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Money February 2014

Dollar Sense

Potpourri: Miscellaneous Stuff About Money and How to Protect Yours

By Teresa Ambord

The most generous among us were those 68 and older, giving an average of $1,370 each. They donated used and new goods, cash, and also gave their time to volunteer efforts. Mostly they donated to their places of worship, but also to social service groups (like those supporting the homeless and victims of disaster), and to educational institutions.

What happens if you die before you get around to making a will?

That’s called “intestate.” If this happens, the state dictates who inherits your assets. The laws vary by state, and are based on who your survivors are, that is, a surviving spouse, children, siblings, and other relatives.

The rules of intestacy are fairly inflexible. It could be that your wishes will be accomplished but not necessarily. Here’s an example. You may have a lifelong friend who you intend to give your assets when you pass away. But without a will, even if you have no close family members, a distant relative… like your disagreeable cousin Freda may end up with everything.

If you have children, without a will, your assets will probably be divided equally among them. But what if one of your kids owes you a lot of money and has made no effort to pay you back? Do you really want that child to get the same inheritance as the others? Do you have a child with special needs? Your intention may be to leave that son or daughter a larger portion, but that is unlikely unless you make a will.

Of course, making a will is distasteful to many. Some say it feels like they are giving up, ready to die. But not making a will can put an undue burden on your survivors, causing family fights and maybe estrangement. With a little forethought you do them a great kindness by avoiding all that.

 

Americans are a Charitable Bunch: Can You Guess Who Gives the Most?

It’s all over the news when a private foundation gives a big charitable donation. In 2012, they
gave $45.7 billion to good causes. Not bad! But it pales in comparison to how much individuals gave in the same year – that is, $228.9 billion.

The amounts left to charity in their wills actually fell a little in 2012, but that total was still an impressive $23.4 billion. Who gave?

The most generous among us were those 68 and older, giving an average of $1,370 each. They donated used and new goods, cash, and also gave their time to volunteer efforts. Mostly they donated to their places of worship, but also to social service groups (like those supporting the homeless and victims of disaster), and to educational institutions.

Next came baby boomers, (ages 49 to 67), giving an average of $1,200 per year. The recipients of boomer generosity were similar to those of their elders.

Generation X (ages 33 to 48) gave an average of $732 per year.

And Generation Y (ages 18 to 32) gave $481 per year on the average. These givers tend to be more skeptical, demanding accountability from those they donate to, and expect to see the direct impact of the donations they make.

Donation requests come in the mail, on the phone, on TV, and online. Unless you are personally familiar with a charity, don’t give until you do a quick check to ensure the charity is real. Every national disaster causes a bunch of new bogus charities to rise up. You can check their legitimacy at Charity Navigator, by logging onto http://www.charitynavigator.org/.

 

Scams by the Calendar: What Scams Hit Most at This Time of Year?

• The Start of a New Year

Can you guess what the number one scam that is pushed at the start of the New Year is? You probably can. It’s fraudulent weight loss claims, according to the Federal Trade Commission. It doesn’t take a thief to know we’re all focused on weight loss right after the indulgence of the holidays and the “fresh start” feel of the calendar flipping to a new year. Everyone likes an easy answer, but we all know there are no “miracle” weight loss supplements or devices, and though it’s tempting to believe, we know that products which say you can lose weight without exercise or without changing your diet are likely to be bogus.

A representative of the Federal Trade Commission (FTC) issued a written statement about the complaints they have received:

"In these cases, although sellers said their products would help people lose a substantial amount of weight or lose weight without diet or exercise, the nonprescription drugs, dietary supplements, skin patches, creams and other products they bought didn't work as promised." (Statement by Bridget Small, the FTC's assistant director of consumer and business education).

By the way, the FTC is distributing $5.9 million in refunds to over 316,000 people who bought weight loss (Acai Pure) or cancer prevention products (Colotox). If you purchased these products, contact the FTC at 1-877-283-6531.

What to do?

Report fraud by visiting ftc.gov/complaint. You can stay ahead of scams by getting e-mail alerts from the FTC. Subscribe at:  https://public.govdelivery.com/accounts/USFTC/subscriber/new?topic_id=USFTC_31

 

•Tax Time Scam

Scammers work around the clock and around the calendar, seeking new ways to steal from you. Some of the scams are ham-handed, particularly those from countries where the thieves speak little or no English. But many thieves are sophisticated. They try to be one step ahead of you to match their pitches to what you may be in the market for. As tax time rolls up, be on the lookout for unsolicited offers of help from fraudulent tax advisers and financial planners.

Clues to watch for when it comes to investments: the words “guaranteed,” “secret” or “little known,” or “risk-free.” No such investment exists. And a tax preparer who guarantees a high refund is likely planning to manipulate your financial data to force a fraudulent refund. Don’t walk away from this person… run! Not only will you want to avoid them to stay out of illegal or shady schemes, but keep in mind, whoever advises you will have access to your Social Security number and other identifying information. The last thing you want to do is trust that person with your identity.

What to do?

For financial advisers, you can verify their legitimacy by going to finra.org/Investors/ToolsCalculators/BrokerCheck.

Check tax preparers at your local Better Business Bureau at bbb.org.

Check attorneys by going to the website of your state bar association. For example, California’s state bar association is found here, http://members.calbar.ca.gov/fal/MemberSearch/QuickSearch. Then go to “attorney search” and you’ll find information about the attorney’s eligibility to practice law.

 

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.

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