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Hess Law Group News

Preparing Your Estate

Wednesday, January 20th, 2016

Yesterday I had a meeting with an elderly client and her children.  While discussing the mother’s estate plan, we transitioned into a discussion about making sure to let the children know if she has any secret hiding spots or safe deposit boxes which the children may not realize exist.  The mother laughed and said she had a few spots and retold a story of her late husband hiding the key to the gun collection in the mouth of one of his trophy mounts.

The kids were surprised to learn this and thanked me for asking the question otherwise they may not have figured it out.  I advised it was something I commonly did and said those are the issues of the older generation, the issue for this generation are “What’s the password!?!?”.  Lo and behold I went home that evening and this article was fed to me by news app:

Widow Wins Battle with Apple Over Deceased Husband’s Password

Now, it certainly wasn’t a life and death situation, or even trying to get into a bank account to pay bills, but you can see companies may make it very difficult to get access to accounts and from their side of things, can you blame them?  With the increase in cyber-crime and more people using digital accounts, companies must be more vigilant than ever to protect their clients’/customers’ information.

So make sure you have that discussion with your spouse, mom, dad or whomever about these accounts; perhaps advise them to keep a list of passwords (not next to the computer!) in a fire proof safe, just make sure you know if the key is in the mouth of the bear mounted on the wall!

 

Owe Taxes? You May Lose Your Passport

Thursday, January 7th, 2016

Little did most people know, but when passing the “Fixing America’s Surface Transportation Act” also known as the “FAST Act” lawmakers hitched a tasty treat for the IRS.   Hidden in the thirteen hundred pages, is Section 32101 – Revocation or denial of passport in case of certain unpaid taxes which adds language to IRC Section 7345, specifically subsection (e) to give the IRS the power, upon providing a certification to the Secretary of State, to demand the Secretary of State not issue a passport to any individual who has a “seriously delinquent tax debt”.

A seriously delinquent tax debt is anything $50,000 or more.  Now you might be thinking well, $50,000 is a lot to owe in Federal Taxes, but this provision includes aggregating not only the tax obligation but also any penalties and interest owed on such obligation.  This is an extremely important point, specifically for those United States citizens who work overseas, because if a US citizen fails to disclose foreign bank accounts aggregating in excess of $10,000, the citizen can be hit with penalties as high as the $100,000 for each foreign account intentionally not disclosed and even a penalty of $10,000 per violation for unintentional failures to disclose.

Thus, even if you did not know you were supposed to disclose your foreign bank accounts to the IRS, and even if you did not know know you were supposed to file a US tax return, and even if you made all your money outside of the United States (and after reading this you now know!) you can still be hit with significant penalties, and those penalties will quickly add up to the point where you could lose your passport.

So for those of you who work overseas, are paid overseas and have neglected to pay taxes, be aware.

Know Before You Owe

Friday, October 2nd, 2015

So do you know about the Know Before You Owe program?  If you plan to buy a home after October 3, 2015 you’re going to learn.  The program is an attempt to help the consumer by simplifying the forms, and the information contained therein, provided to the mortgage consuming public.  The Consumer Financial Protection Bureau has done away with the HUD-1 and the Final Truth-In-Lending Forms and replaced them with the “Loan Estimate” and the “Closing Disclosure” forms.  Much of the information remains the same, but the presentation and organization is more user friendly and provides more detailed information.

Perhaps the biggest change, and perhaps the biggest obstacle (keep reading), is the timing requirement of the Closing Disclosure.  For those who have purchased a home with a mortgage you’ve undoubtedly been in the situation where the first time you see the “Final” versions of these documents is at best the night before closing and many times it’s actually at closing, though you’re entitled to the information twenty-four (24) hours prior if you request it.  The new rules require the Closing Disclosure to be provided at least three (3) business days before you finalize the loan, giving you time to review how the final numbers compare with the estimates and giving you the opportunity to ask questions. Here’s the issue…

Guess what happens if you notice a material error in the documents?  Well a new three-day review is possible, thereby pushing your scheduled closing date back, resulting in a possible domino like effect of requiring you to reschedule your movers, your time off from work, the utilities transfer and oh-my-gosh (if you have kids) the cable installation.  The concerns about what were considered material changes, which were not clearly defined, caused realtors and mortgage brokers to push back a bit.  Now, the Consumer Financial Protection Bureau has since come out to state there are only three changes which would require a new three day review: an increase in the APR, the inclusion of a prepayment penalty or a change in the loan product (fixed rate to adjustable rate).

Certainly, more time to review such important documentation is not a bad thing, but beware if there are material changes call Comcast immediately to make sure they are available for your new move date, otherwise deal with the wrath of your children!

Now you know a little bit about Know Before You Owe and knowing is half the battle.

Estate Planning is Complicated

Friday, September 25th, 2015

While it remains to be seen whether the the Big Four (formerly Big Five, as a proud Arthur Andersen alum) Professional Services firm is truly at fault, the fact there is even a question as to whether multi-national organization with over two hundred thousand (200,000) employees is to blame for William Davidson’s enormous estate tax bill goes to show that tax and estate planning is quite a difficult endeavor.  Certainly, less than one percent (1%) of estates are likely as complicated or valuable as Mr. Davidson’s, but Mr. Davidson had teams of lawyers and tax professionals assigned to his plan to make sure of the best possible result for his estate and family; and according to this recent lawsuit, the high powered team made a Five Hundred Million ($500,000,000.00) Dollar mistake.

Whether you have an estate which may incur taxes, or an estate which may be complicated due to blended families or small businesses, an estate plan is necessary so your family does not wind up owing taxes, frustrated with the estate distribution or forced to sell a family business.

 

Do you have an estate plan? Do your parents?

Tuesday, April 7th, 2015

An estate plan isn’t sexy. It doesn’t make you money and you likely won’t see the effects of it saving you money (the beneficiaries certainly will though) and so people put it off; there’s no return on the investment so you figure your money is better spent elsewhere. You’re not alone in your thinking, but a properly crafted estate plan provides a bit of a sanity for your children or beneficiaries in a difficult and confusing time. The estate plan isn’t really for you, it’s for the next generation, so while you’re thinking about your estate plan, perhaps it’s time to ask your parents about theirs as well.

Take a read through the articles below and, if you have more questions than answers, contact the Hess Law Group and we can answer those questions.

Big Retirement Mistake: Boomers with no estate plan

The Uncomfortable Questions Baby Boomers Need to Ask Their Aging Parents