All posts by tfsammons

You should be able to count your accounts on one hand

Estate Planning

This NY Times article says that it’s important to consolidate accounts. Ideally, you should have no more than 5 accounts. Too many clients bring in long lists of assets and many don’t know what assets they have (often include CDs in banks all the way from Chicago to Crystal Lake).

Consolidation of accounts into the following pattern is ideal:  One IRA, One 401k, One non-IRA brokerage account and a checking account. This makes management of the accounts easier. With fewer accounts, titling all of the assets into a living trust is easy. And  your successor trustee will thank you when he or she  has to take over.

Cook Co. Homeowner's & Senior exemption forms are here

Real Estate-Purchases

The Cook County Assessor just put on its website the forms needed to apply for the 2007 homeowner’s exemption, senior exemption and senior freeze (max. income $50,000.00).

The homeowner’s exemption form must be completed by anyone who purchased a house in 2007 or thereafter. Once you file the homeowner’s exemption form, you should not have to do it again. The senior exemption and senior freeze must be filed each year.

Click here to fill out the forms online.

Click here to download and print the forms as a pdf.

What the candidates think about inheritance tax

Estate Planning

The presidential candidates have the following views on the estate tax (inheritance tax):

Democrats

Hillary Clinton- $3.5 million exclusion amount per person, but keep the tax

Barack Obama – wants to keep the tax and to put the exclusion high enough so no family business has to be sold to pay the tax. No specific amount mentioned.

Republicans

Mitt Romney – Eliminate the tax

John McCain – $10 million exclusion, but keep the tax

Greatest veteran's program that no one knows about…

Elder Law, Estate Planning

Twice in the last few months, I’ve run across an amazing program that makes monthly payments to veterans who are disabled or having trouble living on their own. The name of the program is the VA Aid and Attendance Program.

Here’s what it does:

  • Pays $1744 per month to a veteran or $945 to a surviving spouse of a veteran to assist in bathing, meals, medication monitoring and other activities of daily living.
  • Applies to individuals who live in assisted living, at home, skilled nursing facilities or in-home care

What it takes to qualify

  • Must qualify medically and financially
  • Assets can’t exceed $80,000 (home, vehicle, annuities, pre-paid funeral and other things are not included in this number)
  • Takes 3-6 months to get approval.
  • Pays retroactively to date of application.
  • Applies to any veteran with 90 days of service

Here is how to apply.

 

Flat screen sells the condo

Real Estate-Purchases

I did a closing of a Chicago condo this week. The developer offered a flat screen television to the buyer AND another one to the buyer’s agent as an incentive to buy the condo. The price limit was $1200 on the televisions. The developer reported that sales picked up nicely when the televisions were thrown in. Both client and agent were quite satisfied too.

Real estate slowdown

Real Estate-Sales

Here are the unhappy totals for real estate sales for Cook County single-family homes for May 2007 compared to last year:

May 2007     2786 houses sold
May 2006     4690 houses sold

This is a steep drop of almost 50%. The strange thing is that it was already slowing down in May 2006. We don’t see anyone talking about "flipping" houses anymore (or even buying and rehabbing them). The only ones really busy are the foreclosure attorneys.

Cautionary tale: Cook Co; Deeds to Living Trusts & Real Estate Tax

Estate Planning, Living Trusts

When a client sets up a living trust, we often record a new deed to their home transferring it to their living trust. In the past this caused no problem with the homeowner’s exemption on the real estate tax bill. Now it does cause a problem.

Background: The homeowner’s exemption is available only on your primary residence and reduces the tax bill by about $400.00. Many will remember, years ago, the infamous "postcard" that had to be completed each year and mailed back to the assessor in order to keep the exemption. A few years ago, the assessor wisely ditched the postcard. So once you had your  homeowner’s exemption you were all set and didn’t have to do anything annually or otherwise to maintain the exemption. (FYI- No other county requires any actions to maintain a homeowner’s exemption–you just get it.)

Recently, the Cook Co. Assessor’s office, in an apparent sleazy, revenue grab decided to require that homeowner’s who deeded their properties to living trusts (really it applies to any title transfer, not just deeds to living trusts, including a quitclaim deed in a divorce, a deed to a land trust or just changing titleholders) need to reapply for the homeowner’s exemption, or they will lose the exemption.

This is a very strange move. They do mail a notice to the homeowner (who transferred title to the trust) to reapply. Realistically, how many will read this? I think they know that many will ignore the notice.

This is a joke and the assessor’s policy needs to be changed immediately. I have heard that some attorneys have filed suit to reverse this unwise policy.

This seems to apply to transfers made during 2006 only. If you put your house in a living trust before 2006, you have nothing to worry about. If you transferred your house to a trust in 2006 or 2007 watch for the  notice from the assessor’s office. You can reapply for the exemption online. Here is the site to reapply for the homeowner’s exemption.