Author Archives: Kathy Lane

2013 Federal Estate Tax

American Taxpayers Relief Act.

FINALLY! The first temporary rules were passed by Congress in 2001. Twelve years later and two major tax changes in between, it appears we FINALLY have permanent estate tax rules. Software companies, estate lawyers and financial planners should all be breathing easier after Congress passed the American Taxpayers Relief Act.

Here’s a brief summary of the federal estate tax laws included in the Act. The only change from the current federal estate tax rules that went into effect in 2011 is an increase in the tax rate.

1. The federal estate tax exemption allowance stays at $5 million.

2. Portability stays. Portability gives married couples the ability to exempt $10 million of assets from any federal estate taxes by filing a Deceased Spouse Unused Exemption Allowance form when the first spouse dies.

3. The estate tax rate on estates exceeding the $5 million estate tax exemption allowance will be 40%, a change from the current 35% tax rate.

Have you collected the Social Security benefits to which you may be entitled?

You worked hard your whole life and paid money into the Social Security program evey month. So did your spouse. And now that you are both retired, you are relaxing, enjoying life and collecting a benefit check every month.

But Social Security benefits are not just for retirement. They are for widows and widowers, too. That’s right. Some of the money you paid into Social Security during your working life goes to survivor’s insurance from which you may one day be entitled to collect benefits. The amount of those benefits is based on lifetime earnings.

It is important to know that the surviving spouse is not the only one who can collect benefits. Surviving minor or disabled children are eligible as well.

Diesmart has received questions from widows and widowers who want to be sure they have collected all of the pension benefits to which they are entitled. However, they usually either forget or don’t know that they are leaving money on the table when they don’t file for Social Security survivor benefits as well.

Don’t forget to contact the Social Security administration to find out what steps you need to take to collect benefits to which you are entitled. www.ssa.gov/survivorplan/ifyou.htm

For more information about death benefits, go to www.diesmart.com.

Can you listen to music after you’re dead?

If a deceased loved one was a music lover and you’d like to treat that person to an eternity of music (and we don’t mean from heavenly harps), now you supposedly can.

A company in Sweden, Pause, just released a new product called the CataCoffin and its CataCombo Sound System. It’s a $30,000 coffin that delivers “godlike comfort and heavenly sound”. The luxurious coffin includes “a revolutionary customized sound system for audiophiles on the other side”. You can customize playlists and let the music play for as long as you want.

How do you do this? A special tombstone above ground displays the playlists that can be customized by the deceased’s loved ones.

The commercial promoting the CataCoffin is a little eerie but you can judge for yourself. It will give you a good idea about the quality of the coffin and how the sound system works.

Pause company CEO, Fredrik Hjelmquist, owns the first manufactured model and says customers should feel free to add track to his playlist “Pause-4-ever”. If you’re in Stockholm, he invites you to head down to the Pause store at Norrlandsgatan 14 to see it for yourself.

Is this a real product? Supposedly it is.

For more information about coffins and other topics related to planning a funeral, go to www.diesmart.com.

What is the responsibility of a trustee?

When creating a trust managing family affairs, many of us designate a family member to serve as the trustee. A surviving spouse. The eldest child. In many cases, a family member does this job without compensation.

If you have agreed to serve as a trustee, you may not really know what you just agreed to do. You might even assume there is no legal risk in agreeing to serve as a trustee.

It’s not easy to find articles describing the job of a trustee that is not filled with legalese. This articled titled “A Novice Trustee Primer” does a great job of describing the responsibilities of a trustee and is is recommended reading if you have a trust, are thinking about setting up a trustee, or if you have agreed to serve as a trustee.

Do your frequent flier miles live on after you’re gone?

The New York Times recently did research to find out and the answer was far from consistent.

Only two airlines contacted have a specific, written policy that allows your miles to be transferred to a surviving family member – American and US Air. On the American Airlines site, in the section titled “Earning AAdvantage Miles”, they outline their specific policy. US Air states their policy under General Terms and Conditions.

One airline, JetBlue, said that they don’t have a specific policy but, after receiving a death certificate and other documentation, will transfer the miles to a beneficiary.

Southwest Airlines has a specific policy – it does not allow transfer of any miles after the death of a RapidRewards member.

Delta’s policy is to not transfer miles. However, upon request of a SkyMiles member’s surviving family member, they may make an exception and move the miles to their account.

United also said their policy is that miles are not transferable upon death. However, MileagePlus evidently has a form that can be completed to request transfer of miles from a deceased member’s account to that of a beneficiary. Along with the completed form, a copy of the death certificate and a $75 fee must be submitted.

If you have a lot of unused frequent flier miles, you might want to specifically bequeath them in your will. However, the airline holding them is still not legally required to give them to the beneficiary of it is against their company policy.

What’s the easiest thing to do? Make sure your frequent flier miles are on an airline that will allow your family to inherit them or start travelling more now, using up that bank of valuable miles while you can.

For more information about what happens to your assets when you’re no longer around, go to www.diesmart.com.