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Recent Blog Posts
How to Stop a Zombie Bank Account
Millions of people take advantage of the convenience of online banking and bill paying, including setting up automatic withdrawals from their checking accounts each month. In many cases, it is done out of convenience. However, with some creditors, automatic payments may also be part of the stipulation for repayment, as in a loan repayment plan. When a person dies, and his or her bank accounts are closed, one would think that these automatic payments stop. Yet this is not always the case. Many families find that months later, they are dealing with "zombie bank accounts."
When a person opens up a checking account, he or she is given disclosure paperwork by the bank. Often included in those disclosures is the bank's right to reopen a closed account if a debit or credit arises. Banks do not have to decline the transaction. Moreover, they are also not required to notify the customer that an account has been reopened.
What Happens to an Illinois Estate When There is No Will?
Drawing up a will is something that most people know they should do. However, for one reason or another, many never get around to doing it. Moreover, when they die, it often leaves major legal issues for their loved ones to sort out.
When a person dies without a will, it is referred to as intestate. We hear story after story about families locked in major battles over a family member's estate, which often results in a manner that the deceased person would not have wanted. The only legal choice, however, is the one made by the court because there was no will.
This is the case with the estate of the late granddaughter of actor Morgan Freeman. Last August, the 33-year-old woman was stabbed to death. Her estate included a condo, worth approximately $800,000, that Freeman had purchased. When the young woman was murdered, she was not married, nor did she have any children or siblings. She also died intestate. According to New York law, where the young woman lived, her estate will go to her mother and father because she did not have a will.
The Illinois Mechanic's Lien Act
It is an all too common scenario for contractors and suppliers: work is performed and/or materials are supplied for construction on a piece of property, yet the work or materials are not reimbursed. As a result, contractors and suppliers feel that they will never see the funds owed them. However, under Illinois law, contractors and suppliers may file a mechanic's lien against the property owner.
Under the Illinois Mechanic's Lien Act, a contractor, subcontractor, or supplier can place a lien on a property if he or she has not received payment. The Act offers an additional source of protection for the contractor because it guarantees that filers of mechanic's liens will be paid before anyone else who may also have a lien on the property—the assumption is that the work done on the property (for which the funds are owed) improved the property, which increased its value.
Under the statute, there are strict criteria regarding the circumstances under which a mechanic's lien can be filed, as well as the time period in which it must be filed. The lien must also be filed in the county where the property is located.
How Will New Social Security Rules Affect Your Retirement Plans?
The Bipartisan Budget Act of 2015, which the President signed on November 2, 2015, contains multiple changes to payment strategies that many people utilized in determining when and how they would collect their Social Security retirement benefits. These changes eliminate "unintended loopholes" which ultimately financially benefited many claimants, and will particularly affect those who turn 62 years of age after 2015.
The first major change will be the elimination of double claiming. Many married couples—aged 66 years or older—have had the option of first claiming spousal payments (if the spouse was a higher earner) and then are able to switch to their own benefit amounts, which are now higher because they delayed in claiming. The longer one waits to claim his or her Social Security benefits, the higher monthly benefit amount will be.
Lawmakers Revise Illinois Condominium Laws
The new year brought with it the enactment of many new laws in the state of Illinois. Included in that batch of statutes were changes to the Illinois Condominium Property Act. Some of these changes have already become effective; however, some will not go into effect until June or July of this year.
Owners of condominiums own the unit they have purchased and, depending on the type of unit, may own a small portion of land around the unit. Ownership of the common areas and amenities of the development is shared by all the owners and is governed by a condominium association. All owners are members of the association, and they typically elect a board to oversee the policies and expenses of the development. Expenses are paid using funds collected for association fees all owners are required to pay.
When a buyer purchases a condo, they are required to sign a contract agreeing to abide by the association's rules and regulations. The Illinois Condominium Property Act establishes what rules and regulations the association can require.
Do Not Overlook Estate Planning Documents During Divorce Process
Just as June is typically referred to as the wedding month, January is quickly earning the moniker of divorce month. Statistically, there is a glut of divorce filings which occur on the first Monday of January, and those filings continue to occur on a steady pace for the rest of the month.
A person who is going through the process of divorce typically struggles with decisions such as child custody issues, property and asset division, as well as many other legal—and emotional—issues. Given all these upheavals, it could be very easy to overlook one very important issue which a divorcing person needs to address—the updating of estate planning documents.
If you currently have a will drafted, it most likely names your soon-to-be ex-spouse as an heir. There is also a good possibility that your spouse is also the executor of your estate, which means he or she controls whether or not your last wishes will be kept.
Estate Planning and Medicaid Options
Many Americans go through their adult life working hard and saving money with the goal to enjoy a comfortable retirement. Unfortunately, at some point in their senior years, it becomes too difficult for many people to live at home—a decision is ultimately made that that living in a nursing home is the safest and best option. However, nursing homes are expensive and Medicaid will only cover costs for people who all into the low-income category.
For those seniors who worked hard and saved their money, nursing home costs can quickly annihilate savings. This can be especially troubling when for elderly couples when one spouse is still healthy and is able to live on his or her own. Still, what will that spouse use to live on if nursing home costs for the other spouse is eating up all their money?
In order for a person to qualify for Medicare, individuals cannot have more than $2,000 in countable assets. These assets include:
Medicare to Now Cover End-of-Life Care Sessions
On January 1, 2016, Medicare will begin covering the medical costs for patients who wish to participate in end-of-life counseling sessions. Many medical personnel already discuss these subjects with patients, however, they do not receive any reimbursement.
Under the new coverage, physicians and nurse practitioners, as well as other health care providers, will now receive payment for the time they spend discussing end-of-life options with patients.
A report issued in 2014 by the Institute of Medicine, "Dying in America," touted the importance of providing patients with the opportunity to discuss what life saving measures they do or do not want taken in the event that decision has to be made, as well as other end-of-life care options. The report found that many patients suffer through invasive treatments instead of receiving more comfort care, mainly because they never have end-of-life care discussions with their physicians, or even their families.
The Benefits of 529 Savings Plan for Estate Planning
In light of the cost of college tuition and other associated expenses, it is never too early to start your children's or grandchildren's college fund. In fact, one option for savings—529 college savings plans—can actually offer estate planning benefits, as well.
The 529 savings plan debuted in 1996 as a way to set up an educational savings plan without having to pay federal taxes on any interest that is earned by the account. The plan gets its name from Section 529 of the IRS tax code.
There are two different types of plans. The first is the college savings plan. Like other types of financial savings plans, the funds that are deposited in this type of account are typically invested in bond mutual funds, stock mutual funds, money market funds, and other portfolio investments. These funds can later be used at any college or university. It is important to note that these funds are not federally insured or guaranteed by the state.
Are Intra-Family Loans a Smart Choice?
It is not uncommon for parents to provide financial assistance to their adult children for major purchases, such as the purchase of a new home. Moreover, the amount lent to an adult child may be dependent on his or her financial circumstances. However, one option that many families are considering is intra-family loans.
The rising popularity of these loans may come from the lack of higher-interest bearing savings accounts that most financial institutions offer. For parents whose money would be sitting in an account that is only earning approximately 1.5 percent interest, the lending of funds to be used as a mortgage to their adult child, and the earning of 4 percent interest, is a much more attractive proposition.
For an adult child, an intra-family loan can offer lower interest rates than what the lending institutions offer. Utilizing an intra-family loans can also help to avoid the often large down payments that lending institutions additionally require before they approve a mortgage. An adult child is still able to claim the interest he or she is paying to their parents on their income tax, as well. In addition, this interest "stays in the family"—either spent by the parents or it is eventually inherited by the adult child. None of it goes to a bank or mortgage company like traditional mortgage interest does.
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