Meet our writers

 







Money June 2018

Dollar Sense

Potpourri: Stuff You Should Know to Protect Your Benefits and Other Assets and Keep Track of Your Money and Where It’s Going

By Teresa Ambord

Believe it or not, many people believe they can pull out an existing will and using a pen, scratch out part of it, initial it, and … done deal. Imagine the satisfaction of doing that the next time Cousin Edna insults your lasagna noodles, right? Wrong.

* * * * *

A holographic will has a tough time getting through probate. Picture your chihuahua trying to swallow peanut butter. Yeah… it’s a lot like that.

Tell Social Security You’ve Moved

If you receive Social Security and/or Medicare, make sure you inform the Social  Security Administration (SSA) when you move. That’s especially important now while the SSA is mailing out new Medicare cards. Even though the Internet is a virtual playground for scam artists, snail mail is still vulnerable to thieves. They’ve been known to file a change of address notice with the local U.S. Post Office, to snag your personal information, checks, and to keep you from finding out that they’ve opened accounts in your name.

It’s not as easy as it used to be for someone to change your address with the post office (I remember in the early ‘90s when my young son had a fight with a neighbor kid. All the kid’s dad had to do was tell the postal carrier we’d moved, and suddenly my mail stopped) but it can and is done. That’s why you should have an online mySocialSecurity account so you can protect yourself by making sure your information is up-to-date.

When your new SS card arrives, it will have a new, more secure Medicare number. Until now, your Medicare number has been the same as your SS number, with the addition of one letter. And while most of us don’t carry our SS cards with us, we do often carry our Medicare cards (although you really don’t need to). For decades, advocates for seniors have been asking for a better system that doesn’t use SS numbers. Finally, our voices have been heard, and new cards started being mailed out in April 2018, and will continue on a schedule through April 2019.

You should know, scammers have been calling seniors and telling them they must pay a fee to receive their new cards. Here’s what the SSA says:“Medicare will never call you uninvited and ask you to give us personal or private information to get your new Medicare Number and card. Scam artists may try to get personal information (like your current Medicare number) by contacting you about your new card. If someone asks you for your information, for money, or threatens to cancel your health benefits if you don’t share your personal information, hang up and call us at 1-800-MEDICARE (1-800-633-4227).”

Here's a chart (courtesy of Clark.com) of when you can expect to receive your new card.

  1. Delaware, District of Columbia, Maryland, Pennsylvania, Virginia, West Virginia
    April – June 2018
  2. Alaska, American Samoa, California, Guam, Hawaii, Northern Mariana Islands, Oregon
    April – June 2018
  3. Arkansas, Illinois, Indiana, Iowa, Kansas, Minnesota, Nebraska, North Dakota, Oklahoma, South Dakota, Wisconsin
    After June 2018
  4. Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont
    After June 2018
  5. Alabama, Florida, Georgia, North Carolina, South Carolina
    After June 2018
  6. Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Texas, Utah, Washington, Wyoming
    After June 2018
  7. Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Puerto Rico, Tennessee, Virgin Islands
    After June 2018

 

Still Working? With the Tax Changes, Will Your Employer Withhold Enough Federal Tax?

One great result of the Tax Cuts and Jobs Act is that most people see money in their paychecks, because less is being withheld. Our standard deductions have nearly doubled, and the tax rates have dipped. Those are good things. But the personal and dependent exemptions have been eliminated. For myself, I saw my paycheck jumped $50 every two weeks. I get 26 paychecks a year, so that equates to an extra $2,300 without me lifting a finger. I love that, but because other changes in the new law will also have an effect, I wanted to make sure I was having enough withhold to cover my liability.

The IRS has always had a calculator that can estimate your tax bill, in time for you to adjust your withholding. I use it every year because I have some self-employment income that fluctuates. So, in July, when I’m half way through the year I use the calculator, which projects the full year, to see if I need to adjust my withholding up or down, if at all, while there’s time.

Now the IRS is emphasizing that everyone should take a moment to use the calculator, (link below). It’s easy and doesn’t take long, but you’ll need a few things to fill it out accurately. Have a recent pay stub available and your last tax return so you can enter relevant information. If you expect your income and circumstances to change a great deal this year, you’ll have to adjust it. If the answer doesn’t seem right, you can start over and go through it again with extra care. I’ve done it many times but this year I went through it twice to make sure I had it right. Because my income varies somewhat, I do this every July. By then, I’ve received half a year of income and if I need to adjust my withholding, I still have half a year to smooth out the end results.

With the new lower withholding, the IRS encourages everyone to do a “paycheck checkup,” just in case. Remember, this is an estimate, not an exact figure.
https://www.irs.gov/individuals/irs-withholding-calculator

 

Changing Your Will to Eliminate that Annoying Someone

If you made a traditional will or a living will, congratulations. Only about 41% of Americans have taken that important step (according to a 2017 study by Caring.com) though the older we get, the higher that percentage climbs (among Americans older than 71, about 81% have done this, proving that wisdom often does come with age). Even if you have a will, are you keeping it properly updated?

Believe it or not, many people believe they can pull out an existing will and using a pen, scratch out part of it, initial it, and … done deal. Imagine the satisfaction of doing that the next time Cousin Edna insults your lasagna noodles, right? Wrong. Manhattan-based trusts and estates attorney, Damien Bosco, says that many people believe it’s all they need to do, but, he adds, “this is never the case.” Changes made this way simply aren’t valid, says Bosco, which is why he puts it fairly high on the list of estate planning mistakes that people make.

If your existing will no longer reflects what you want, get it done properly. Pull out your existing will and make sure the beneficiaries you named are still the ones you intended. Are there new grandchildren to add? Marriages or divorces that make you rethink who gets what? Deaths in the family? Has your son developed a gambling problem that makes you leery of leaving him cash? Is your daughter a shopaholic who might blow the family fortune in one trip to Rodeo Drive?

Even for states that are somewhat lax when it comes to the laws surrounding wills, crossing Uncle Frank off your paper will and leaving everything to your labradoodle won’t work. So, once you’ve figured out what changes you want to make, contact your estate advisor or financial planner and get it done right. Otherwise, the courts will generally presume that the will as it existed before you marked it up with a pen is the will you want enforced.

 

If You Don’t Have a Proper Will, Can You Just Jot Down Your Wishes?

If you have created a holographic will — that is a handwritten will — it may be valid, depending on your state’s law (about half of all states recognize holographic wills). But it’s not the best answer, because a holographic will has a tough time getting through probate. Picture your chihuahua trying to swallow peanut butter. Yeah… it’s a lot like that. Even if your state allows a holographic will, many of them add specific requirements, so if you’re going to do this, check with your state. https://statelaws.findlaw.com/colorado-law.html

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

Meet Teresa