June 2009 Archives

June 29, 2009

Michael Jackson's Mother Granted Temporary Guardianship

Michael Jackson left behind a tangled financial web, sure to take many years and many lawsuits to sort out. But he also left behind three young children (aged 12, 11 and 7) and, apparently, no valid will (at least, one has not yet been submitted to the Los Angeles County Probate Court as of this post). Today, June 30, his mother, Katherine Jackson, has been appointed as their temporary guardian. Hearings will be held on July 6 and August 3rd to determine if she'll become their permanent guardian.

Since this (to put it mildly) is getting a lot of media attention, here's the legal background:

A guardian is in charge of a minor's care and custody, which means their food, clothing, shelter, education and medical needs. A guardian has to be appointed by a court order -- it's a kind of custody order really, granting someone other than a parent legal authority over a minor's care. If there's an emergency, a court can grant a temporary guardianship quickly.

But between now and the hearings, Katherine Jackson will have to do her best to find and notify Deborah Rowe, the mother of Jackson's two eldest children (his youngest was born to a surrogate mother who presumably waived any parental rights as part of the surrogacy).  At the hearing, a judge will consider what would be in the best interest of Jackson's children. The notification of the children's mother is required in order to make sure that she has a chance to object to the guardianship at that hearing -- ordinarily, a parent has precedence over anyone else unless there are unusual circumstances, which abound here.

If Michael Jackson's will is found, and proved to be his valid last wishes, and the nominated guardian is not Katherine Jackson, the named person may contest the guardianship proceeding, too. But ultimately, it will be up to the judge to sort out the competing claims and decide what's best for the children.

It is reported that the petition also requested that Katherine Jackson be named the temporary guardian of the children's estate,  which means the person responsible for safeguarding Jackson's assets for the benefit of the children -- but this was rejected. AP also reports that Katherine Jackson has filed to be named the administrator of Jackson's estate -- the person who must inventory and appraise the estate's assets and manage them during what's likely to be a long and complicated probate proceeding.

To learn more about guardianships, see Nolo's Establishing and Maintaining a Guardianship FAQs.

June 23, 2009

No Income Limits on Roth IRA Conversions as of January 1, 2010

Part of the 2006 tax reconciliation bill is about to matter to many of us come January 1, 2010. It's sort of a good-news/bad-news deal -- but more good than bad for many. As of January 1, 2010, there will be no income limits for those who want to convert a traditional IRA to a Roth IRA. That's good because until that date, households with an adjusted gross income of more than $100,000 were barred from converting their IRAs to Roth IRAs and married spouses filing alone were barred regardless of their income.

Roth IRAs, for those of you in need of a quick review, are retirement savings accounts where you pay the income taxes due when you contribute to the account -- then, it grows virtually tax-free and your withdrawals are also tax-free (but you don't get the income tax deduction when you contribute the money).

So, for those of you whose traditional IRAs are now worth far less than they used to be worth (that's the bad news part), converting to a Roth IRA in 2010 could be a great idea: Since the account is now worth so much less, the taxes on the conversion will also be much less than they might have been, and if tax rates go up in the future, as many predict they will, you'll have already paid the taxes due on the account.

For a good article on the ins and outs of the new rules, see this article from the Wall Street Journal online.

To learn more about IRAs and other estate planning options, see The Mom's Guide to Wills & Estate Planning, by Liza Hanks (Nolo).

June 22, 2009

Fake Checks and Sucker Lists -- Scams

From the Wall Street Journal comes a tale of how an elderly, well-educated man fell victim to fraudsters who lured him into writing checks for a variety of scams. In less than one year, he'd sent out $23,000 worth of checks -- despite repeated efforts on the part of his family to get local law enforcement and others involved. Finally, the victim granted his son a power of attorney to manage his finances -- but even then, he kept writing checks for scams.

Scammers were extremely effective in gaining his trust, preying on his isolation to gain access to his confidential financial information. Worse, once he had gotten involved in a few of them, his name ended up on a "Sucker List" that was sold to other scammers, leading to an avalanche of other fraudulent offers.

One scam, in particular, has gained in popularity: a fake check, purporting to be an advance payment for winnings to come. The victim cashes the check, sends the cash to the scammer, and then is on the hook when the check bounces a few days later.

If your elderly relative is getting such calls and offers, here are some helpful tips from the article:

For more information on elder fraud and how to prevent it, see Long-Term Care, by Joseph Matthews (Nolo).

June 21, 2009

10 Things to Know Before You Hire a Financial Planner

Estate planning and financial planning often go hand in hand. It makes a lot of sense to pay attention to what you've got when you're planning how to leave it responsibly to those you love. But it's a jungle out there when it comes to figuring out how to get the help you need.

Self-help is a great option, of course. But for those who want a real-live person to sit down, review your finances, and either make suggestions on what to do better or take over  management of your assets, buyer beware. Financial planners are poorly regulated, poorly credentialed, and your remedies against a crooked one are few.

SmartMoney magazine has a great article on how to be an informed consumer. Here are some of the highlights:

  • Find out how long the planner's been practicing. Better yet, ask them if they've passed the CFP (Certified Financial Planner) exam -- that's an exam that only 56,000 planners have passed out of the 650,000 folks out there who say they are financial planners.
  • Notice if they are trying to give you advice or trying to sell you products. Stay away from those who are primarily selling products -- the odds are that they're steering you toward products that get them maximum compensation rather than those that will meet your needs best.
  • Ask them if they are preparing your financial plan or hire outside consultants to do so.
  • Find out how they are compensated. Are they fee-only or commission-based? It's not that one is necessarily better than another, but it's important to understand how they are being paid and to make sure that they will act in your, not their, best interests.
  • Check with the SEC to see if they have received any complaints about the planner.

To learn more about planning your finances, including finding a financial adviser, see The Busy Family's Guide to Money, by Sandra Block, Kathy Chu and John Waggoner (Nolo).

June 12, 2009

Long Term Care Insurance Part of Kennedy Health Plan Proposal

The AP reports that under Senator Kennedy's health care proposal, "Americans would be able to buy long-term care insurance from the government for $65 a month." People would enroll in the program during their working years. After five years of paying the premiums, they could receive benefits (worth not less than $50 per day) that would pay for a wide range of services designed to allow them to stay in their own homes and avoid moving into nursing homes.

The proposal is just one of many in the 651-page bill, which also includes changes to the way that health insurance is offered and taxed.

For a detailed guide to help you understand long-term care alternatives, see Long-Term Care: How to Plan & Pay for It, by Joseph Matthews (Nolo).

June 11, 2009

No Thanks, Dad -- Son Notifies Police of Stolen Art After Father's Death

NPR reports a story of interest to all of those who stand to inherit a collection of note from a parent. And it's a good reminder that you need to think about what you've inherited.

Collectibles dealer John Stasso amassed a large private collection worth millions, consisting of manuscripts, ancient books, artifacts, and antiquities that began with a trip to Italy in 1958. When his son, Joseph Sisto, realized that many of the artifacts had been illegally smuggled out of Italy, he confronted his father.  When Joseph found out that his father had died, he immediately called the police. Two hours later, the FBI arrived, along with specialists who will inspect and return the artifacts to Italy, many of which hadn't been seen for a very long time.

"It's a huge relief," said Joseph, "because as much as I love my... family, this will also help them... They won't have to live with the oppression of thinking they have stolen or smuggled goods... It's sort of like trying to own a Mona Lisa in your house, you know."

June 1, 2009

Washington Woman First to Die Under State's Death with Dignity Law

WA banner.jpgThe Seattle Times reported on May 23, 2009, that Linda Fleming, a 66-year-old Washington state resident, became the first to die under Washington's Death With Dignity Law, enacted last year. Diagnosed with terminal pancreatic cancer, she choose to end her life before the increasing pain of her disease took away her ability to have the state of mind she wished to have at the end of her life.

Family members, her beloved Chihuahua, Seri, and a physician were with her when she died, according to Compassion & Choices Washington, the organization that sponsored the measure, which was adopted by Washington voters in November.