Get a HIPAA release for your college-age child

If you have a child who is away at college, you should be aware that the federal medical privacy rules apply to him or her. Once your child turns 18, the federal HIPAA law says that you can no longer have access your child’s medical information without his or her consent.

That’s a problem, because if there’s an emergency and your child isn’t able to provide consent, you might not be able to access the information you need to make important medical decisions. In fact, it might not even be clear that you have the legal right to make such decisions. [Read more…]

Four big mistakes many executors make

Executors have a tough and often thankless job. They have to marshal all the estate’s assets, file tax returns, and distribute property according to the will. Sometimes, they make mistakes. Here’s a look at the most common ones:

Paying bills too soon. Executors often see bills arrive in the mail and decide to pay them right away to avoid any problems. But this can actually create problems.

There’s an order in which bills must be paid: Items such as taxes, funeral expenses and the costs of estate administration typically take priority over credit card statements, for instance. If an estate turns out to have a lot of debts (perhaps the person who passed away had an unexpected tax bill), and the executor has paid off low-priority debts first, there might not be enough money to pay the high-priority debts, and the executor might be personally liable for them. [Read more…]

Estate planning may be harder for couples without children

You might think that estate planning would be easy when couples don’t have children. In fact, it can sometimes be more difficult – and also more important.

Couples with children generally agree about passing on their assets to their kids, and can rely on their offspring to serve as caregivers and executors. It might not be so easy for other couples.

For instance, suppose Mike and Helen write a will leaving their assets to each other. If Mike dies first, Helen will inherit everything. When Helen dies, who will get Mike’s assets? Helen could make a new will, but if she doesn’t, all of Mike’s assets will go to Helen’s relatives according to state law. [Read more…]

Moving an elderly relative? Think about state taxes

It’s a common scenario: An elderly relative is no longer able to live alone, so family members sell the relative’s house and have the relative start living with them or in a nursing home or assisted living facility that’s closer to the family.

One thing you might not consider during this stressful process is that if the relative moves to a different state, you might have just changed the person’s official state of residence for tax purposes. And that could have a significant effect on his or her estate plan. [Read more…]

Be careful with inherited IRAs

Leaving someone an IRA as an inheritance can have a lot of tax advantages, and it’s often a very good estate planning strategy. However, the rules for inherited IRAs are complicated, and it’s easy to make mistakes.

If you have recently inherited an IRA, or if you expect to inherit an IRA, it’s important to speak to an estate planner or other advisor right away before you make any decisions about the account. And if you’re planning to leave someone an IRA, you’ll want to make sure that person knows what to do, so the tax benefits aren’t lost through an innocent mistake. [Read more…]

Smart financial decisions are simple, but not easy

Seeing purchases your friends post on social media can leave you envious – and might also foster a desire to buy a similar item. That can be a problem if your goal is long-term financial freedom, because spending money on items you may not need can derail your plans. Three simple habits can help you stay on track. [Read more…]

New procedure for 60-day rollover errors

Did you inadvertently miss the 60-day time limit for making an IRA or retirement plan rollover? You may be able to avoid taxes and possible penalties by notifying your account trustee with a “self-certification.”

When you take a distribution from your IRA or qualified plan with the intention of depositing it, or “rolling it over,” into another IRA or qualified plan, the 60-day rule says you’re required to complete the rollover within 60 days of receiving the distribution. In the past, when you missed the deadline, you generally had to request relief from the IRS. That meant paying a fee and going through a process to obtain a written statement waiving the rule. [Read more…]

Plan ahead for year-end business tax savings

As the end of the year approaches, turn your attention to ways you can reduce your 2016 tax liability. Here are suggestions. [Read more…]

Tax filing reminders

  • October 17 – Deadline for filing your 2015 individual tax return if you requested an automatic six-month extension of the April deadline.
  • October 17 – If you converted a regular IRA to a Roth in 2015 and now want to switch back to a regular IRA, this is the deadline to do so without penalty.
  • October 17 – This is the last day to fund your Keogh or SEP plans if you requested an extension of time to file your tax return.