Neighbor's pool encroaches

Q. My daughter purchased her first home last year. During closing she was given a property map. Someone casually mentioned that the map indicated the backyard neighbor's fence actually extended about 3 feet onto my daughter's property.

We have no idea whether or not the sellers had some sort of agreement with these neighbors regarding the fence. By the way, their pool appears to extend into that 3 feet.

Is this something my daughter should be concerned about? Is she liable if something happens? Or is the property now part of the neighbor's yard? Could this be a problem if she decides to sell years later? Who should she contact? What sort of information should she seek?

A. I assume the property map your daughter received was an up-to-date survey showing the neighbor's encroachment. If she had no trouble getting a mortgage loan, title insurance and property insurance, there may not be any problems. But all your questions are good ones, and she needs to know the answers.

Whoever handled the closing should have made sure she understood the situation. That's the person to contact now for explanations, and she should mention that pool.

Q. I'm reading an answer you had written ... sometime ago about getting out of a timeshare. What if you don't pay your fees? I'm trying to get out of a timeshare in Maui. This has been the most frustrating experience I have ever had.

A. I assume you've asked the management to take the timeshare back? And that you've advertised it for free (or perhaps for just the legal costs of transferring ownership?)

I'm not going to tell you to stop paying those fees. But I will suggest you ask your lawyer whether anything bad is likely to happen if you do. Be sure to explain that the timeshare is located in a different state.

Q. We are looking to buy a new home in the next couple of years. It's easy to figure out how much a mortgage would be, but I'm having a hard time trying to decipher how to figure out the local tax rate in any given place. Is there an easy way to understand how to figure out what my monthly tax hit may be in any given location? That would make it easier to narrow down places when looking into areas online in other states.

A. Finding your tax rate isn't always a simple process. It is dependent on the percentage of market value assessed, state regulations, frequency of reassessment and sometimes other factors. You'd do better to search the Internet for average tax as a percentage of market value. I did so, and the figures were fairly easy to find for various states and even counties.

Any house offered for sale online will have the annual tax listed along with other information. It should state the "true tax" figure, which is not always what the current owners pay. That's because in various areas taxes may currently be discounted for religious organizations, veterans, seniors on low income or other classes of homeowners.

In some locations, you'd pay the same tax the sellers now pay. Elsewhere, a new assessment might be based on your purchase price. Where values have risen sharply, that practice has sometimes been known as "soak the newcomers."

Q. My wife and I have a piece of property we would like to give to our grandson. He lives on the property since he has had some financial difficulties. Someone said all we needed to do was to quitclaim it to him. Someone else said there would be some tax issues involved. Need a little guidance.

A. The federal government says you can give your grandson up to $14,000 a year free of gift tax. So can your wife. The rest of the value of the property will be subtracted from what you could leave tax-free at your death. Federally, that's currently $5 million. You may have to file a gift tax return, but you shouldn't need to pay any actual tax.

There is one consideration, which may matter if the place has increased a lot in value since you bought it. If your grandson waits to inherit the property, then he gets it with what is called a stepped-up cost basis, or the value around the time of death. If he ever sold it for that amount, there'd be no capital gains tax.

If, on the other hand, he receives the property as a gift, he also takes over your present cost basis. Depending on the situation, this may or may not be important. And sometimes future Medicaid qualification might need to be considered.

The simplest thing is to discuss the whole thing with a lawyer. You'd want one in any case, to draw up that quitclaim deed.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

© 2015, Creators Syndicate Inc.