Wills, trusts allow homes to be passed down to heirs

Q. I have a few questions about assigning beneficiaries to the title of our house. The house is paid for and my wife and I are both retired. She is 67 and I am 68. We would like to name our two sons as beneficiaries so the house does not go through probate. How do we go about this? Do we need a lawyer? What if one of us outlives the other? What if we want to sell the house after naming beneficiaries?

A. The simplest solution is for you both to make a last will and testament. Maybe you have a special family reason for wanting to avoid probate, but it really isn't that complicated. I hope you're not wary about it just because someone is trying to sell you something.

One approach is to put the house in a trust and name your sons as the beneficiaries. Doing so will avoid probate, but the property will still be counted as part of your estate for other purposes. Trusts can be complicated, so you'd want to discuss the matter carefully with your attorney.

Some states allow a transfer-on-death deed, which transfers the owner's real estate to a designated beneficiary after his or her death. But this wouldn't suit your situation if one spouse survives the other.

You'll need a lawyer no matter what you decide to do. One of you will probably outlive the other, so you'll want to make sure to protect the survivor's interest.

Q. I have been a typographer for decades, starting in 1943 in a small town. I read the classified ads every week. I am astonished when I see an ad written in all capital letters. Since they use a 5- to 6-point type in condensed form, capital letters are nearly impossible to read and take up more space than uppercase and lowercase letters do. I am floored and never read these ads.

When has anyone ever read a book or newspaper article printed in capital letters? Johann Gutenberg is probably rolling over in his grave by now.

A. Once in a while, I receive an email or a letter printed in all caps. You're right: All caps is so hard to read and there's a temptation to ignore the words entirely.

As it happens, I, too, learned to typeset in 1943 in a small town; I learned in the print shop behind The Chronicle Express in Penn Yan, New York.

Q. I have lived with my girlfriend in her townhouse for the past eight years, and I have helped pay the mortgage every month. We would like to add my name to the deed to make me a co-owner. What steps does this require?

A. Decide ahead of time if you will both have an equal share in the townhouse. Also decide, if one of you were to die, would the other automatically become the sole owner? Or would either of you prefer to leave your share to other heirs? These considerations will determine how your names should be written on the deed.

After that, it's pretty simple. Your girlfriend will sign a new deed naming the two of you as owners. Her signature will be notarized and the new deed will be entered in your county's public records office. In theory, you could do this yourselves. However, the deed must be written properly, including a legal description of the property, to be accepted for filing. Any lawyer can take care of this routine matter for you.

Q. We bought our house in 2002 and have been making additional payments toward the principal every year. I recall reading in your column that making one additional payment per year would reduce a 30-year mortgage to about a 17-year mortgage. However, when doing the math, it looks like it will take us 25 years to pay off our mortgage. Does amortization affect the number of years?

We have resisted refinancing because we are currently paying more principal than interest, and we don't want to start over with a new amortization schedule. Is this a good idea?

A. Years ago, I wrote that making one extra payment per year to reduce the principal would cut about seven years off a 30-year mortgage. Interest rates were higher then, which might affect these calculations today.

Keeping your 2002 interest rate is not a good idea; the sooner you refinance the better. Sending in extra principal payments is fine, but if you don't refinance you'll be paying more interest than you need to.

As for a new amortization schedule: At this point, refinancing to a 15-year mortgage should bring you down to an even lower interest rate.

• Edith Lank will respond personally to any question sent to www.askedith.com or edithlank@aol.com or to 240 Hemingway Drive, Rochester NY, 14620.

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