01.05.10
Posted in Tax at 9:57 pm by Eric
Does your favorite charity offer scrip cards? With a scrip card, the charity buys scrip from retailers at a discount, then sells the scrip to supporters at full value. The difference between the amount paid by the supporter and the amount paid by the charity is the charity’s “profit.” The difference is also tax-deductible to the supporter, if the supporter has the option of receiving the discount margin in cash. (Added bonus: If the supporter keeps the discount margin, it’s not taxable.)
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12.23.09
Posted in Employment Law at 2:41 pm by Eric
The COBRA subsidy has been extended. Washington earlier passed a 65% COBRA subsidy, which was set to expire on December 31st. The entitlement has just been extended to February 28, 2010. The entitlement allows eligible individuals to receive a 65% subsidy of their COBRA health insurance premiums. The new law also extends the subsidy period from nine months to fifteen months.
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12.22.09
Posted in Uncategorized at 1:34 pm by Eric
An email from our exalted local probate judge. Summary: Get your paws off that will . . . until the guy dies.
There have been extensive discussions among the Probate Registers as to whom may a Register disclose the existence and contents of a will filed for safekeeping with the Probate Court. Since there was a split of opinion among the Registers on how this question should be resolved, the Probate Judges decided to resolve the issue. Judge Murkowski of Kent County reviewed the matter.
His summary basically states that when a will is filed for safekeeping under Section 2515 of EPIC, the filing is NON PUBLIC. The Court receives the will in sealed form and can return the sealed will to the testator or designee during the lifetime of the testator. The will is never unsealed until the death of the testator. A court may not reveal to ANYONE whether a will is filed for safekeeping with the court, and because the will is sealed cannot reveal the contents of that will. The proper response to an inquiry whether a will is filed with the Court is “no public record exists.” A conservator cannot view a will filed for safekeeping. A conservator may examine a protected person’s will from a source other than a will deposited with the Probate Court. When a designee presents to the court the notarized authorization to retrieve the sealed will from safekeeping, the designee should produce picture ID that is photocopied, attached to the authorization form and retained by the court.
Once a testator has died and the Probate Court has proof of the death, the will can be unsealed and photocopies given to anyone for a fee.
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12.05.09
Posted in Tax at 3:49 pm by Eric
According to the PBS News Hour last night, the House has passed the bill freezing the estate and gift tax at 2009 levels, which means a continued $3.5 million exemption. Whether the Senate acts, who knows. They’re bogged down with health care right now.
If nothing gets passed, there is no estate tax next year then the exemption drops to $1 million in 2011.
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11.21.09
Posted in Uncategorized at 1:45 pm by Eric
I’ve often wondered: With seven minor children, what’s the maximum amount my family would receive from Social Security if I died? The bad news is, I don’t get any credit for children four through seven. Benefits max out at three children. The good news is, based on my Average Indexed Monthly Earnings, my family would receive $4,424 per month. This would continue for about ten years (total pay-out: over $500,000), at which point my fifth child would reach age 19 and the monthly payment would start to decrease. When my youngest child reaches age 19 (fifteen years from now), it would end.
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11.12.09
Posted in Uncategorized at 1:07 am by Eric
Answer to a question we field occasionally: An IRS tax lien is good for ten years from the date of the IRS assessment. If you signed a waiver, the lien might be good for even longer.
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11.11.09
Posted in Uncategorized at 1:51 pm by Eric
If you’re a creditor of a corporation and you’re not getting paid, don’t forget that many corporations have included a compromise provision in their articles of incorporation. The following provision has been a part of the State of Michigan pre-printed form for decades, and although it’s perfectly permissible for corporations to cross it off before filing the form, the vast majority of corporations leave it in, and therefore the provision is binding on the corporation and people dealing with the corporation:
When a compromise or arrangement or a plan of reorganization of this corporation is proposed between this corporation and its creditors or any class of them or between this corporation and its shareholders or any class of them, a court of equity jurisdiction within the state, on application of this corporation or of a creditor or shareholder thereof, or on application of a receiver appointed for the corporation, may order a meeting of the creditors or class of creditors or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or reorganization, to be summoned in such manner as the court directs. If a majority in number representing 3/4 in value of the creditors or class of creditors, or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or a reorganization, agree to a compromise or arrangement or a reorganization of this corporation as a consequence of the compromise or arrangement, the compromise or arrangement and the reorganization, if sanctioned by the court to which the application has been made, shall be binding on all the creditors or class of creditors, or on all the shareholders or class of shareholders, and also on this corporation.
It might offer you an avenue that’s not often considered.
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11.02.09
Posted in Uncategorized at 12:12 pm by Eric
Health Savings Accounts are neat vehicles. If you’re covered by a high-deductible health insurance plan, you can deposit money into a health savings account and receive a tax deduction for the contribution. If you later take a distribution from the HSA to reimburse or pay medical expenses (dental, optical, prescriptions, whatever), you don’t have to recognize the distribution as income. If you have family coverage, you can deposit $5,950 annually into the HSA. Because many families don’t burn through that much in medical expenses, the unused portion accumulates and earns income.
And that’s where the money-making opportunity comes in. Someone manages those funds. Places like UnitedHealth Group earn money doing it, but the previous arrangements weren’t profitable enough for them, so they took advantage of regulatory changes last January and tripled the annual fees . . . to the detriment of their customers:
UnitedHealth Group controls roughly 15% of the market for HSAs, which it offers through OptumHealth Bank, a wholly owned subsidiary. Until late last year its HSA clients had 11 mutual fund choices from Vanguard Group. Annual fees ranged from 18 cents to 35 cents per $100 invested.
By late 2008 Optum had yanked the Vanguard options for new customers. Funds on the menu now hail from firms like Munder and Thornburg; fees range from 76 cents to $1.37 per $100.
Why the switch? No coincidence, perhaps, that regulatory changes this January enabled entities like OptumHealth and their consultants to start pocketing a cut of fund management fees. Nor, perhaps, is it purely random that many fund firms popping up in HSAs these days kick back fees to plan managers. Vanguard does not pay kickbacks.
Link.
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10.30.09
Posted in Uncategorized at 3:50 pm by Eric
Have you ever heard of “ToD” or its brother, “PoD”? They mean “Transfer on Death” and “Payable on Death.” They’re basically beneficiary designations that you can attach to all sorts of investment properties. You, for instance, can set up your savings account the following way: “Your Name, PoD Your Daughter.” Upon your death, your daughter would receive the savings account, as though she were a joint owner (read: without probate), but while you’re alive, she has no rights over it (which has many benefits: prevents fraud, precludes estranged spouses from trying to claim it in a divorce, no bankruptcy problems if the daughter files Chapter 7, etc.).
The procedure has one major drawback: It doesn’t apply to real estate. Therefore, the only way to avoid probate with real estate is to put your offspring on the real estate title as a joint owner (which has many risks) or put the real estate into a trust.
But that’s changing. Effective July 1, 2009, Indiana enacted legislation that allows people to transfer real estate into a ToD designation, as long as you follow the statutory requirements. If you do so, your heir will receive the real estate without the need for probate.
This a huge development for Indiana estate planning. Michigan is supposedly considering similar legislation. We’ll keep you posted.
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10.26.09
Posted in Uncategorized at 2:08 pm by Eric
Happy one-year anniversary to this blawg. We’re averaging two posts a week, which is double the initial goal (update at least once a week). We hope everyone is enjoying it.
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