Mum was a Survivor

Hi Scott,

I’m 48 and a stay-at-home mum of three children. Until recently I was also carer of my mum, but sadly she didn't survive heart surgery. She kindly left her house to me. Due to grief I am unsure what is the best way to honour her, as she was a single mum and a victim of domestic violence. Our home loan is $405k on our home which is worth $800k. Mum's home is worth $700k, and has a reverse mortgage of $126k. My husband is 50 and earns $105k p.a. Do we sell Mum's home or keep it as a rental?

Denise

Hi Denise.

If I were in your shoes, I’d sell your mum’s home, pay down the reserve mortgage. After accounting for selling costs, you should come out with roughly $560,000 (and, importantly, you won’t pay Capital Gains Tax if you sell your mum’s home within two years of inheriting it). I’d save three months of living expenses (which will be dramatically lower when you don’t have a mortgage). With the balance, I’d do two things: make an undeducted contribution to an ultra-low cost super fund, and a donation to a domestic violence shelter in your mother’s name.

Scott