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Subject: persfin-digest V4 #23
Date: Mon, 14 Apr 1997 20:58:09 -0400 (EDT)
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persfin-digest Monday, April 14 1997 Volume 04 : Number 023
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX BROADCAST SERVICE [Oppenheimer Software <Connect-]
Does A Husband Have a Legal Claim on His Wife's Pension in a Divorce? [Th]
Checking on Mortgage Lender's Interest Charges? [dannydo@pacbell.net]
Re: Setting the Inheritance Record Straight ["L. Chen" <am302@FreeNet.Bu]
Car rental in France? [eric <73354.3477@CompuServe.COM>]
Medicare and Blue Cross Question [eric <73354.3477@CompuServe.COM>]
Re: Bonds, Bond Funds and Inflation ["Lester M. Levy, MD" <llevy@hoflink]
Consider Treasury Inflation Protected Bonds [Rich Carreiro <rlcarr@animat]
Inheritance Is Not A Marital Asset In Case Of Divorce [bshore@ben.edu]
Excess contributions to 403(b) [Jerry Conley <jcrev@nis2.ncn.net>]
Quicken - categorizing reinvested dividends [sprasad@hsmpk12a-61.Eng.Sun.]
Re: "springing" power of attorney ["Mark J. Welch, Esq." <markwelch@ca-pr]
Home based business health insurance? [Tonia Sams <tsams@vapop.ucsd.edu>]
Small Claims Court Help Needed [Jacqueline.D.Richardson@Hitchcock.ORG (Ja]
Subject: Re: Protecting Inheritance? Why? ["Russell J. Foster" <RFoster@s]
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Date: Mon, 14 Apr 1997 20:15:50 -0400 (EDT)
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------------------------------
Date: Mon, 14 Apr 1997 20:19:27 -0400 (EDT)
From: The Editor <ikrakow@shore.net>
Subject: Does A Husband Have a Legal Claim on His Wife's Pension in a Divorce?
My friend's husband is claiming he has a legal right to his wife's
401(K) and pension as part of a divorce. Is this true, or is this
something negotiable? He's looking for a lump sum settlement instead of
contesting for his wife's retirement assets. Is he bluffing?
Ira
------------------------------
Date: Mon, 14 Apr 1997 20:22:49 -0400 (EDT)
From: dannydo@pacbell.net
Subject: Checking on Mortgage Lender's Interest Charges?
Hi all,
Is there someone that check and see if mortgage lender charge you the
right amount of interest based on the contract and ask the lender for
a refund if the lender overcharge? I need to double check my mortgage
interest and if any, I can use the refund...
TIA,
(Editor's Comment - If yours is like most mortgages, it's self amortizing.
You can set up such a loan in Quicken. I compare its calculation with my
lender's. It's always matched so far. You can also set up a payment
schedule using the PMT functions in Excel or 1-2-3. Are errors such as
these a big problem? -IK)
------------------------------
Date: Mon, 14 Apr 1997 20:23:38 -0400 (EDT)
From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
Subject: Re: Setting the Inheritance Record Straight
> The **main question** in my post was how to set something up to protect what I
> do leave behind so my two sons get to keep it and it doesn't get lost in a
> divorce. All the talk on this list about divorce rates had prompted that
> question because it had been on my mind and I thought it would be a good time
> to ask the question. What little I leave I want my sons to have and NOT their
> former wives.
I am not a lawyer or tax professional. But from what I understand,
inheritance is generally not in the pot of assets to be divided in case
of a divorce -- not even in some of the community-property states. The
key is for you children to keep the inheritance in a separate account;
and also not to "taint" that account with their own assets (i.e. put
their pay check into that account, etc.)
Consult any attorney.
Lily Chen
am302@freenet.buffalo.edu
------------------------------
Date: Mon, 14 Apr 1997 20:43:46 -0400 (EDT)
From: eric <73354.3477@CompuServe.COM>
Subject: Car rental in France?
Anyone recommend a decent rental car comp. in France? Are there any hidden
things we should be careful about?
(Editor's Comment - Rent from Hertz or Avis. Take the maximum insurance.
If you're in an accident you don't want to go back to France for the
trial. You have recourse if you rent from Hertz or Avis because they're
easily reachable from this side of the Atlantic. -IK)
------------------------------
Date: Mon, 14 Apr 1997 20:44:35 -0400 (EDT)
From: eric <73354.3477@CompuServe.COM>
Subject: Medicare and Blue Cross Question
I'm getting close to needing to decide about Medicare- partA,B and sup.
Anyone had any experience with Blue Cross HMO? Will appreciate feedback,
good or bad experiences.
------------------------------
Date: Mon, 14 Apr 1997 20:46:28 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: Bonds, Bond Funds and Inflation
(Editor's Comment - You also left out inflation, which *is* a
potentially serious problem. The $50,000 a year loses purchasing power as
inflation continues. -IK)
This is a very important point. Between inflation and taxation of the
inflated increase (as if it were a real profit), there is virtually no
growth in a fixed income security such as a bond at 5 percent interest.
Thus take the $1,000,000 bond producing $50,000 per year. If you believe
inflation is really running at 3.5 percent per year (despite the popular
but spurious attempts to raise taxes quietly by reducing the CPI by
fiat, a discussion for another day) then the $50,000 is offset by
$35,000 in lost purchasing power. If that $50,000 "profit" is taxed at
28 percent federally, and 6 percent by the state, for an aggregate tax
rate of about 31 percent, that takes $15,500 away. An inflation loss of
$35,000 and a tax loss of $15,500 results in the $50,000 profit becoming
a $500 loss in your capital principal. If you needed $50,000 a year to
live on, you would be consuming your capital by $50,500 each year.
Higher risk (as in equities) is equivalent to less risk in terms of
preserving your capital.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Mon, 14 Apr 1997 20:47:36 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Consider Treasury Inflation Protected Bonds
You could buy some of the new Treasury Inflation-Protected Securities
(TIPS). These are bonds that basically provide a guaranteed real (not
nominal) return if held to maturity. The principal value of the bond
is adjusted for CPI every six months, and the constant coupon rate is
applied to the adjusted principal. So the interest payouts will
increase with inflation, as will the value of the principal. Note
that the increase in the principal amount is imputed income and taxes
must be paid on it even though you don't get the extra cash until the
bond matures (kind of like the way a zero is taxed). Currently they
are only offered in 10-year maturities, and the current coupon rate is
around 3.25% or so (but remember, that ends up being a *real* 3.25%,
not a nominal 3.25%).
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 14 Apr 1997 20:49:14 -0400 (EDT)
From: bshore@ben.edu
Subject: Inheritance Is Not A Marital Asset In Case Of Divorce
Jackie Richardson asked how to protect her sons' potential inheritance
from daughters-in-law in case of divorce. I'm currently receiving
benefits from my mother's trust and wondered about protecting the
income in case of divorce (unlikely after 26 years of marriage; but,
strange things do happen). I live in Illinois and have been told by
my lawyer to keep the inherited moneys separate from joint moneys, as
inheritance IS NOT included as a marital asset in case of divorce.
Also, my mother's trust specified that assets were to be distributed
to her children and that spouses were excluded from benefiting.
Currently, my husband and I are working with a financial planner and
an estate lawyer to create trusts, powers of attorney for both
financial and health decisions, living wills, etc. I am surprised how
complicated and costly the process is. However, experiencing how
simple it is to settle and disburse my mother's estate, EVERY PENNY
and EVERY MINUTE is well spent!
------------------------------
Date: Mon, 14 Apr 1997 20:51:18 -0400 (EDT)
From: Jerry Conley <jcrev@nis2.ncn.net>
Subject: Excess contributions to 403(b)
>From: William Jones <bill.and.ginny@worldnet.att.net>
>
>1. CATHY STEINBERG asked about a 403(b): Suppose your employer makes an
>additional contribution to your account so that the total figure exceeds
>$9500. Is this a problem?
>
>Answer: Usually not. Section 415(c)(1) applies, which says that the
>maximum annual addition is the lesser of $30,000 or 25% of the
>participant's compensation. "Annual addition", per 415(c)(2), means
>the sum of the employer's contribution, the employee's contribution,
>and forfeitures. The $9,500 limit is on the employee's contribution.
>However, check with your Personnel Dept to be sure of the limits.
In researching the question of contributions to a 403(b) last year I found
that the answer is far more complicated.
1. If you are also covered by a second salary reduction plan such as a
401(k) or SEP-IRA, the combination of the two cannot exceed $9500.
2. You must also consider the "exclusion allowance." Multiply your current
year compensation (w2 gross) by 20% times the number of years with your
employer and subtract all contributions made by you and your employer to
retirement plans, 403(b), 401(k), and pension plans contributed to in your
behalf. What is left is unused amounts for future use. (Pub 571 has a
formula). Remember that you use the salary after the deferrals are
deducted. If your salary is $50,000 and you contribute $4,000 to a 403(b),
etc., use $46,000.
3. Now you get to the 415 limit. The total you and your employer may
contribute to all of your defined plans may not exceed 25% of your
compensation, or $30,000. You must count your employers contributions and
all plans.
There are many exceptions to the above for catching up, final year of
contribution, etc. There are also special calculations for "any year
limit," church employees, long time employees, etc.
Your supposed to make these calculations annually before paying your taxes
so you can make adjustments and pay for excess contributions.
The best book I've found on the subject is "The Essential Guide to 403(b)s,
TSAs, & TDAs". John T. Hyland, CFA. Bantry Press. If I remember right it
was $11.95, more or less.
Jerry Conley
------------------------------
Date: Mon, 14 Apr 1997 20:52:03 -0400 (EDT)
From: sprasad@hsmpk12a-61.Eng.Sun.COM (Shankar Prasad)
Subject: Quicken - categorizing reinvested dividends
I have a question on Quicken categories.
I have a US Treasury money market fund. The interest/dividend from
this fund is 100 % exempt from state taxes. I am tracking this
fund using a Investment - Money Market account. Every month, I
receive a statement showing how much dividend was reinvested into
the account. When I enter this information to my Invest-Register,
I am using the "ReInvDiv" action. The problem is that I am unable
to categorize the type of Dividend received. It is always being
entered into the _DivInc category (I see this when I do a report).
There is a nice "income" category called "taxable only by Fed" or
something like that. I would like to categorize the dividends in
this category. The account is NOT marked as tax-free, since it
is not really tax-free - it is only state tax-free.
I tried to record an "ReInvInt" action - now it goes to the _IntInc
category - I still do not get to choose the category to which it
goes. However, in the case of Checking/Savings accounts, it is
easy to choose the category for the interest.
I also tried to record a "MiscInc" type of event (there is a breakup
option within the "ReInvDiv" or "ReInvInt" Forms). If I record the
"Income Event" as being a Misc type, I am able to choose the category
correctly. But, this messes up the investment performance reports.
The performance reported with the Misc transaction is incorrect.
Is there any way to correct the category used for "ReInvDiv" ?
Alternatively, should I care about this ? Will TurboTax correctly
interpret and use the "taxable only by Fed" category ?
- --
Regards
Shankar Prasad
sprasad@Eng.Sun.Com
------------------------------
Date: Mon, 14 Apr 1997 20:53:17 -0400 (EDT)
From: "Mark J. Welch, Esq." <markwelch@ca-probate.com>
Subject: Re: "springing" power of attorney
Eric wrote:
> My wife and I are considering setting up a power-of-attorney with my
> son (an atty) to handle financial matters in the event both of us are
> temporarily incapacitated, auto accid. etc. We already have durable
> power-of-attorneys. Any comments?
I generally advise clients who want someone to have a power of attorney
only in the event of incapacity to execute "springing" durable powers
of attorney, which have no effect until a specified event. There are
benefits and drawbacks to this, but it protects against some abuses.
You should really consult with an ESTATE-PLANNING attorney
to prepare and implement a comprehensive estate plan, not just one
document at a time.
See http://www.ca-probate.com/chap17.htm
- -- Mark J. Welch, Attorney at Law, Pleasanton CA
- -- http://www.ca-probate.com 510-462-8483
- -- This email is NOT legal advice, and is NOT confidential.
------------------------------
Date: Mon, 14 Apr 1997 20:53:31 -0400 (EDT)
From: Tonia Sams <tsams@vapop.ucsd.edu>
Subject: Home based business health insurance?
One option is to contact HOAA (website hoaa.com). Home office association -
membership is $35 per year, they offer health insurance, cheap rates for
shipping, etc... worth a look. I am a member, but have not used the health
insurance option, being prior military.
------------------------------
Date: Mon, 14 Apr 1997 20:54:18 -0400 (EDT)
From: Jacqueline.D.Richardson@Hitchcock.ORG (Jacqueline D. Richardson)
Subject: Small Claims Court Help Needed
We hired a contractor to completely redo a flat roof on a house we bought last
August (remove all old shingles and install new materials). In talking to him
he verbally guaranteed that it wouldn't leak and if it did he would repaint the
ceilings (I was in the process of repairing and painting all the ceilings and
was expressing my concern of the roof leaking again and staining all my hard
work).
In November we had a big rain storm and the roof leaked, we called him and he
went and patched the new roof. Later in the winter it leaked again and he went
and patched again. It continued to leak and the upstairs tenant's boyfriend,
who is a contractor, patched it yet again. In the meantime the ceilings are
stained again and the "new" roof is now nothing but a patched up mess. It was
rolled roofing that he used and it is all buckling and won't be long before it
is leaking again. Now we have to have another new roof put on less than a year
later.
We plan to call him (to be fair) and tell him we want our money back because
this isn't what we paid for. We don't expect he will just hand it over so we
will then take him to small claims court. This isn't something we want to do
because it isn't our style, but then again I have to have a new roof put on at
my expense.
Anyway, I have my receipt for the roof and the dates the roof leaked and we
called him to patch it. We also went up on the roof yesterday to take pictures
of it to show in court. Is there anything else we should have or document or
whatever before we file so we are well prepared when we go to court? I have
never been to small claims court (I've just seen Wapner on TV a few times
<grin>) so I don't really know what to expect, but I would rather be over
prepared than under prepared.
Thanks for any advice.
jackie
------------------------------
Date: Mon, 14 Apr 1997 20:55:27 -0400 (EDT)
From: "Russell J. Foster" <RFoster@specgrp.com>
Subject: Subject: Re: Protecting Inheritance? Why?
From: David Meyers <dmeyers@panix.com>
>>>any contestants of the will are to be disinherited.
>>Isn't this circular logic - if they are contesting the will,
>>wouldn't that very clause be part of what they are contesting?
>
How would they know that particular clause was in the will?
Russell J Foster, MCSE
The Spectrum Group
Oak Brook, IL
rfoster@specgrp.com or rjf@mcs.net
------------------------------
End of persfin-digest V4 #23
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