Personal Finance: Ask the Experts

Are you a woman wanting to start or expand a small business? During October, the U.S. Small Business Administration is hosting a series of weekly, live web chats for women entrepreneurs.

The series, part of National Women's Small Business Month, features live Q&As with SBA experts who will offer women advice on how to assemble a business plan, find funding sources, learn about government contracting, obtain mentors and build a profitable business.

No registration is required but questions can be submitted in advance online. (Go to: www.sba.gov and look under "What's New")

Q: I'm concerned with the possibility that Congress may fail to act to put in place a rational 2013 estate tax law, instead letting the estate tax exclusion return to $1M per individual ($2M per couple). I'm responsible for managing my mother's estate plan. Her estate consists of $3.3M cash and $1.6M real estate. Her deceased husband's irrevocable trust will shelter $900K from estate tax. My plan is to gift assets such that her remaining assets total $1M cash with (hopefully!) no estate tax due at estate settlement.

How long would you wait on Congress to act before you went ahead with the proposed asset reallocation plan? -- Charles, Sacramento, CA

California is getting tougher with tax deadbeats, who could lose their driver's license or their working professional licenses if they owe more than $100,000 in unpaid taxes.

Under a new California law that went into effect this summer, both the state Franchise Tax Board and the state Board of Equalization are now required to send their lists of California's Top 500 delinquent taxpayers to state licensing agencies that could use the information to yank driver's licenses or professional licenses, anything from real estate agents to hair stylists to doctors.

The BOE sent its Top 500 list to licensing agencies in late August; the FTB will send its list in mid-October. Those on the list are also prohibited from entering into any contracts with state agencies.

Q: We recently started our son in private elementary school in the fifth grade. Do you know of any federal/state tax income tax benefit on the monthly tuition we are paying? Any way we can route the payments to get federal/state income tax benefits? I heard the term "School Voucher" but could not find much detail on it. Appreciate your thoughts or guidance on the subject. Thanks, Shevtank, San Diego, CA

Q: Ten years ago my wife and I bought a three-bedroom home. We're both in our late 30s and recently became unemployed. We owe $90,000 on the house and pay $900 per month, including insurance and taxes. We're thinking of refinancing to see if our monthly payment would be reduced. What is the refinance process? Is it better to pay insurance/taxes separately? Both of our parents are willing to co-sign if necessary since I'm not working. They have also offered to pay off the full amount then we pay them back with very low interest. Some other friends are in similar situations so any advice would definitely help us. Thank You. -- Martha, Sacramento

Q: I am a 53-year-old widow and mother of two. While I am bright, financial planning and taxes are new to me. I have enough money to see me through if I steward the money well. I would like to develop a financial, investment and tax plan but I think I need help. How do I find a competent professional to help me? What certifications should I be looking for? In the past I had free financial planning services from a wealth management company but found that the financial plan was centered around me investing money in the stock market through them. I discovered that I am too fearful of the stock market. I am however very comfortable with rental real estate. Any help in getting me a good adviser would be greatly appreciated. -- Lise, Lincoln

If you were a Money Mart payday loan customer, you could be due some money. As part of a $7.5 million settlement, the San Francisco Attorney's Office is looking for Money Mart customers who took out certain types of payday or installment loans between 2005 and 2007.

California consumers who took out the loans, sometimes called "Cash 'till Payday" or "CustomCash" loans, could be eligible for refunds of $20 to $1,800, depending on their claim. The refunds apply to the interest, fees and finance charges they paid, based on a settlement announced in July by SF City Attorney Dennis Herrera.

In a consumer protection lawsuit, Herrera accused Money Mart (and a related company called Loan Mart) of targeting low-income borrowers and charging "exorbitant and illegal" interest rates for payday loans and short-term installment loans.

If you think you're eligible for a refund, call the Money Mart hotline at (866) 497-5497 or fill out a claim form from the San Francisco Attorney's Office. The deadline to file a claim is Monday, October 1.

Q: Hi, I was divorced two or three years prior to the settlement of assets. The house was "inner spousal transferred" to me with an IRS lien attached with my ex's name only. I had always filed separately. He had a business and it stemmed from that, not in my name. I have talked with an IRS agent and was told it is not my debt. The lien was put on before the settlement. I have refinanced two times since the transfer took place. We are trying to take care of some settlement issues regarding his child support arrears and house money I owe him (house money I owe is from settlement). We would like to zero the two issues out so we don't owe each other but I do not want to be held liable for his liens. How do liens work when it is against an individual? I am at a loss. Please advise. Thank you Debi, Citrus Heights, CA

Q: I am a 56-year-old single woman. I lost my part-time $10/hr job which offered no health care. I'm losing my condo which I owned more than eight years, in two to three months, losing more than $65,000. I have three college degrees and more than 25 years of professional work experience. Since moving to Sacramento in 2012 I have been laid off three times and had to resign from a job in 2008 due to illness. I obtained a degree in paralegal studies in 2010. I researched the career opportunities in this field prior to enrolling in a local college program. I received a full scholarship and completed my degree in October 2010. Seven months later I obtained an internship which paid no salary. I was grateful to receive a $10.50 an hour job. I'd like some advice as I job search for the fourth time in 12 years. I am considering relocation back to Portland OR as its job market and economy are better. Your thoughts?? Daisy- Sacramento, CA

Q: What are the requirements for getting approved for job training under unemployment benefits? How long is someone eligible after starting to receive unemployment payments? Thank you. Nicki - Grass Valley, CA

Q: My husband and I have an online savings account which does not allow titling in the name of a Trust. However they do allow naming the Trust as the beneficiary. If we were to name the Trust as the beneficiary, what happens when the first one passes? Does the surviving spouse become the owner of the account with complete access to its monies or is the account frozen until the surviving spouse passes? --Confused, Sacramento, CA

Heads up, drivers. Starting in January, when you get pulled over and have to show an officer proof of auto insurance, you can flash your phone.

Under a bill signed recently by Gov. Jerry Brown, California is one of seven states that allow consumers to use their smartphone or other mobile device to show they've got insurance. That means no more fumbling around in your glove compartment to find your paper copy.

Instead, insurers now have the option of providing consumers with electronic proof of coverage: via email or an app for mobile devices. The paperless option is voluntary, both for insurance companies and individuals.

Q: My wife and I have a spousal trust. When one spouse dies, is it required to change the name of the trust to the surviving spouse and also the names on property and accounts held in the trust? -- Jack, CA

Q: My son is on SSI for a mental illness. He is going to have settlement on a lawsuit soon. I understand that in order for him to protect his SSI this settlement must go into a first party trust. Is there any alternative and, if not, can you recommend how I go about setting this up? Thank you. --Lisa, Sacramento, CA

Q. My wife and I are 53 and 56 and have been saving and investing in our company 401k plan for over 20 years. My wife will get a small pension but for the most part we will have to use our savings during retirement. We hope to pay our mortgage off in a few years and both potentially retire in eight years.

We only have a few years to work and want to make sure accounts are growing and getting good returns while we're preparing to retire. What are our options to find a manager if most of our money is in our 401k but we don't want our company to manage our investments anymore? Is it advisable to move our money to an investment firm this late in our lives? What are the advantages of moving our money? (FYI my wife's account is with PERS and mine is with Fidelity.) Thanks -- M. Chin, Sacramento, CA

In a recent Sunday column, we talked about how to protect yourself against online I.D. theft.

Several readers emailed us, asking for more details on how to protect their mobile phones. They're wise to ask: Most people don't even realize their mobile phones can be just as vulnerable as their home computer, said Robert Siciliano, online computer security expert with McAfee. "There are thousands of viruses targeting mobile phones and millions targeting PCs," he noted in an email.

Siciliano said the best defense: Getting regular security updates to your mobile phone's operating system. These so-called "security patches" are issued by manufacturers to thwart the bad guys.

Q: My 94-year-old Dad now lives with my sister, his home sits empty and his total estate is over $1M by a few hundred thousand. The trust divides his assets equally between four children. My question is: if Congress does not make a move to keep the amount at $5M, would the estate tax be on the entire amount, or the amount over $1M? Second question: Is there any way to reduce this amount below the $1M if they don't? Third question: Can my sister (Trustee) gift each of us the maximum $13,000 annually without paying gift taxes? Since Mom is deceased, can he gift to husband and wife separately or just one gift of $13,000? Please help. -- Sherry, Rancho Murieta, CA

Q: What is the very basic information needed in a Trust and Will so they won't go into probate court? We have a will and a trust (a large binder full of extraneous legalese that was done for us 15 years ago for $1,750). I don't want to throw away anything until I know exactly what I should keep. I just want to simplify everything for our two sons. Our lawyer was of no help. Thanks. -- June, Cameron Park, CA

Q: I had a hardship withdrawal from my 401(k) in 2012 to pay for my mortgage. I did not pre-pay any tax or penalty. I understand that when I file my 2012 tax return, I have to pay tax and penalty on the amount I withdrew. However, I can imagine that it is a rather hefty amount and I may not have enough money to pay it. What are my option(s)? -- Thank you, Elk Grove

Q. When looking for a bond, at what point should you be concerned with interest rates? How much do interest rates affect bond prices? Thanks! Blake - Rocklin, CA

If you hadn't noticed, it's officially National College Savings Month. The California treasurer is hosting events to get the word out to parents and grandparents about ScholarShare, California's 529 Plan for college savings.

ScholarShare informational booths will be open at events from Sausalito to San Diego, including these in Sacramento:

Sunday: Grandparents Day at Fairytale Town

Wednesday: Wellness Awareness Expo, Dept. of Motor Vehicles office, 2570 24th St.

Sept. 29-30: ScholarShare Children's Book Festival, Fairytale Town

Here's feedback that I received from a reader, a community bank official in New York, who was responding to an Aug. 30 Q&A that I posted. The question asked how a successor trustee knows what to do in a trust administration, and whether hiring an attorney was the only option. In my answer, I discussed my view that working with an experienced lawyer makes the process go much more smoothly for the trustee. Tim offers another approach, below.

Q: My son is 36, a UCSC grad in philosophy, with no substantial work history (recent stints as a merchandiser, landscaper, fundraiser for a non-profit) now trying to pursue a decent job. I am encouraging him to enroll in a certificate program such as legal aide, pharmacy tech, EKG tech, etc. Do these programs have good results as far as employment when completed? He really does not know where to turn. Any advice would be greatly appreciated. He currently lives in San Francisco, but may return to Sacramento to live with us while pursuing something. Thank you. Diane - Citrus Heights, CA

My Sunday column on preventing online identity theft offered tips from cyber-security experts. Here three more tips, including one from a reader.

1) Column reader Curtis Carroll, a map company sales manager in West Sacramento, recommends getting a "security freeze" on your credit files. He's had them for about 10 years with each of the three credit reporting bureaus (Experian, TransUnion and Equifax). To him, it's peace of mind. "If I lose my wallet, I have to replace my credit cards and driver's license. But I don't have to worry that someone is trying to open accounts in my name," Carroll said.

With a security freeze, if someone tries to use your name to open an account, the access to your credit files is denied. If you're applying for a job, car loan, mortgage or anything else requiring a credit check, you can have the security freeze temporarily lifted.

Q: My brother's wife has a moderate Alzheimer's condition and is totally unable to handle any financial transactions. He also is in poor health and fears if he has a stroke, etc. he will be unable to control any of their financial transactions. Would a "finanancial directive" purchased at a stationery store giving me power of attorney as executor be legal or would it be better for him to do a living trust or will? My brother has a large estate and numerous CDs. What is the reality if he has a stroke or heart attack and both of them are unable to process any financial transactions? Thank you. -- Dave, West Sacramento

Q: My house is about $25,000 under water and I cannot refinance because I have already taken advantage of a government-assisted loan. To pay off my mortgage early, I am making one extra payment a year so my son can have a place to live when I die (I am 71). I have a 30-year loan and still have about 24 years to go. Is it a good idea to make an extra payment when your house is underwater? -- Marge, Sacramento

Q: For a wedding gift, I would like to provide my daughter and her fiance with a nest egg of about $10,000. They are both 30, college-educated, with modest combined earnings of about $50,000. They have no debt and plan to have children in about three years. They are responsible about money, but have no investment experience. What form would you recommend the nest egg take? CDs? A seeded mutual fund investment account? Other? -- Antoinette, Davis

Q: After 30 years, I am looking forward to my retirement in April 2013. Through the years, I have contributed to a 401k, and it is currently sitting near $70,000. I plan to stop my contributions to the 401k after I retire, but I am not sure if I should leave the money in the account, or would it be better to pull it out and place it elsewhere? With the current economic conditions, I am very worried if my money will be safe in the 401k. I am not looking to make any money on this, just want it to be in the most secure place I can find in these uncertain times. I greatly appreciate any help you can offer me. --- Jim, Roseville