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Kirsch & Associates - Southlake, TX

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Finding Solace during the Holidays

| November 27, 2018
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Our Dwellings Shape Us

I’ve been thinking about our homes and how they can bring us solace during the holidays but also give us constant reminders of the loss of a loved one.  Losing a spouse can make you feel as if you’ve not only lost that special person, but also the very centeredness and comfort that your partner’s presence and love once afforded.  When you add memories of holiday traditions that can no longer be shared, the outcome can make you feel like the cornucopia after Thanksgiving…empty and a little tired.

While there’s no magic potion to fill that emptiness, I have learned that creating a nurturing and restful place in your home – a secure nest, a sacred space, if you will – can help you sit with the loneliness, pain and chaos that comes along with the holidays. There’s a lot of truth in what Winston Churchill said: “We shape our dwellings, and afterwards our dwellings shape us.”

Turning your den into an arts and crafts studio, planting a lush backyard garden, or just brightening up an existing room can help to make your home the sanctuary you need to find rest during the holidays as you safely, gradually heal and build a fulfilling new life for yourself. And yet many widows find they have a conflicted relationship with their homes when they are hit with their property tax bill at this time of year.  “Were my property taxes always this high?” and “What happened to my homestead exemption?” are some of the most common questions I hear raised by widows.

Understanding and taking advantage of the homestead exemptions for which, you qualify is one way to help ensure you protect your home equity against creditors and reduce your property taxes allowing you the means to make those important home transformations, as well as protecting your budget.  But rules to qualify and amounts for these exemptions differ by state.

Homestead Exemptions

In Texas where I live, for example, a surviving spouse must refile for their homestead exemptions including any agricultural or timber exemptions within one year of the death of the spouse.  (Other states, like Florida, do not require you to refile.) Since the property tax exemption is as much as 10% of the taxable value of your home and even more if you’re over age 65 or disabled, missing the deadline can mean paying a much higher tax bill.  In addition, you only have two years after the delinquency date to file for the exemption, so widow’s fog can have serious financial consequences!

Here’s something else you should know if you’re widowed at age 55 or older. If your late spouse qualified for additional exemptions, such as the“65 or older exemption,” you may continue to receive that additional exemption provided that you were 55 or older at the time your spouse’s death and continue to live in the home.

Furthermore, if you are the surviving spouse of a member of the clergy, a disabled veteran, a first responder killed in the line of duty, or a member of the armed services killed in action, under certain circumstances, you may be eligible to continue receiving those additional exemptions as well.

And if you’re age 65 or older and having trouble making ends meet even after your exemptions are applied, consider deferring the payment of your property taxes altogether.  Some states, including Texas, allow you to opt out of paying property taxes.  Upon your death, your heirs will pay 8% interest on top of the outstanding tax balance.  Although this reduces the inheritance for your loved ones, this may be a way to remain in your home longer than otherwise possible.

I encourage you to hire a trusted financial advisor who can guide you and help make sure you don’t miss out on filing or refiling for any exemptions to which you are entitled, as well as help you determine how much you can safely spend to create that special nest within your home. We all need a place that refreshes and empowers us to move forward with confidence and a sense of direction. Feel free to reach out to me with questions or for more information. You can also contact me through FacebookTwitter or LinkedIn.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

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