Important points mentioned while writing a will

January 26, 2010 · Filed Under writing a will · Comment 

Many people do not know about the things to be mentioned while leaving in a will. If you are writing a will, make sure that you own it at the time of your death. There may be some assets that you think you own it outright, but in legal terms, you do not. When you are writing a will, the assets have to be in your sole name or the gift will fail. Some examples are:

  • Jointly held assets (Joint Tenants)

Bank accounts: If you have a joint account, you cannot leave this to anyone since it is jointly signed with the other person to whom it will automatically pass after your death.

Insurance policies: If the insurance is a joint policy, then the other named holder will gain the ownership.

Houses: This is the biggest asset for the most people. If the deed has two or more names, and you hold it as joint tenants, then the other named tenant will automatically gain ownership on your death and you cannot leave this asset to anyone else. You can change the ownership to someone else in the deed so that the ownership can get transferred to the other person mentioned in the deed. This is the most overlooked aspect of Estate planning and if it is not done correctly, then it will cause problems from a tax point of view or more importantly from funding long term care.

Investments: If the investments are held jointly, then it will pass to the other person jointly signed with you. No one else can claim for it.

When writing your will, the first thing you need to do is to generate an Asset Register. Make a list of everything you own and put a value on it. Next thing is to determine how you own that asset. Is it solely owned by you or is it jointly signed with someone else? Once you have made your list then determine who you want to leave the assets to. There are different ways of leaving the assets.

1) You can leave them outright to a named beneficiary i.e. I leave my Bank account number 123456789 to my elder son X absolutely.

2) You can leave the assets to a group of beneficiaries in an equal split i.e. I leave bank account number 123456 to all my children in equal shares.

3) You can leave the same bank account number in unequal shares i.e. 50% to my elder son X, 25% to my younger son Y and 25% to my daughter A.

You can write wills in the same pattern for your insurance policies, house(s), and other investments.

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How to keep a perfect control on your holiday spending

December 2, 2009 · Filed Under Holiday Spending · Comment 

The spending habits go out of control during the holidays, especially during the Christmas and the New Year eve. There are so much expenses on parties, gifts, family meetings and before you realize how much you have already spent, your credit cards are maxed out and the whole paycheck is gone on presents and grocery shopping for that Christmas dinner and all the fixings.

There are ways to minimize the expenses during holidays and the best way is to do it by using a prepaid debit card. These prepaid debit cards are good for those people who do not have any control on their spending habits. There are so many people who keep on spending over and over until that Christmas spirit leaves their body, and later, they are left sitting at their kitchen table looking over all the bills. They try to catch up in their payments for the whole year and finally they find themselves perpetually in some kind of predicament.

The best way to keep a perfect control on your expenses during holidays is to use a prepaid debit card and some budgeting throughout the year. You can keep some funds aside from your paycheck every month so that you are able to build some funds for shopping purposes in the holidays. You can use this money to refill your prepaid debit card so that you don’t have to use a credit card and max it. You can start saving some money from your paycheck every month and put it towards your prepaid debit card. This way you don’t have to pull out any extra money out of your family budget. If on a certain month, you get a bonus check, you will be able to add more to your prepaid debit card. After all, this is extra money that you are building up for your Christmas expenses, buy amazing gifts for your family members and friends.

This habit of adding funds into the prepaid debit card is not only good for the holiday season but you are able to plan your finances throughout the year. When you have built enough funds on one prepaid debit card, you may try the same thing on another card so that you can gift one to your children.

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Financing for small business

September 6, 2009 · Filed Under Financing, Small Business · Comment 

Good credit is very important if you are looking for financing your small business. Even though if you have got the financing, it may be critical for any business to grow without good credit. Without financing, your business will not be able to meet the growing demands or buy equipment and facilities needed to expand. Due to the recent economic crunch, credit and financing are getting harder to come by using banks and traditional financing methods. If you are not having an impeccable credit to start your own business, you may explore through different financing options but be careful of falling into any kind of scams, or may not be as good as it seems.

Any business needs financing options, especially in the current economic crisis. Not only the smaller companies are suffering because of the economic crisis, big companies are also facing difficulties because of lack of financing. Credit is very important and if the bigger companies are facing tougher times because of lack of credit, small companies do not stand a chance. Financing is needed for different reasons like purchasing or hiring a warehouse, or to enlarge the current one. Inventory is needed to create more products because of the increasing consumer demand. Some companies will also stress on larger work force to increase the overall production and sales. If there is no finance in the market, the company will become stagnant due to inability to grow.

Sometimes it may seem that you have different financing options, until you look at them closely. Many a times, the financing can take the form of credit card limits, or vendor credit. It may not be enough to keep a small business afloat. There are programs which offer cash financing, but they are offered in such a small amount that it is not helpful enough. Getting a new credit for your small business can often get tough if there is no extended history or credit. Many lenders will turn down your financing or loan application if they do not find your business incorporated or has a strong history in the business area. There should be some kind of program that should decide the credit approval not just on the basis of credit history or the number of years of a business.

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Cancellation of debt

August 2, 2009 · Filed Under Cancellation of debt, Debt · Comment 

If you got a debt settled with your creditor and no further obligations to pay back the remaining balance waived off, you have to report it as a tax loss to the IRS using a 1099-C.

IRS will treat the cancelled debt as your income and will need you to file taxes on this even though you have not received the money. 1099-C form lets you know that the creditor is going to write off a certain balance. Your creditor will fill the 1099-C form and show the cancelled amount. This form has to be filled only if the cancelled amount is more than $600. You will receive a copy of the form by Jan 31 and the IRS will receive the form by Feb 28 of the tax year in which the debt was discharged.

Once you have got the form from the creditor, report the amount of the canceled debt as an income to the IRS and you will pay taxes on it. IRS exempts the following situation when the cancelled debt does not need to be shown as an income

When you have filed for bankruptcy and the debt was discharged.

Your total debts exceeds your total assets at the time when your debts were settled or deemed non collectible.

Indebtedness is due to a qualified farm expense or due to loss on real property business.

When the debt discharged is treated as a gift. However, these situations can be extremely rare.

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Paying counseling fees for financial advice

July 13, 2009 · Filed Under Financial Advice · Comment 

A financial advisor is a professional expert who advices ordinary people on how to manage their money and make better plans for retirement. These financial advisors have got their certification from reputed colleges for accounting, finance and they usually get accredited in some ways such as becoming a Certified Financial Planner (CFP) or Certified Public Accountant (CPA). They gather a lot of professional experience in personal money management, investing, financial planning, estate planning, and other financial aspects.

Most of the big institutions, employers or an individual hire financial advisors for handling and making financial decisions for the company’s growth. In most cases, these financial advisors will charge fees for consultations, mutual fund managements, and other financial services. Taking the advice of a financial advisor will help you a lot in the financial area.

Many of us do not know enough when it is about making financial decisions. Just because of not having enough knowledge about finances, most of the people end up falling in debts and making poor money choices.

If you are not able to make good financial decisions in your personal life or for your business, it is a good idea to have a financial advisor who can help you in managing money. Its worth to spend some money in hiring a financial advisor and make important decisions for you so that you can manage your money in the right direction.

If you cannot afford to hire a financial advisor, then it is a good idea to get yourself educated in making good financial decisions. Books are not expensive; you can go to the library and read more books on finances. This way, you can save a few hundreds of dollars a year by investing a couple of hours a week reading and learning about money management.

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