Probate subtly reduces the value of many estates. It can take more than a year in some cases, and attorney’s fees, appraiser’s fees and court costs may eat up as much as 5% of a decedent’s accumulated assets. Think tens of thousands of dollars, perhaps more.1 What do those fees pay for? In many cases, routine clerical work. Few estates require more than that. Heirs of small, five-figure estates may be allowed to claim property through affidavit, but this convenience isn’t extended for larger estates. So how you can exempt more of your assets from probate and its costs? Here …
The Merits Of A Fee-Only Advisor
31 NFL players just lost $40 million in a shady casino investment that was recommended by their “financial advisor”. 1 For some of the players, the amount lost was a majority of their networth. Of course, their financial advisor wasn’t advising them in a fiduciary capacity. He was only selling them an “investment” that generated the highest commissions for him – in this case, an tiny ownership stake and $500,000. This is why it’s important to know how your advisor gets compensated and whether he’s really your advisor, or just a financial-product salesman. You should always ask if he has …
Don’t Forget To Fund Your IRA By April 15th
Here’s an important reminder: April 15 is the deadline for funding your IRA for 2012. (If you have a SEP IRA, you have until October 15 if you filed an extension on your personal tax return.) You may contribute up to $5,000 to a traditional IRA or a Roth IRA for the 2012 tax year. If you were 50 or older in 2012, your contribution limit is $6,000. (If you own multiple IRAs, your total IRA contributions for 2012 cannot exceed $5,000/$6,000.) Please note that income phase-outs may limit Roth IRA contributions. Single filers and heads of household can make …
Bad Money Habits To Break In 2013
Behaviors worth changing for the New Year. Do bad money habits constrain your financial progress? Many people fall into the same financial behavior patterns year after year. If you sometimes succumb to these financial tendencies, the New Year is as good an occasion as any to alter your behavior. #1: Lending money to family & friends. You may know someone who has lent a few thousand to a sister or brother, a few hundred to an old buddy, and so on. Generosity is a virtue, but personal loans can easily transform into personal financial losses for the lender. If you …
Common Deductions Taxpayers Overlook
i>Make sure you give them a look as you prepare your 1040 Every year, taxpayers leave money on the table. They don’t mean to, but as a result of oversight, they miss some great chances for federal income tax deductions. While the IRS has occasionally fixed taxpayer mistakes in the past for taxpayer benefit (as was the case when some filers ignored the Making Work Pay Credit), you can’t count on such benevolence. As a reminder, here are some potential tax breaks that often go unnoticed – and this is by no means the whole list. Expenses related to a …
If Interest Rates Rise, What Happens To Bonds?
Investors in longer-term Treasuries could see some rocky road ahead. How long can it last? The Federal Reserve has said that it will do what it can to keep interest rates low, but these efforts cannot stem the tide forever; it’s inevitable, at some point, that interest rates will rise and diminish bond prices. The only question is: when and how much? 1 A fifth year of easing has left some of the decision makers at the Fed thinking it’s time to reverse gears; the minutes of a December meeting cited “several” policymakers wanting to raise interest rates sooner rather …
Why It Is Wise To Diversify
A varied portfolio is a hallmark of a savvy investor. You may be amused by the efforts of some of your friends and neighbors as they try to “chase the return” in the stock market. We all seem to know a day trader or two: someone constantly hunting for the next hot stock, endlessly refreshing browser windows for breaking news and tips from assorted gurus. Is that the path to making money in stocks? Some people have made money that way, but others do not. Many people eventually tire of the stress involved, and come to regret the emotional decisions …
IRA Contribution Limits Rise For 2013
Save a little more for retirement. Time to boost your IRA balance. In 2013, you can contribute up to $5,500 to your Roth or traditional IRA. If you will be 50 or older by the end of 2013, your contribution limit is actually $6,500 this year thanks to the IRS’s “catch-up” provision. The new limits represent a $500 increase from 2012 levels.1 January is an ideal time to max out your annual IRA contribution. If you are in the habit of making a single annual contribution to your IRA rather than monthly or quarterly contributions, try to make the maximum …
The Fiscal Cliff & Your Taxes
What will change (and won’t change) as a result of the new legislation. Several tax hikes, some tax breaks. Now that the fiscal cliff deal assembled in Congress is becoming law, it is time to look at some of the tax law changes that will result. Here are the major details in the bill, which will bring significant tax hikes to some households in an effort to increase federal revenues by $600 billion over the next ten years.1 The Bush-era tax cuts will be preserved for at least 98% of taxpayers. Individuals with incomes of $400,000 or less and households …
Fiscal Cliff Averted
If you’ve been paying any attention to the media over the past few weeks, you’ve heard about the looming Fiscal Cliff that threatened to push the fragile U.S. economy back in to recession. As a New Year’s gift to the U.S. people, Congress decided to pass a bill averting this cliff. It’s commendable that Republicans and Democrats could overcome their petty differences to pass a bill that actually makes sense. My biggest annoyance with all this talk about the 1% paying their “fair” share in taxes, was that Democrats proposed couples with $250,000 in annual income pay higher taxes. In …