Thursday, March 27, 2008

Is your Life Insurance Rated due to Travel?

Category: Financial Planning

Life insurance companies are allowed to "rate" policies, i.e.: charge higher premiums, based on factors such as health or lifestyle. Up until yesterday, in New Jersey, one of those lifestyle factors was travel. However, Governor Corzine just signed legislation prohibited insures to rate policies based on travel.

From Scott Goldstein at NJBiz - Corzine Signs Bill Ending Life Insurance Denial Based on Travel

Life insurance companies can no longer charge higher premiums to people based on past and future travel plans to places like Israel and Indonesia, according to a bill (A-1586) signed into law yesterday by Gov. Jon Corzine.

The new law, which takes effect immediately, prohibits companies from determining premiums or denying insurance "based on an individual's intent to travel abroad, unless the decision is based on sound actuarial principles."

What does this mean to you? If your present policy was rated for travel (which applies to many New Jersey executives of global companies) you may want to look at replacing the policy as you may get a lower premium.


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Wednesday, March 26, 2008

Estate Tax in the Spotlight Again

Category: Estate and Inheritance Tax

Congress is again considering a permanent modification to the federal estate tax.

At present, US residents have a $2 million exemption from federal estate tax. That exemption is scheduled to increase to $3.5 million in 2009. There is NO federal estate tax in 2010, and the federal estate tax in re-instituted in 2001 with a $1 million exemption. (Doesn't congress just make the clearest laws).

The Senate recently voted 99-1 in favor or a proposal to fix the exemption permanently at the 2009 levels. This would be good as it would impose some certainty on planning, and remove the incentive for wealthy heirs to have the parents not survive past 2010 (the dark side to a 1 year repeal). Of course, this is merely a resolution, not a law, but it is interesting that it comes to the forefront again in an election year in the midst of a recession.


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Wednesday, March 19, 2008

Enticing the "elderly" to turn in their driver's licenses?

Category: Elder Law, Miscellaneous Musings

We all complain about other drivers, particularly here in New Jersey where we probably have the most awful traffic, road conditions and convoluted traffic patterns (we can't just turn left - we have a lovely invention called jug-handles instead) in the country.

Elderly drivers tend to get much of the ire - for right or for wrong. In Japan, they are trying to entice "elderly" drivers to turn in their licences ("elderly" is in quotes as they define it as 65 - odd for the country with the one of the longest life expectancies). Yahoo News reports:

Tokyo businesses are to start offering benefits to elderly people who give up their drivers' licences, backing a police effort to cut back on the ballooning number of traffic accidents caused by drivers over 65.

Among more than 30 special offers, one small bank will give higher interest rates, while Mitsukoshi department store chain plans to provide free delivery from its Tokyo stores and a hotel will offer a 10 percent discount on meals in a program starting next month, Tokyo police said on their Web site.

"Have the courage to give up your licence," the police say on the site. "If you have lost confidence in your driving ... if your family says they are worried about you driving ... please think about handing in your licence."

What about some sort of accelerated re-licensing system instead after a certain age? And where does 65 come from (John McCain is 72 after all, and he claims to be spry enough).

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Thursday, March 13, 2008

Seniors - File a Tax Return with "Stimulus Payment" at the Top to get your Rebate

Category: Tax Law and Planning tells Seniors about the Tax Rebate: "Get this straight: If you can pick up an easy $300 or more by summer, it's worth the trouble."

As the Article illuminates, the problem with the tax rebate ($300 for singles, and $600 for couples) is that to get the tax rebate you need to file a return. Many seniors haven't filed a return in years and have no idea how to go about it. Well, here's the answer:

From "Rebates could return some seniors back to filing taxes - Simplified steps in place to allow taxpayers on limited income to qualify for check"

If you normally file a tax return, file the return as usual. Otherwise, follow these steps.

• First, get a 1040A or 1040 form from a post office, local library, or by calling the IRS at (800) 829-3676. If you're filling out a form by hand, get the 1040A. If you're using software, it might be easier to use a 1040.

• If you normally do not have to file a tax return, write "stimulus payment" on the top of the form.

• Fill out your name, address and Social Security numbers for you and your spouse at the top of the form.

• Fill out the tax filing status.

• Fill out exemptions for yourself, spouse and dependents. Be sure to list all qualifying children on line 6c to get any possible rebate money for them.

• Go to Line 14a of Form 1040A or Line 20a of Form 1040. Here's where you list Social Security benefits. See Form 1099-SSA, which the Social Security Administration sent out earlier this year to report 2007 benefits.

If you do not have a Form 1099-SSA, you may estimate your annual Social Security benefits. Take your monthly benefit and multiply it by the number of months that you received it in 2007.

If you normally do not have to file a return and do not owe taxes, you're going to fill out the entire amount of Social Security benefits, plus other benefits like some veterans' and Railroad Retirement benefits.

Supplemental Security Income, or SSI, cannot be used to count as qualifying income in order to get this economic stimulus rebate.
• If this applies to you, see Form 1099-RRB for Railroad Retirement benefits to report those benefits on Line 14a of Form 1040A or Line 20a of Form 1040.
• Or, if this applies to you, you're going to need the sum of veterans' disability compensation, pension or survivors' benefits received from the Department of Veterans Affairs in 2007. You can estimate the annual benefit by taking the monthly amount you receive and multiplying it by the number of months in 2007 that you received the benefits.

• Sign the return, date it, fill in your occupation and give a daytime phone number. If you're filing a joint return, your spouse must sign the return as well.

• Keep a copy of the return.

• Mail the return to Department of the Treasury, Internal Revenue Service Center,
at the address for your state.

Find that at the IRS Web site, click on Individuals in the tabs across the top of the page, then click on Where to File under IRS Resources in the left rail. Then click on the link that says "Individual Taxpayers -- Where to File Your Own Individual Return" and a map of the states will pop up. Click on your state.

Use the address for your type of form and the one where you won't be sending in any money.

• Know that the first rebate checks won't go out until May.


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Monday, March 10, 2008

Ledger's will leaves nothing to daughter - Parental Responsibility to Prepare a Will?

Category: Estate Planning

While Heath Ledger's death may have been an accident, his failure to provide for his minor child is an example parental hubris I see all too often in parents of young children.

Yahoo News reports that Ledger's will leaves nothing to daughter : "Heath Ledger's will leaves nothing to his former girlfriend and their 2-year-old daughter because it was never updated after they became part of his life."

Parents of young children don't intend to die, but part of being a parent is being responsible for life of another person who cannot take care of themselves. Yes, you are young. Yes, you are healthy. Yes, life is good. However, as Mr. Ledger's unfortunate example shows, you can have it all, and bad things can happen to you too.

What I find particularly concerning is that Mr. Ledger was undoubtedly surrounded by scores of financial advisers - accountants, money mangers, attorneys. While I have probably heard all the reasons why a person can't make out a Will to protect their kids ("I don't have time", "I don't have enough money for it to matter", "I can't pick a guardian") all of these seem rather weak in retrospect. I assume if Mr. Ledger could have predicted his untimely death, he would have made sure his daughter was taken care of. While his family has said they will step up to the plate, shouldn't a parent do more then leave their child's future to the best intentions of others? Shouldn't a parent take the time to map that future out - just in case?


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