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
More and more commercial buildings are being designed to meet environmentally friendly, or “green,” standards. In addition, a growing number of communities around the country are adopting “green ordinances” that mandate certain environmental standards for large commercial buildings or developments. As a result, commercial leases in these buildings need to take green issues into account. And since this is a new area, how these issues should be handled isn’t always clear, and can lead to considerable
Real estate prices have been falling all over the country. While no one likes to think that their home is worth less than it used to be, the downturn has created an opportunity to give your home to your eventual heirs while saving a large amount of estate and gift taxes. This can be done with a “Qualified Personal Residence Trust”, or QPRT. The idea is that you put your home into a trust for a
New rules from Fannie Mae are making it harder to get a mortgage for a condominium unit. Effective this past March 1, the mortgage giant will no longer purchase mortgages for condo units in new buildings unless at least 70% of the units are sold or under contract. Previously, Fannie would purchase mortgages as long as at least 51% of the units had been sold. As a result of the change, a number of people who
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