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Archive for January, 2013

Death and Credit Cards 01.24.2013

An important part of settling a family member’s estate is dealing with debt – specifically credit card debt. While the family member’s estate is required to deal with such debt, sometimes a living spouse or family member can take action that could cause the living person to assume unwanted credit card debt from a deceased loved one. Here are a few things to remember when dealing with death and credit cards:

1. Make sure you understand the consequences of being a joint cardholder – whether you are in a spousal relationship or a parent-child relationship. If you co-signed for the credit card as a joint cardholder, you will be liable for the debt associated with the card whether you accrued the debt or not.
2. Understand the consequences of assigning credit card debt during a divorce settlement. If your ex-spouse agrees to assume responsibility for a card you shared during marriage, ensure that your name is completely off the account.
3. Don’t act fraudulently. If someone you love dies, don’t use their credit card after their death, even if you had a Power of Attorney that allowed you to do so during their life.

Finally, not all credit card debt has to be paid upon the death of someone you love. During the probate process, creditors of a deceased person have an obligation to validate debt and make appropriate claims against an estate if given proper notice under state probate law. Consult with an attorney if you have questions about probate law in your state.

Don’t Put Up With It 01.17.2013

If you work with any professional or service provider that doesn’t answer your calls, charges you too much, makes simple issues complicated, performs shoddy work or mistreats you in any way . . . STOP WORKING WITH THEM. There are plenty of exceptional professionals and service providers in your area that will treat you well, do great work and provide you the value you are seeking. Don’t just complain. Make a change. You’ll be thankful you did.

Common Sense Reminder for 2013 01.14.2013

Bloomberg.com contributor, Tony Schwartz, recently published an article, “Take Back Your Life in Ten Steps.” The article isn’t earth-shattering but is a good reminder to keep in mind some simple practices that could reduce your stress and increase your quality of life. Here are ten things to consider:

1. Get sufficient sleep every night: 7 – 7.5 hours per night is better than 6 – 6.5 hours.
2. Move more: raise your heart rate for 30 minutes at least 4x per week.
3. Eat less, more often: focus on lean proteins.
4. Renew more: take a break every 90 minutes or so.
5. Invest in those you love: be fully present with someone for an hour a day.
6. Give thanks: once a week, hand write a note of thanks.
7. Do the most important thing first: take care of the most challening task while you have the most energy.
8. Practice reflection: set aside 15 minutes a day to reflect on what you’ve learned.
9. Keep learning: read!
10. Give back: dedicate some time every week to devote yourself to a cause other than yourself.

Resolutions are HARD to keep! 01.10.2013

Here’s a quote from an excellent book, “Strategy and the Fat Smoker.”

“We often (or even usually) know what we should be doing in both personal and professional life. We also know why we should be doing it and (often) how to do it. Figuring all that out is not too difficult. What is very hard is actually doing what you know to be good for you in the long-run, in spite of short-run temptation.”

Don’t let this be another year in which your resolutions/goals fall by the wayside! Invest your energy in doing what’s good for you. Maybe Nike says it best . . . Just Do It. If you can’t do it on your own, find someone who will keep you accountable to get it done. Make this year different. Make it better.

No more fiscal cliff . . . 01.07.2013

We can finally stop talking about the fiscal cliff. Congress has taken action to, for the most part, make permanent the tax system that has been in effect since the end of 2010 – a tax system that actually has its roots in the Bush tax cuts of the early 2000s. Here are a couple pieces of information regarding the new system:

Estate Tax
The new system makes the 2012 $5.12 million exemption permanent. This means that each U.S. citizen can “give” away up to this amount tax-free during life or at death (we call this “the basic exclusion amount”). The exclusion amount is adjusted for inflation, and will likely be in the $5.25 million range for 2013. Note that there is still an unlimited exemption for transfers between spouses.

Additionally, the new system permanently allows any widow or widower the ability to use any unused portion of their deceased spouse’s basic exclusion amount (we call this “portability”) so that a couple can give away over $10 million without any tax hit.

Annual Gifting
Under the new rules, each U.S. citizen can give another person $14,000 per year without it counting against the basic exclusion amount. Spouses can effectively double this annual exclusion by each making a gift of $14,000 per year.

Those of you who were worried that we were going to fall back to a $1 million exclusion amount, rest easy. We now have some stability in our tax code and can plan accordingly.