Where should we live? It has baffled Californians Pamela Parkinson, 69, and Tom Josa, 67, as they prepare to tie the knot. She, a divorced psychologist, and he, a widowed doctor, now retired, both own homes which take the lion’s share of their respective fortunes. As it stands, however, neither house feels good to live together. Their other concerns: If one of them dies, they want to ensure that the other can stay where they live. The sale of either residence could result in a huge capital gains tax burden. And Tom has two grown children he wants to take care of after his death. âWe want to make sure we’re not doing anything stupid,â Pamela wrote.
Some financial matters can be handled by a single practitioner. This required an expert kitchen sink. I turned to Rapid City, South Dakota, financial planner and therapist Rick Kahler; Scott Harshman, real estate planner based in Irvine, California; and Long Beach, Calif., accountant Donita Joseph. From their ideas, a plan emerged.
1. Weigh wishes before taxes.
âIf there was no tax problem, what would you really want to do? Harshman asks. “Don’t do something just for tax reasons.” (This is good advice in almost any situation.) âKeep your eye on your number one goal,â he notes. Pamela said they would either buy a place in their neighborhood or renovate Tom’s house; his house seemed too small for them to share, and if they sold a house, it would be his. If that is the case…
2. Go home shopping.
The couple visited the few homes for sale in their town, but found them insufficient. So I asked how they would renovate Tom’s house to make it work for them. On their wish list: an office space for each of them, and a music room. âWe don’t want to downsize,â Tom said. âWe want something that we both really feel good about. “