Dying not enough to erase debt

DEAR BRUCE: My sister?s husband is terminally ill, and he has credit-card debt in the amount of $28,000. He says that, since the cards are in his name only, my sister would not have to pay them. Is this true? ? G.R. in Florida

DEAR G.R.: I hate to be the bearer of bad tidings, but first of all, when this gentleman passes away, his estate is obliged to meet all of his bills and the $28,000 in credit-card debt comes under that category. In the event there is no estate ? in other words, he dies broke ? the creditors will look to the wife for recovery because the debts were incurred during the marriage. You can?t cheat your creditors just by dying.

DEAR BRUCE: We are contemplating building a fence between our neighbor?s house and our own. The problem is, his survey shows the line to be one place and ours another, with about a four-foot difference. Before we install an expensive fence, we would like to know which line is correct. How do we tell? ? T.C., Vernon, Utah

DEAR T.C.: It seems to me the logical answer would be to hire another surveyor to shoot that one line. You don?t need to have the whole property surveyed. If his survey agrees with one or the other, the likelihood is that?s the spot.

If, however (perish the thought), he comes up with a third line, then you are going to have to come up with a very careful survey by yet a fourth person for the entire property and perhaps your neighbors as well. While this might seem like a lot of money to spend, I assure you that you had better get it done right now because, with this ambiguity, neither of you will be able to sell your home if the appropriate lot line is not resolved.

DEAR BRUCE: I have a friend who is living with her boyfriend. She has another house whose value is between $60,000 and $75,000. It is an older home she had rented to her son, who is now moving out. She is coming up on the five-year time that she can take all of the money and keep it, claiming this as her primary residence. She?s trying to decide whether she should keep it or sell it. I should add that her boyfriend wants nothing to do with maintenance or taking care of the home. ? Reader in Michigan

DEAR READER: In my judgment, this is a perfect example of a home that should be sold. If the lady in question owned the house for some time and had a significant gain, this would become taxable should she not take advantage of the two-year/five-year residency law. In addition, if the boyfriend is not willing to help out, who is going to handle the maintenance? All things considered, I would put this house on the market immediately.

Interested in buying or selling a house? Let Bruce Williams? ?House Smart? be your guide. Price: $14.95, plus shipping and handling. Call: (800) 337-2346.

DEAR BRUCE: You have mentioned from time to time about a “rule of sixes” that helps people plan for retirement and shows how a person’s money grows. Could you explain this to me? — T.R, via e-mail

DEAR T.R.: What you are referring to is the “rule of 72.” Simply put, you divide the amount of interest that is accruing in an account, take 12 percent, for example, and divide that number 12 into 72. Your answer is six, which means your money will double every six years at that rate of interest or growth, assuming taxes are paid from some other source.

For example, if you have $1 and it is invested for 42 years, it will double seven times: 1, 2, 4, 8, 16, 32, 64, 128. At the end of the 42 years, the $1 will have grown to $128. The numbers are not quite as impressive in shorter periods of time, but compounding is a wonderful phenomenon not to be ignored.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: [email protected]. Questions of general interest will be answered in future columns.