This is an excellent article from Yahoo! Finance and MarketWatch tying together changes in the law, court rulings & private letter rulings (PLRs). Probably the biggest change is the one-year (2009) waiver of the required minimum distribution (RMD) enabled by the Worker, Retiree, & Employer Recovery Act of 2008 passed in response to the economic slowdown.
Long-Term Care & Durable Powers of Attorney
The following scenario came up recently with a Long-Term Care insurer:
The insured was in a position to need the benefits from her policy due to the onset of Alzheimer's but the insurer would not accept a claim filed by her husband and the insured, of course, was in no position to file the claim herself. What a Catch-22! No way to claim the benefits she had paid for for many years.
Fortunately, the insured had executed a Durable General Power of Attorney naming her husband and children attorneys-in-fact before the onset of her illness. The general power of attorney (POA) allowed her husband to file the claim in her place and because it was a durable POA, it continued to be valid even after she became incapacitated.
It should be noted that the insurer specifically denied a Health Care POA as granting sufficient authority to file the claim.
A durable general power of attorney, like all advance directive documents, should be drawn up by an attorney - specifically one experienced in estate planning. Planning ahead can save lots of hassle up the road.
The insured was in a position to need the benefits from her policy due to the onset of Alzheimer's but the insurer would not accept a claim filed by her husband and the insured, of course, was in no position to file the claim herself. What a Catch-22! No way to claim the benefits she had paid for for many years.
Fortunately, the insured had executed a Durable General Power of Attorney naming her husband and children attorneys-in-fact before the onset of her illness. The general power of attorney (POA) allowed her husband to file the claim in her place and because it was a durable POA, it continued to be valid even after she became incapacitated.
It should be noted that the insurer specifically denied a Health Care POA as granting sufficient authority to file the claim.
A durable general power of attorney, like all advance directive documents, should be drawn up by an attorney - specifically one experienced in estate planning. Planning ahead can save lots of hassle up the road.
Mortgages Catch Up
After months of watching Treasury rates fall and wondering when the impact would finally reach borrowers, mortgage rates moved swiftly beginning in late December and are now at levels where homeowners should investigate refinancing. According to bankrate.com, 30-year fixed rates are averaging 5.1%, while 15-year fixed are at 4.76%.
Good credit scores are a must, and be sure to negotiate low, fixed closing costs.
Good credit scores are a must, and be sure to negotiate low, fixed closing costs.
Roth Conversions
I've been getting few questions lately on the prudence of converting IRAs to Roth IRAs, driven in part by the lower balances (and corresponding tax liabilities) of clients' IRA accounts.
Though some people are currently limited because their Modified Adjusted Gross Income exceeds $100,000, this limitation is going away in 2010. Also, conversions made in 2010 have the added advantage of having the tax liability spread over 2010, 2011, & 2012.
If you are able to convert in 2008, there are a number of points to consider (see the link above) and one crucial date - December 31. You can undo the conversion without penalty before you file your taxes, but if you wait until 2009, you've lost the ability to convert in 2008.
Additional Links: http://www.fairmark.com/rothira/index.htm
Though some people are currently limited because their Modified Adjusted Gross Income exceeds $100,000, this limitation is going away in 2010. Also, conversions made in 2010 have the added advantage of having the tax liability spread over 2010, 2011, & 2012.
If you are able to convert in 2008, there are a number of points to consider (see the link above) and one crucial date - December 31. You can undo the conversion without penalty before you file your taxes, but if you wait until 2009, you've lost the ability to convert in 2008.
Additional Links: http://www.fairmark.com/rothira/index.htm
Save $1,000 This Month
Keeping with the new 'cheap is cool' paradigm we now find ourselves in, I direct you to Ramit Sethi's blog "I Will Teach You to be Rich" and his "Save $1,000 in 30 Days" challenge.
The blog is evolving with a new tip posted each day and he has promised to focus on reasonable, do-able changes.
So far its been a mixed bag with some topics like "Optimize Your Cellphone Bill" (I don't have a cellphone so how about zero - is zero optimal enough for you? Blame it on (or thank) my depression-era parents - we still had a party line in the 70s.)
On the other hand, he's finally gotten me to pack my own lunches - something I needed to do for health as well as economy.
There's no need to sign up if you don't want too - you can get to the tips for free. Check it out and maybe learn something.
The blog is evolving with a new tip posted each day and he has promised to focus on reasonable, do-able changes.
So far its been a mixed bag with some topics like "Optimize Your Cellphone Bill" (I don't have a cellphone so how about zero - is zero optimal enough for you? Blame it on (or thank) my depression-era parents - we still had a party line in the 70s.)
On the other hand, he's finally gotten me to pack my own lunches - something I needed to do for health as well as economy.
There's no need to sign up if you don't want too - you can get to the tips for free. Check it out and maybe learn something.