Over the past year, there have been a number of instances where a bank has agreed to provide a mortgage, then has changed its mind and reneged on its agreement at the last minute. In the past, such conduct was unheard of. It’s still rare – but the credit crisis has changed a lot about the way banks operate, and this is one result. As a buyer, you might want to protect yourself by spelling out
Here’s a common scenario: Both parties to a real estate deal are ready to close, but for some reason the seller can’t move out by the closing date. Maybe the seller is moving to a new home or place of business, and the new place isn’t quite ready yet. Maybe the closing date is the last day of the month, a notoriously difficult day on which to hire a moving company. One solution is to go
Ordinarily, people over 70½ are required to receive a minimum distribution from their retirement plan each year. But this minimum payout won’t be required in 2009, thanks to a law passed by Congress. However, this law is creating widespread confusion, and if you’re concerned, you might want to ask for advice quickly on how to handle your particular situation.
Many people believe that joint accounts are a good way to avoid probate and transfer money to loved ones, and such accounts are sometimes referred to as “the common person’s estate plan.” But while joint accounts can be useful in certain circumstances, they can have dire consequences if not used properly. Adding a loved one to your bank account can affect your eligibility for Medicaid as well as expose your account to the loved one’s creditors.
Elderly nursing home residents are increasingly living alongside young and middle-age people with mental illness, with sometimes tragic results, according to a 50-state investigation by the Associated Press. It appears that in many cases this potentially dangerous trend is a violation of federal law. According to the AP, nearly 125,000 non-elderly adults with serious mental illness were living in U.S. nursing homes in 2008. This is a 41 percent increase from 2002. Younger mentally ill people
Once upon a time, the key to a safe deposit box was all loved ones needed to unlock the secrets of a life recently ended. Today, many aspects of our lives – both financial and personal – are lived in places accessible only by password. We have e-mail addresses, online brokerages and banks, Facebook and MySpace profiles, and accounts with PayPal, eBay, and more. In addition, many people have formed relationships with people they know only
Nobody likes a recession, but any time when real estate values, stock prices and interest rates are low is a great time to do estate planning. You can transfer assets to your heirs now at a low value and save them a huge estate tax bite later. One way to do this is with a “grantor retained annuity trust” or GRAT. The idea is that you create a trust and fund it with income producing assets,
As the economy worsens, reports of elder financial abuse are on the rise. The elderly are particularly vulnerable to scams and to financial abuse by friends, acquaintances, caregivers and family members in need of money. A recent MetLife study, Broken Trust: Elders, Family and Finances, found that up to one million older Americans may be targeted yearly. Family members and caregivers are the culprits in 55 percent of cases, although financial losses are usually higher with
With interest rates at historic lows, this can be a good time to make loans to your children so they can buy a home, start a business, or invest. Giving your children an outright gift can subject you to the gift tax, but giving your children a loan doesn’t have any effect on estate or gift taxes as long as your children pay you back at an interest rate set by the IRS. Right now, the
After almost a decade of changes in the federal estate tax laws – and many states shifting their tax structure in response to the federal changes – clarity appears to be on the horizon. Congress’s recently passed budget resolution would make the current estate tax rules permanent, taxing only estates over $3.5 million in value with the tax rate set at 45 percent. Although no legislation has yet been voted on, the nonbinding budget resolution sets
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