV and even more than the premiums paid over the life of the policy. Life insurance settlement companies buy policies and then continue paying the premium with the expectation that they’ll collect the death benefit. That means these companies typically purchase policies from people who have life…..

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