Credit card companies make it harder to get a mortgage

Some people are finding it harder to get a mortgage these days … because of their credit card company. Why? Because credit card companies have reacted to the recent economic downturn by reducing many cardholders’ credit limits and cancelling inactive cards. The companies’ goal is to reduce the risk of non-payment.

The problem is that whether you can get a mortgage – or how good the terms of that mortgage are – depends to a great extent on your credit score. And a major factor in your credit score is the ratio of how much you’ve borrowed to your available credit. When a credit card company cancels a card or slashes your credit limit, it increases this ratio, which can in turn lower your credit score.

Banks have been getting stingier for a while. Even in the second quarter of 2008, almost two-thirds of U.S. banks said they tightened their standards for credit card loans. And the situation appears to have gotten worse since.

Here are some “alarm bells” that can cause a bank to lower your credit limit:

  • Living in an area with worsening unemployment or plummeting home values.
  • Suddenly charging necessities to a credit card, such as groceries, utility bills or insurance premiums.
  • Running up high balances, taking cash advances, sending smaller payments, or not paying the bill in full when you have a history of doing so.

Of course, you can’t do much about the place you live in. But if you’re concerned about your credit score, it’s a good idea to avoid the other “alarm bells” above.

It’s also a good idea to make an occasional small charge to your inactive cards, just to keep them active. And if your company does reduce your credit limit, call and ask why, and see if you can talk them out of it.

Note: If you have a “rewards” card and you regularly charge groceries and other necessities in order to get a card benefit, you don’t need to stop. What the companies are concerned about is a sudden change in your typical habits.

You might be paying too much in property taxes

Many people are paying too much in property taxes, and may be eligible for a reduction or a refund. Property taxes are calculated by taking the assessed value of your home and multiplying it by the local property tax rate. But since home prices in so many areas have decreased recently, it’s possible that the assessed value of your home is now larger than its actual value – in which case you might be entitled to a tax break. So it’s worth looking carefully at your bill to see what your assessed value is, and whether it still makes sense. In some areas that are suffering from a sharp housing price decline, tax authorities are proactively reviewing valuations. Los Angeles County recently reduced its assessments of 128,000 homes, with an average tax savings of $750.

In addition to the fact that home prices have dropped in most parts of the country, there can also be mistakes in an assessment. Often, an assessor doesn’t actually inspect the property; he or she just looks at it from outside or works from a written description. There have been cases where the assessment was based on an incorrect square footage or number of bedrooms, and cases where a half-bathroom was assumed to be a full one and a screened porch was treated as a year-round living space. If your assessment is several years old, it might not take into account changes in the neighborhood or surrounding development that have affected your property and reduced its value.

How can you prove your case? One way is to hire an appraiser. Another is to find a number of comparable houses in your area and look up their assessed value, to see if your assessment is out of line. In some areas, you can discuss the issue directly with an assessor, but in other areas this isn’t allowed. In either case, you might end up have to file an appeal of your assessment. Nationwide, assessment appeals are successful and reduce property owners’ taxes between 30 and 50 percent of the time, according to the National Taxpayers Union. If you think your assessment is too high, it’s best to act quickly; there are often strict deadlines for challenging a valuation.

Gift tax exclusion increases to $13,000 in 2009

The amount that you can give to someone without having to pay the federal gift tax has been increased to $13,000 a year, effective for 2009. The previous maximum was $12,000 a year. Many people will want to take advantage of this new limit to increase their annual giving as part of their estate plan.

The limit is the amount that any one person can give to any other person. So for instance, if a married couple has three children, each spouse can give each child $13,000 in 2009. That’s a total of $78,000 that can be transferred to the next generation completely tax-free each year. [Read more…]

Landlord can’t be sued for one tenant’s harassment of another

Even if a black tenant’s family was subjected to racist comments and verbal abuse by a white tenant’s family, the black tenant can’t sue the landlord, says the Ohio Supreme Court. The black tenant claimed she kept an extensive record of the harassment and reported each incident in writing to the landlord. However, the landlord (a public housing authority) allegedly didn’t do anything. An Ohio law prohibits landlords from discriminating against tenants because of race. However, the landlord in this case didn’t itself harass the black tenant, the court observed. And the law doesn’t say that a landlord has to prevent other people from mistreating a tenant.

Despite this court’s ruling, this is a very difficult area for landlords. Landlords in many states may have a legal duty to protect their tenants’ safety and peace of mind – not to mention a moral obligation and a strong business interest in preventing this sort of misbehavior. On the other hand, it can sometimes be difficult for landlords to be sure of the facts when different sides tell different stories. We will be happy to assist you if you are facing a difficult situation with a tenant conflict.

Estate tax takes less of a bite – but planning now is still critical

Starting in 2009, you can leave $3.5 million to your heirs before the federal estate tax kicks in – up from $2 million previously. And in 2010, the estate tax is slated to be repealed altogether.

But contrary to what some people think, that doesn’t mean you don’t need to worry about estate planning! [Read more…]

Condo could prohibit religious displays on doorways

A condominium association can prohibit owners from displaying any objects on or in front of their doorways – including Christmas decorations and crucifixes, says a federal appeals court in Chicago.

In this case a woman sued because the condo rule had prohibited her from placing a traditional Jewish mezuzah on her doorpost. She claimed this amounted to religious discrimination. But the court said that the rule was valid as long as it was a blanket ban on all objects, religious or otherwise. [Read more…]

Family Limited Partnership saves family $120,000

If you’ve been wondering how a family limited partnership can save your family taxes, here’s a good example. 

Bianca Gross was a widow who invested in stocks.  She had two daughters.  She decided to create a family limited partnership, in part so she could involve her daughters in her investment decisions and teach them about investing.  Bianca became the general partner, and the daughters became limited partners.  Bianca had complete management control over the partnership, and the daughters were not allowed to sell their shares or dissolve the partnership. [Read more…]

It’s not always easy being green

Homebuyers, businesses, and residential and commercial tenants are all showing interest in “green” buildings these days – those designed to save energy, use sustainable materials and have less of an impact on the environment.

Many buyers and renters are willing to pay a little more for a green building – especially if they can recoup their money through energy savings.

But if you’re serious about going green, think carefully about the legal aspects. You’ll want to make sure the building really is as green as it claims, and that you get what you pay for. [Read more…]

How to leave a vacation home to your children

You might think it’s easy to leave a vacation home to your children in your will.  But there are many issues that can arise.  For instance, over time children might squabble over who will pay for major repairs or renovations, especially if some children use the property more than others.  Children might disagree about whether to sell the property.  And there are tax, liability and asset protection issues and opportunities as well.

If you haven’t thought a great deal about how a vacation home fits into your estate plan, we can help you come up with a plan that best fits your family’s needs, both now and down the road. [Read more…]

Who gets cash hidden in house by deceased former owner?

Imagine you bought a house and, a year and a half later, you discovered bundles of cash that had been hidden away by the deceased former owner. Who would be entitled to the money – you or the former owner’s estate? Confronted with just such a case, an Oregon appeals court determined that the new owner can keep the windfall.

William and Helene Valoff owned a house in Milwaukie, Oregon. After Mr. Valoff’s unexpected death, all assets of his estate were transferred to Mrs. Valoff. Following Mrs. Valoff’s death, her estate sold the house to Helen Sollars. The sale agreement required the estate to leave certain specific items (such as the stove and refrigerator) in the house, but to otherwise remove “all personal property” before the closing of the sale. [Read more…]

Here’s a second chance if you elected early Social Security benefits

Did you elect to take Social Security benefits before your full retirement age? If you did and are now looking for extra income, there may be an answer. Once you reach full retirement age, you can pay back the money you have received and reapply for full retirement benefits.

Although you can collect Social Security benefits between age 62 and your full retirement age, if you do, your benefits will be lower. For example, if you were born in 1944 and decided to retire at age 62, four years before your full retirement age of 66, your total benefit reduction is 25 percent. If your full benefit was to be $1,000 a month, your reduced benefit is $750. [Read more…]

Ombudsmen: front-line advocates for nursing home residents

Disagreements with a nursing home can arise regarding any number of topics, including the quality of food, troublesome roommates, lack of privacy, and services that are less than what was promised. Many disputes can be resolved by speaking with a nursing home staff member or supervisor, or moving up the chain of command. But if you can’t resolve things within the nursing home, your next step should be to contact the local ombudsman assigned to the nursing home.

An ombudsman is an advocate for residents of nursing homes, board-and-care homes, and assisted living facilities who is trained to resolve problems. Under the federal Older Americans Act, every state is required to have an ombudsman program that addresses residents’ complaints and advocates for improvements in the long-term care system.  [Read more…]

New law makes changes to reverse mortgages

In addition to addressing the current housing crisis, the Housing and Economic Recovery Act of 2008 makes changes to reverse mortgages, including higher borrowing limits and protections from aggressive marketing.

A reverse mortgage allows a homeowner who is at least 62 years old to use the equity in his or her home to obtain a loan that doesn’t have to be repaid until the homeowner moves, sells, or dies. The new law, which took effect in October, increases the borrowing level on reverse mortgages. The national limit on the amount a homeowner can borrow is now $417,000. This limit can be increased to $625,000 in areas with high housing costs. This is a big jump from the earlier limits, which were $200,160 and $362,790. [Read more…]

Spouses of Medicaid recipients may keep more money in 2009

The amount of money that spouses of Medicaid recipients can keep may increase in 2009, as a result of new guidelines issued by the federal Centers for Medicare and Medicaid Services.

The amount of assets that spouses of people who are on Medicaid and living in nursing home can keep for themselves is set by each state, but the federal government sets a ceiling and a floor that the states must follow. For 2009, the ceiling has increased to $109,560, and the floor has increased to $21,912. These amounts are in addition to assets that aren’t counted by Medicaid, such as a home. [Read more…]

Can you deduct the cost of ‘assisted living’ on your taxes?

If you live in an assisted living facility – or have a family member who does – you know that the costs continue to rise every year. But did you know some of those costs may be tax-deductible?

Medical expenses, including some long-term care expenses, may be deductible if they are more than 7.5 percent of your adjusted gross income. (You have to itemize your deductions, and the amount of the deduction varies depending on a number of other factors.) [Read more…]

Workers at small companies can sue for sex discrimination

Employees who work at tiny companies can sue for sex discrimination, the Massachusetts high court recently ruled. In the past, it was widely believed that a company couldn’t be sued for sex discrimination if it had fewer than six employees. That’s because the state sex discrimination law says that it only applies to companies with six or more workers. But the court said that an employee at a tiny company could sue under another law – the Massachusetts Equal Rights Act. This is an important decision because almost 60% of Massachusetts businesses have five or fewer employees.  The employee in this case claimed that when she told her boss she was pregnant, the boss became upset and demanded she take an unpaid leave of absence.

Can divorcing spouses blog about their ex?

It’s no surprise that divorce is unpleasant, and many spouses want to tell the world about how awful their ex-partner is. In the past, a spouse’s ability to do this was limited. They might want to tell the whole world, but in practice they usually just told a few friends over a drink or two.

But today, it’s easy to publish a blog that can be read by anyone with Internet access. And a growing number of spouses are taking out their frustrations by putting the intimate details of their failed relationships online for everyone to see. This can be extremely unpleasant and offensive to the other spouse. But is it legal? [Read more…]

How to leave a vacation home to your children

You might think it’s easy to leave a vacation home to your children in your will. But there are many issues that can arise. For instance, over time children might squabble over whether to sell the property or who will pay for major repairs or renovations, especially if some children use the home more than others. And there are tax, liability and asset protection issues to consider as well.

Here’s a look at some of your options:

First, you can sell the home to your children if you reach a point where you no longer want the responsibility of ownership. However, this could result in hefty capital gains taxes. [Read more…]

When buying a home, it’s not always easy being green

Homebuyers, businesses, and residential and commercial tenants are all showing interest in “green” buildings these days – those designed to save energy, use sustainable materials and have less of an impact on the environment.

Many buyers and renters are willing to pay a little more for a green building – especially if they can recoup their money through energy savings. [Read more…]

It’s easier to sue a store for selling liquor to a minor

It’s easier to sue a bar or a store for selling alcohol to a minor, under a recent decision from the Massachusetts Appeals Court. In this case a teenage boy went to a store and bought a 30-pack of beer. He shared it with some friends. One of the friends then drove away and struck another car, severely injuring someone. The injured person sued the store.

Ordinarily, a store can be sued for selling alcohol to a minor who then injures someone. But the store argued that it wasn’t responsible in this case, because the minor who bought the beer wasn’t the same person who caused the accident.  However, the court said the store could be sued anyway. If the store sold the beer to a minor, then it was responsible for all the foreseeable consequences of its actions, the court said. And it could be foreseen that a minor who bought alcohol would share it with his friends.

Mass. businesses must do more to stop identity theft

Many Massachusetts businesses will have to adopt new procedures to prevent the theft of sensitive customer information, as a result of new state regulations that take effect on May 1.

The new rules put Massachusetts in the forefront of protecting consumers’ private data and preventing identity theft. However, they also create many new hurdles for some businesses at a time when those businesses are facing larger economic challenges. [Read more…]

Disabled workers have more rights

Disabled workers in Massachusetts have more rights to request workplace accommodations and to sue for discrimination, as a result of a new federal law. The law amends the Americans With Disabilities Act (ADA) so that it covers more workers. It applies after January 1, 2009.

The original ADA protected people with disabilities, and defined a “disability” as a physical or mental impairment that substantially limits one or more major life activities. But that left open a question – suppose a worker could treat an impairment with a drug or a medical device, such that with the drug or medical device he or she was no longer limited in a major life activity. Was that worker still “disabled”? [Read more…]

Non-compete agreements get more scrutiny in down economy

With the economy in a downturn, there may well be an upturn in disputes about non-compete agreements, which prohibit employees from leaving and working for a competitor. Rising unemployment levels and the difficulty of finding a new job could lead many former employees to challenge these agreements. And this is true at a time when many courts are striking down these agreements or severely limiting them.

 The law varies from state to state, but generally a non-compete agreement must be reasonable in duration (usually less than two years), the employee must receive something in return for signing it beyond a simple continuation of employment (such as specialized training, bonus pay, or something else of value), and the agreement must actually be necessary to protect a valid business interest. [Read more…]

E-mails could modify an employment contract

E-mails between an employee and an employer could modify the terms of their employment contract – even though the contract said that any changes had to be in writing and signed. That’s the result of a decision from a New York appeals court.

The case involved the owner of a public relations firm who sold his firm to a French company. Their contract provided that the owner would continue as CEO for three years. After six months, though, he had lost the firm’s biggest client and fallen short of revenue targets. He was told that he could either leave the company or stay to work on new terms. The owner e-mailed the company and said, “I accept your proposal” (about the new terms), and the company e-mailed back saying it was happy with his decision. [Read more…]

Salaried workers sue for overtime

Is it possible for employees who are paid a salary to sue because they didn’t get overtime? It’s highly unusual, but a recent case shows how it can happen.

The case was brought by a group of Wal-Mart employees who claimed that the company changed their base salary so often that they were in effect hourly wage earners.  In general, federal law requires overtime pay for hourly workers who work more than 40 hours a week, it but exempts professional and salaried employees. The workers in this case were full-time Wal-Mart pharmacists. Wal-Mart agreed to pay them a base salary based on a minimum guaranteed number of hours, whether they worked those hours or not. But the workers claimed they weren’t really salaried employees, because Wal-Mart frequently changed the arrangement on them.  For example, one employee’s payroll records showed that on five occasions the company refused to pay his base salary because it had been altered based on “verbal agreements,” or it instituted “base changes” based on days off. A court said the case could go forward.

Employee sues for harassment by co-worker

An employee who claimed she was sexually harassed by a co-worker – who wasn’t her boss – can sue her employer for not having an effective policy in place to deal with such a problem, according to a recent court case. The employee claimed that a worker in another department sent her sexually explicit pictures, made lewd phone calls and left suggestive items at her work station. She sued the employer, claiming that the company fostered a “hostile work environment” in violation of a state anti-discrimination law.

Most companies focus on harassment by bosses, but it’s equally important for employers to have a policy in place to deal with harassment by co-workers. (It’s also a good idea for businesses to address harassment by third parties, such as clients or customers.) Generally, employees should have a written procedure that explains how to complain about any form of harassment.

Homeland Security may force companies to fire workers

The Department of Homeland Security has issued new rules that may require companies to fire certain workers. The rules come into play when the information that workers provide their employers doesn’t match the data on file with Social Security. Where this happens, the government can send the employer a “no match” letter, and the employer then has 90 days to resolve the discrepancy or fire the worker.

The idea is to reduce the number of people working illegally in the U.S. The Department originally issued the rules in 2007, but they were blocked by a federal court, which said they would impose unfair hardships on both businesses and employees in cases where there were errors in the Social Security Administration’s records. [Read more…]

Genetic law creates new ‘right to privacy’ for employees

A company can’t refuse to hire people because they are genetically disposed to develop a particular disease or condition, even if this would cause the company’s health care costs to skyrocket. That’s the result of a new federal law, called the Genetic Information Non-Discrimination Act, or GINA.

But this law does more than just prohibit discrimination based on genes. It also creates a new right to medical privacy for employees. In some cases, employers can get into big trouble if they violate this right to privacy.

Specifically, the law prohibits employers from requesting, requiring or disclosing genetic information about employees. This kind of information can come up when employees ask for time off under the Family and Medical Leave Act or for an accommodation for a disability. Employers frequently request medical records to support such a request. [Read more…]

New federal law gives disabled workers more rights

A new federal law makes it easier for many disabled workers to request workplace accommodations and to sue for discrimination. The law amends the Americans With Disabilities Act so that it covers more workers. It applies after January 1, 2009. The original ADA protected people with disabilities, and defined a “disability” as a physical or mental impairment that substantially limits one or more major life activities.

But that left open a question – suppose a worker could treat an impairment with a drug or a medical device, such that with the drug or medical device he or she was no longer limited in a major life activity. Was that worker still “disabled”? [Read more…]