Real Estate Advice for Couple With 2 Homes

Winni Wintermeyer

The problem

Where shall we live That amazed the Californians Pamela Parkinson (69) and Tom Josa (67) as they prepare for their wedding. She, a divorced psychologist, and he, a widowed doctor, now retired, both own houses which constitute the lion’s share of their respective fortunes. As it is, however, no home feels suitable for living together. Their further concern: If one of them dies, they want to make sure that the other can stay. Selling either residence can create a huge tax burden on capital gains. And Tom has two grown children whom he would like to take care of after he dies. “We want to make sure we’re not doing anything stupid,” wrote Pamela.

The advice

Some financial matters can be handled by a single practitioner. This required a kitchen sink with experience. I turned to Rapid City, South Dakota, financial planner and therapist Rick Kahler; Estate planner Scott Harshman, based in Irvine, California; and Long Beach, Calif., accountant Donita Joseph. A plan emerged from their ideas.

1. Weigh your wishes before taxes.

“If there wasn’t a tax problem, what would you really want to do?” Asks Harshman. “Don’t do anything just for tax reasons.” (This is good advice in almost any situation.) “Don’t lose sight of your ultimate goal,” he says. Pamela said they would either buy an apartment together in her neighborhood or renovate Tom’s house; Their house felt too small to share with them, and if they sold a house it would be theirs. If that’s the case …

2. Go home shopping.

The couple toured the few houses for sale in their town but found they were missing it. So I asked how they were going to renovate Tom’s house to make it work for them. On the wish list: office space for everyone and a music room. “We don’t want to downsize,” said Tom. “We want something that we both feel really good about.”