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Money Management

Who Inherits Your Digital Assets?

July 31, 2014 By Twila Van Leer

Where Will Your Digital Assets Go When You Die?
Where Will Your Digital Assets Go When You Die?
It’s a phenomenon of today’s technology-rich world. Besides the usual concrete accumulations of your life, you have such personal things as Facebook, email, blogs and other “digital assets.” So, what happens to them when you die?

The question has become a matter for the Uniform Law Commission, people selected by states to promote standardization of state laws, when possible. The commission endorses a plan to automatically give next-of-kin access to all digital accounts of a deceased person. They would not, however, have control of the accounts. An individual could specify through a will or other official document, which accounts he or she wished to die when they did.

State legislatures would have to adopt the commission’s recommendations to make them law. The provisions would be very helpful, the commission believes, in estate planning.

Those who back privacy are not supportive. They say people shouldn’t have to draft a specific will to protect private information, for instance a dating profile or emails that contain personal information that the writer would rather not share with an ex-spouse.

On the other hand, information relative to finances would be very helpful to grieving relatives. Some would value sentimental content. People often put very personal musings, photographs and videos into their computer accounts. Such things as a cooking blog or the comments of a gambling avatar or the every-day ramblings of noted celebrities could be valuable commodities after their passing.

In an Associated Press article on the topic, Ginger McCall, associate director of the Electronic Privacy Information Center, says that a judge’s approval should be requisite to delving into a deceased person’s digital assets. Such accounts today are the “filing cabinets” of the past, said an attorney who sits on the commission.

Some people assume that sharing certain passwords with those they trust is sufficient to guarantee access in the event of death. They could even make the passwords available to someone they trust through the terms of a will. But wills become public property. Also, anti-hacking laws and the “terms of service” applied by most companies prohibit anyone from accessing someone else’s accounts. Loved ones innocently trying to follow the guidelines of a will could find themselves accused of criminal activity.

Some tech providers have addressed the issue. Facebook will “memorialize” accounts, allowing confirmed friends of a client to continue to view photos and old posts. Google, YouTube and Picasa Web Albums have versions in which, if a client does not log on after a specified time, the account can be deleted or shared with a designated person. Yahoo users agree when they sign on that the account will expire when they do.

But court cases have made it clear that not everyone believes that the technology supplier should have the final word. The survivors of a Marine killed in Iraq sued Yahoo for access to his emails and won. A mother whose son was killed in an accident likewise sued and was eventually given access to her son’s Facebook account. (She complained that the communications had been edited.)

The commission’s proposed law would supersede a provider’s terms of service agreement. But other rules, such as copyright or licensing agreements, would remain intact.

Sticky issues, certainly, but obviously germane in a day in which everything we think and feel is likely to end up on the computer. Almost certainly, clarification is coming in the way of new laws and more oversight.

Filed Under: Inheritance

Money Really Can Buy Happiness

July 17, 2014 By Twila Van Leer

Hire Help To Relieve Stress
Hire Help To Relieve Stress
We’ve all heard it a million times: Money Can’t Buy Happiness. But if you spend your money smartly, you’ll find it can increase your satisfaction and make life more pleasurable. It’s that “smart” part that makes the difference.

An article by Anisha Sekar in USNews.com cites a Princeton University study that concluded that when your annual income reaches at least $75,000, you are likely to have enough surplus over necessary expenses to do things that bring satisfaction.

The article suggests five ways to use your money to create happiness:

Give It Away

The first suggestion, strangely enough, is to give your money away. Using your surplus to help others is a feel-good option. The Chicago School of Business looked at what people did when they had a financial windfall. Those who shared their largesse with others reported they were more happy. If you want to indulge your own happiness, at least share an experience with someone else. Faceless donations are less satisfying than a shared positive experience. An experiment featuring college students and Starbucks gift cards came to the same conclusion. Students were divided into three groups. One was instructed to spend the gift card on themselves. A second group was to give their gift cards away and the third was to share the card with another person. The latter group reported the most satisfaction from the experiment.

Resolve Biggest Stresses First

Buy some peace of mind. Decide what is causing you to lose sleep at night and spend some money to resolve the problem. Worried about being burglarized or having your vehicle stolen? Buy products to safeguard your property and/or beef up your insurance to cover your losses if the worst-case scenario actually happens. Spend the added money to buy travel insurance if you are at all concerned that you might not be able to make the trip. The expenditure (everything you spend on insurance is a gamble) is worth the ease when you know you are covered.

Plan For Relaxation

If you are spending some of your well-earned excess on travel, decide in advance what sort of experience you want to promote. Would some relaxed time in a nearby bed-and-breakfast actually be as rewarding as a stressful as an expensive trip to Paris? What do you really want out of the vacation? Are you looking for the intense experiences or simply a longer time away from home at a more leisurely pace? Hire a cab instead of trying to fathom a foreign public transportation system. Tip a bellhop instead of schlepping a huge amount of baggage yourself. Budget ahead of your trip to avoid the penny-pinching after the fact. And if you and your traveling companions begin to show signs of stress, reconsider. Dropping items from the itinerary is easier than letting stress negate the whole experience.

Dining Decisions

If dining out is part of your plan for spending some of your excess cash, consider the alternatives. Do you want four $50 meals or one big $200 blowout that could more memorable? There are studies that say the $200 option might actually lend more to your overall happiness. But in this case, variety is, in fact, the spice of life. Doing the same exotic thing repeatedly, no matter how great it was the first time, can become a bore. You can afford it now. Look for different ways to spend a night out. Let each time become a new experience. Prolong the satisfaction by spending the month leading up to the event learning about the expected experience, studying menus and otherwise savoring the expectation.

Get Help

Buy some time. Move closer to work to minimize the commute. Hire someone to help with housework , yard work or any of the mundane and routine jobs most people spend the majority of their time on. Using some of your money to give you more leisure is a sure-fire was to increase your sense of well-being.

There, see? If you spend wisely, you can buy happiness.

Filed Under: Money Management

Feeling Insecure About Social Security?

June 13, 2014 By Twila Van Leer

social-securityIf you’re contemplating looking closely at your Social Security options, the first rule is: Don’t depend on the Social Security Administration to come running with individual advice. The administration makes the options (many and often confusing) available. You’re on your own to do the research and determine what approach is best for you.

William Meyer operates a website, Social Security Solutions, which, for a fee, looks at your data and suggests the best solutions. He advises, based on long experience, that if you are considering a less-common choice for receiving your SS benefits, that you go directly to the nearest SSA office. You can’t depend on the agency following electronic requests if they are out of the ordinary, he said.

The obvious choice for maximizing your SS payments is to begin collecting benefits after age 70. The monthly payment at that age is 76 percent higher than if you start getting checks at age 62; 32 percent higher than if you made your first claim at age 66. That means, of course, that you must bank on longevity, gambling that you’ll live long enough to collect the higher payments to more than break even. If you live until age 90, you will accumulate almost $162,000 more in benefits.

However, Merton Bernstein, retired law professor and SS expert, advises acting on the side of the odds. He says the longevity odds are so bad that it’s a rash bet. “Take the money and run,” he suggests.

Marital status has a large bearing on SS issues. If you choose to divorce after less than 10 years, you lose the opportunity to collect SS benefits based on up to half of your ex’s earnings or on the basis of your own earnings, whichever is greater.

The sad truth is that if you don’t remarry, your ex-spouse is worth more to you dead than alive, especially if he or she was a high earner, says Carol Thomas, who worked for the SSA for more than 28 years. She answers questions about SS at RetirementCommunity.com. When an ex-spouse dies, you will be treated just like a widow or widower, she said. If you are at least 60, you can collect your expired spouse’s benefit, allowing your own benefit to grow unclaimed until you reach age 70. Then you can switch if your own is higher.

The longer the ex-spouse works, the better your associated benefits will be, so if it is feasible, encourage him or her to stay employed at least until age 70. Then at the death of the ex-partner, you can claim half of his or her maximum SS.

There are key differences between spousal and widow/widower benefits that can be very confusing, said Dan Keady, director of financial planning tor TIAA-CREF Financial Services. A widow or widower can begin benefits based on his or her own earning record and later switch to survivors benefits. Or he/she can begin with survivors benefits and later switch to benefits based on his/her own earnings, even if the surviving spouse is filing before full retirement age. That is not possible with spousal benefits.

Applying for disability insurance, the first step should be to hire a lawyer or other expert adviser, according to the experts. Representatives of the administration won’t tell you that, but it is important to have representation from the outset. An application for disability benefits should be accurate and precise. Small mistakes can interminably slow the process or result in denials. A better explanation of benefits might be found at MyRetirementPaycheck.org, sponsored by the National Endowment for Financial Education.

It’s a long and often complicated process. The answers are available and you should consider all your options. But it may take time and the involvement of others who have expertise.

Filed Under: Retirement Tagged With: social security

Correcting Your Credit Report

May 31, 2014 By Twila Van Leer

Errors can keep you from qualifying for a home purchase.
Errors can keep you from qualifying for a home purchase.
What used to be “a brick wall” consumers crashed into when they tried to correct information on their credit reports is falling, Money Magazine reports. Errors on your credit report often influence an individual’s ability to buy a home or make other major financial decisions.

The Consumer Financial Protection Bureau has pushed for easier ways to make corrections in the reports. Three major credit reporting companies, Equifax, Experian and TransUnion, have always been convinced that they need to allow customers to dispute mistakes but now they are making that process streamlined by offering a way for consumers to do it online and in greater detail. The companies have changed their complaint systems in response to the CFPB pressure, the magazine states.

Under the new processes, the reporting agencies are obligated to forward materials provided by the customer to the creditor. If the alleged errors are confirmed, the creditor is obligated to fix the errors with all three of the reporting agencies. In 2011, the agencies received about 8 million complaints about errors in their reports.

To submit disputes online use these addresses:

Trans Union
Equifax
Experian
To receive a free report once a year go to:
Annual Credit Report

You must have the number of your credit report to access these sites.

To expedite the correction of mistakes, contact both the credit bureau and the organization that provided the information to the bureau. Both are obliged under terms of the Fair Credit Reporting Act to correct inaccurate or incomplete information in your report.

Usually after you have reported specific mistakes in your credit report, the credit bureau must investigate within 30 days, unless they consider your complaint frivolous. Include copies of documents that support your complaint, not the originals. It might be well to include a copy of the erroneous report with the information you are contesting clearly identified. State your complaint and add material to support your position. Request that the erroneous material be deleted or corrected. Be sure your complete name and address are included. Make copies of the correspondence and send the letter by certified mail.

Notify the creditor who has received the erroneous report that you are disputing the information and are in touch with the credit bureau. If the provider chooses to correspond with the bureau, he should include a notice of your dispute. Ask for copies of their correspondence. The process takes 30 to 90 days.

Check your credit reports on a regular basis so that you can keep your buying power strong.

Filed Under: Free Credit Report Tagged With: credit report, money management

Which Debts Should You Pay Off First?

May 21, 2014 By Kevin Mercadante

Managing Debt, Debt ManagementThere is all kinds of advice floating around as to which debts you should pay off first. Most advisors seem to have a preference for paying off credit cards or mortgages ahead of other types of debt.

There may be no right and wrong when it comes to paying off debt – after all, paying off just about any debt is a step in the right direction. But some debts are more threatening than others, so we’re going to look at paying off debts in the order of most risky to least risky. When you look at it that way, the whole order changes.

1. Car loans

I am a strong advocate of paying off car loans ahead of any other type of debt. There are two primary reasons for this:

High monthly payment to balance. If you owe $10,000 on a credit card, your monthly payment is probably around $200. On a student loan debt, it’s probably a little bit over $100. With a car loan, the monthly payment could easily be $400. That is a big, fat monthly payment, and getting rid of it as soon as possible will do wonders to improve your cash flow, and make it easier for you to concentrate on paying off other debts. Typically, paying off a car loan gives you the greatest bang for the buck when it comes to improving your budget. This is why it needs to be the first loan that you pay off.

The outcome if you are unable to pay this debt. This is an issue most people don’t think much about, but you need to. Typically, a car is an asset that you use in the production of income. Whether you use your car for business purposes or to commute to your job, you need your car in order to earn a living. If you lost your job and could no longer afford to make the payments on your car, the car would be repossessed and you would be unable to get a new job for lack of a way to get there. For this reason alone, paying off your car loan should get top priority.

2. Business loans

There are a large number of people who are self-employed in small businesses and have certain assets that are required in order for them to generate income. Paying off debts associated with these assets is a close second to paying off car loans.

The case here is similar to giving a priority to paying off your car loan. An asset used in the production of income should be owned free and clear, that way if you hit on hard times and couldn’t afford to make your debt payments, you will still be able to earn a living.

3. Other secured loans

If you have a secured loan that is collateralized by an important asset, you should pay it off as soon as possible. This may not be a true priority if the loan is secured by furniture or a recreational vehicle, since they are not necessities. But if the loan is attached to something you can’t live without, it should be given a priority. This is because normal functioning in your household will not be possible in the event that a major asset is repossessed.

4. Credit cards – smallest to largest

Most financial advisors make paying off credit cards the number one priority. But in the grand scheme of things, credit cards are more of an annoyance than anything else. If you fall behind, the creditors can harass you and threaten you with of all kinds cataclysms, but they won’t be able to remove important major assets from your life. You’ll still be able to get to work every day, to heat your house and to do your laundry, you’ll just have to get used to living under a constant cloud of threats.

The two most compelling reasons to payoff credit cards are:

  1. High interest rates, and
  2. The rates are variable

These are legitimate concerns, but in the current low interest rate environment, you have time to payoff the more dangerous loans listed above before taking on any of your credit cards. And if you do, you’ll have more cash to payoff your credit cards.

5. Student loans

These days it seems that nearly anyone who has a student loan wants to pay it off. That makes sense, given the long-term nature of the debt. But at the end of the day, student loan debts are simply not that threatening. Monthly payments are low compared to the outstanding balance, and interest rates are far more well behaved than your credit cards. In short, student loans aren’t going anywhere so you have plenty of time to take care of other debts first.

Given the fact that student loan debts are typically large balances, you’ll probably need to payoff other debts before taking on these. In order to make substantial progress in paying off a large balance, you’ll have to clear the decks of other obligations to free up your cash flow to make the larger payments. Which is another compelling reason to pay off other debts ahead of your student loans.

6. Your Mortgage

Next to credit cards, paying off the mortgage is probably the most recommended course of action. But there are a whole lot of reasons to hold this debt until last:

  • The loan is secured by your home, which probably has enough equity that you can sell it to payoff the loan, if push came to shove.
  • If you have negative equity in the house, the lender would be in no hurry to foreclose on you anyway, giving you time to work out some sort of settlement.
  • Mortgages typically carry lower rates of interest than other types of debt.
  • You’re probably getting some kind of income tax break on mortgage interest.
  • If it’s a fixed rate mortgage, your payment cannot increase.
  • A mortgage is long-term debt, which means you have close to forever to pay it off; in the meantime, you have the benefit of living in the house.

Perhaps the biggest reason of all to put mortgages at the back of the payoff line is their sheer size. Let’s say that you are three years into a 30 year mortgage, and still owe $250,000 on it. Even if you concentrate all of your efforts on paying off the mortgage, it will probably still taking years to do it.

And if it will take years, you’ll need to have all of your other debts paid off first, that way you’ll have the money that you need to make a serious effort to make your mortgage go away.

Filed Under: Credit, Debt Tagged With: money management

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