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Originally published April 7, 2007 at 12:00 AM | Page modified April 7, 2007 at 2:00 AM

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Home Forum

House raffle may open door to trouble

A reader writes: "I got an e-mail for a raffle that's giving away a $650,000 custom home in California. Raffle tickets are $150 each and proceeds benefit..."

Seattle Times staff reporter

Q: I got an e-mail for a raffle that's giving away a $650,000 custom home in California. Raffle tickets are $150 each and proceeds benefit a California church. Is this legal?

A: House raffles pop up every few years. Sometimes they require entrants to write an essay and award the home based on that; sometimes they don't. In either case you're wise to be cautious because such raffles have inherent problems.

Take this one, for example. On its Web site it states it's limiting ticket sales to 35,000; selling that many would generate $5.25 million for its backers.

But what if not enough tickets are sold to cover the cost of the $650,000 prize? That's what's happened in other raffles, and the giveaway was canceled. If that occurs in this case, what happens to your $150?

The raffle's Web site doesn't say, although it does state that it can change the rules at any time. It also says the winner is responsible for all taxes, which on a $650,000 windfall could be hefty.

There are other potential pitfalls. In a raffle held by another organization, the raffled home was in foreclosure, a fact withheld from contest entrants. In another, the home was a money pit because of serious environmental contamination, also not divulged.

Whether any such raffle is legal depends on state law. This one wouldn't be in Washington because its high ticket price would run afoul of state gaming laws. But high-priced raffles appear to be legal in California, as long as the church is registered as a charity.

This is where the Internet comes in handy. The California Attorney General's Web site has a database of registered charities. (Washington's Secretary of State's site does, too. Go to: www.secstate.wa.gov/charities) The church sponsoring the raffle isn't on California's, which is red flag No. 1.

The raffle's Web site raises others: addresses for the church and house aren't provided, so their existence can't be easily verified. Bottom line: Buyer beware.

Q: My husband and I own our house free and clear. He has an adult daughter; I have no children. We want to split our property with 50 percent going to his family and 50 percent to my family when one of us dies or we both die. How can we make this work? My husband says if it won't work he'll sell the house and rent an apartment. But I want a house. If I buy one on my own, does my husband have any rights to it?

A: Seattle attorney Lori Rath, of Rath Law & Mediation, said it's fairly common for a spouse to leave a portion of his or her assets to someone else, especially if that spouse has children from a previous relationship.

"Most spouses also want to make sure that their surviving spouse is adequately provided for after death, particularly when it comes to the marital residence," Rath said.

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How to accomplish that depends on the couple's circumstances. For example, having other assets, in addition to the house, may provide more options for taking care of the surviving spouse than if the house is the only asset.

"The most important thing for you and your husband to do is discuss your assets and intentions with an experienced estate-planning attorney who can create an appropriate estate plan for you," Rath said. "If the two of you do not or cannot agree on a plan, then each of you can hire your own attorney."

You can buy a home in your name only, giving your husband no rights to it, but it's complicated. That's because Washington is a community-property state. Unless you carefully structure the purchase and draft paperwork to the contrary, assets acquired during the marriage are owned by both. An attorney can help.

Q: In a prior column you wrote that landlords can require tenants to carry renter's insurance (Feb. 11). Why would a landlord care if a tenant has this insurance?

A: Landlords may care because tenants' individual policies usually cover liability claims made by tenants' guests. That means that if a guest is injured in a fall, for example, the tenant's renters insurance may cover it rather than the landlord's insurance.

Tenants should care because the landlord's insurance covers the building, but not the tenants' belongings. That's why they need their own coverage.

Addendum: Responding to a recent column item about a condominium board member in arrears on dues (March 25), reader Tom Pacher of Whidbey Island passed on the solution his former condo board adopted.

"We instituted a change in the governing documents that provided that no person could run for a position on the board if they were more than a specified period of time behind on their dues," Pacher said.

It's been several years since he lived there, so he can't recall the specifics, but the change may have also covered previously elected board members, too.

"My concern, shared by others, was that if we got enough board members who were behind on dues, they would not pursue delinquencies and ultimately leave the entire association unable to pay for garbage, sewer and other common bills," he said.

Home Forum answers readers' real-estate questions. Send questions to Home Forum, Seattle Times, P.O. Box 1845, Seattle, WA 98111, or call 206-464-8510 to leave a question on a recorded line. The e-mail address is erhodes@seattletimes.com.

Sorry, no personal replies.

More columns at www.seattletimes.com/columnists.

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