Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

October 30, 2012
Any problem with leaving our home to one beneficiary?

Q: This concerns leaving our home to a relative. My wife and I have a revocable trust and our home will be part of our distributed assets. In order to simplify the executor's task, can we designate the house and belongings to a single beneficiary rather than selling the property? The home is paid for, but would it be prudent to discuss this action with the beneficiary in question? Thank you. --Rob, Elk Grove, CA

October 30, 2012
Have I made a gift to my great-grandchildren too difficult?

Q: I think that I made a mistake on my second amendment to declaration of living trust. I wrote that both my antique vehicle & car would be sold & the proceeds shall be divided equally among my then living great-grandchildren & be held in trust until each attains age 25. I am 84, have 9 great-grandchildren at this time. Ages 14, 11, 5, 4, 3, 2, 2, 6 months, and 6 months. I feel that with the small amount of funds, the work involved would not be worth it. Do you have any suggestions? Many thanks! --Bill, Elk Grove, CA

October 30, 2012
Medicare helpline offers advice for Sacramento region seniors

As we noted in Sunday's personal finance column, the Medicare clock is ticking.

That's because seniors 65 and older (and younger Medicare recipients who qualify due to disabilities) have about a month left - until December 7 - to choose their healthcare coverage for 2013.

As anyone who's tried it knows, sorting out your Medicare choices can be very confusing. "Very bright people are struggling with the decisions they have to make," said Margaret Reilly, a regional program manager for the Health Insurance Counseling & Advocacy Program, a state-sponsored free counseling service.

This year, some Medicare plans are changing premiums or adjusting prescription coverages and some are leaving the local area altogether. That's why Reilly is urging anyone with Medicare questions to contact HICAP's local office in West Sacramento, which serves nine counties: El Dorado, Nevada, Placer, Sacramento, San Joaquin, Sierra, Sutter, Yolo and Yuba.

Volunteer counselors are available weekdays to answer your questions. To contact the local HICAP office, go online or call (916) 376-8915. The office is located at 3950 Industrial Blvd. in West Sacramento; hours are weekdays 9 a.m. to 4 p.m. (closed from noon to 1:30 p.m.)

To locate HICAP offices in other counties, go online or call (800) 434-0222.

October 22, 2012
Have complaints about credit reports? Feds want to hear it

Starting today, if you've got a gripe about mistakes on your credit reports, the federal financial protection bureau wants to hear about it.

"Consumers need an avenue of recourse when they feel they have been wronged," said Richard Cordray, director of the Consumer Financial Protection Bureau, in a statement.

But don't rush to the CFPB first. Consumers should initially file a complaint with the credit reporting bureau - typically, Experian, Equifax or TransUnion - where they spotted the error.

Once you've done that, the CFPB wants to hear from you. You can file a complaint if you're unhappy due to:
--incorrect information on a credit report;
--a credit bureau's handling of your situation;
--improper use of a credit report;
--inability to get a copy of a credit score or file;
--problems with credit monitoring or identity theft protection services.

October 16, 2012
Can I pay back taxes in monthly installments?

Q. I currently owe federal taxes in the amount of $12,200 and California state of $11,000. I understand and have contacted three companies that say they can help me, but I have to pay them $3,000 to $5,000. The IRS is taking over $1,500 out of my retirement and I am having problems taking care of my bills. Do you know of any company that will let you pay monthly payments? I don't work but get Social Security and military retirement. I would appreciate whatever help you can give me. Thank you! Phil, Citrus Heights

October 16, 2012
Do heirs pay tax on sale of inherited residence?

Q. My mother-in-law put her home in a family revocable trust fund. She took out a reverse mortgage to pay for home health aide. She passed away in 2010. The trust fund became Irrevocable upon her death. We couldn't sell the house, so all five siblings paid off the reverse mortgage (checks were written to the family trust fund). The house was appraised at $300,000 when reverse mortgage was taken out six months before her death. It has now appraised for $279,000. If/when the house sells, do the heirs pay capital gains tax on all the money that is distributed? Or, does each sibling get to deduct the amount that was paid toward the reverse mortgage first? Cathy, Roseville, CA

October 12, 2012
Insurers to pay Californians $28M in overdue death benefits

Two more life insurance companies will shell out $28 million to Californians in unpaid death and funeral benefits, under agreements announced this week by the state controller's office.

Forethought Financial Group Inc., an Indianapolis company that sells end-of-life policies through funeral homes, agreed to pay $25 million, as well as change some of its business practices. Nationwide Insurance Co. will return about $3 million in life insurance benefits. Under earlier agreements, the Columbus, Ohio-based company has already paid more than $12.5 million in unclaimed insurance monies to some 480 Californians.

These mark the fifth settlements since 2008, when California launched ongoing audits of life insurance companies and their payouts.

October 12, 2012
Can an employer ask if I ever sued my former employer?

Q: A former employer in the financial services industry had a class action lawsuit filed against them for some questionable "tweaks" to our compensation plan. I was not involved in the filing of the lawsuit. I simply received a notice in the mail explaining what was happening and that I was eligible to participate in the lawsuit against the company. The litigation was successful and I received approximately $10,000.

When completing an application for a new prospective employer and I am asked "Have you ever filed a lawsuit against a former employer?" do I have to respond "yes," or can my response be "no" since I did not initiate the litigation? I am just trying to prevent any surprises during the background check.

Any help or guidance regarding this question would be very much appreciated. Calvin, Carmichael, CA

October 11, 2012
Should an adult child be named on a parents' bank account?

Q. I would like a professional's opinion on the pros/cons of adding an adult child's name to an elderly parent's bank accounts. I have heard conflicting opinions from friends and relatives. My belief is that it is a good thing to do and helps tremendously when the time comes to settle the estate. True? -- Tami, Sacramento

October 11, 2012
State updates list of Top 500 delinquent taxpayers

Look out, deadbeat taxpayers.

Last month, it was the state Board of Equalization. Now the Franchise Tax Board has released its updated list of its Top 500 tax delinquents: those who owe at least $100,000 in unpaid income taxes. The list includes both individuals and corporations.

On the personal side, the offenders range from Halsey Minor, the Bay Area-based creator of technology news website CNET, who the state says owes $10.7 million in taxes, to Daniel Harralson, a horse racing owner in Clovis, who is listed as owing $140,000.

Those listed as corporations include Sacramento attorney Roxanne T. Daneri, who the FTB says owes $336,000, and D&P Products Inc., whose tax bill is listed at $258,000.

And under new state legislation, every name on the Top 500 list is turned over to state licensing agencies, who have the option of canceling or not renewing their professional and occupational licenses. Those listed also risk losing their driver's license and cannot enter into any state contracts.

It's part of the state's continuing effort to close California's $10 billion so-called "tax gap," the difference between what's owed and what hasn't been coughed up by taxpayers.

The state BOE released its updated list of those owing back sales and use taxes in September.

October 10, 2012
Golden 1 offers free shredding of financial paperwork

Got personal papers you want shredded? Golden 1 Credit Union is hosting a free community shredding event on Saturday, from 8 a.m. to 2 p.m.

It will be held at Golden 1's operations center, 8945 Cal Center Drive in Sacramento, near the corner of Watt Avenue and Folsom Boulevard.

Golden 1 hosts the twice-a-year shredding events to help consumers avoid identity theft by destroying documents that contain sensitive information, such as Social Security numbers, financial account numbers and medical or legal information. In addition to paper, DVDs, CDs and floppy disks will be accepted. Consumers can drive up and drop off up to five file-size boxes, which will be shredded while you watch.

October 9, 2012
Should I sell Grandma's vacant house now or after her death?

Q: I have power of attorney for my 96-year-old great grandma who is suffering from dementia and is no longer able to live in her home. She has a vacant home in Bakersfield. I am wondering if I should leave the home vacant until she passes or would there be benefits to selling it while she is still alive? -- Linda, Fair Oaks, CA

October 9, 2012
Can we buy out our sister's share of Mom and Dad's house?

Q: My parents passed away recently, in December 2011 and July 29, 2012. There are three daughters; my two sisters and I are to divide everything equally, according to the living trust. Our middle sister is the trustee.

Much to our surprise she wants to make all the decisions without our consent. She insists that we sell the house on 2 1/2 acres. The attorneys had us have the house assessed and it is well below what we thought it was worth. My other sister and I would like to rent it out until the market is up. I know we can buy her out, but what determines the price?

Does the house then come out of the trust? Does that involve a lot of legal problems? My parents also owned property in Nevada. Would we be better off just liquidating everything as opposed to waiting for a better market?

It has been two months to the day that my dad died. Do we get a grace period before we have to decide? My sister, the trustee, says we have to decide by November 1, which seems too soon, as we are still grieving our parents. Thank you for any consideration you can give. -- Linda, Rocklin, CA

October 9, 2012
Will a probate be required for this estate?

Q: We have started to look after my husband's elderly aunt, who is not a family favorite. She is not in the best of health and has no children or husband. She has a handwritten will and has given her sister (my husband's mother) 50 percent and us the other 50 percent (probably due to the fact that we've been helping her).

We didn't really think too much about it because we suspected there really wasn't much money involved - probably just enough to pay her bills. But we've learned recently that the amount is more like $150,000 with at least half in a CD and the rest in stock funds. There is no real estate.

The will does not name someone to execute the will. We plan on dividing our half with my husband's brothers and sisters who can use the money, no matter how small.
Will there be probate required or can we handle this ourselves? -- Kris, Folsom, CA

October 7, 2012
Did Social Security pull the rug out from some early retirees?

Q: My brother applied for Social Security retirement benefits early and started receiving benefits in February 2009 (at age 65). His decision was based on his cash flow at the time and the understanding that he could rescind his application and re-apply for benefits at age 70 (paying back all the retirement benefits he'd been paid to that point), thereby maximizing his monthly benefit check (he expects to live forever).

Recently he checked the Social Security website and discovered that a change in 2010 limits the time in which to rescind an application for benefits to 12 months from the date of the first benefit payment.

He feels screwed. He made his decision to start drawing Social Security benefits based on the fact that he could rescind his application and re-apply at age 70. Had he known that he would be prevented from doing that, he wouldn't have started taking the benefits in the first place. He believes that a notice of the change should have been sent to all those under the age of 70 who were currently receiving Social Security retirement benefits. That would have enabled anyone who wanted to to rescind his or her application.

Since both my brother (and thousands of others, no doubt) acted in good faith based upon an existing regulation, he feels that those in his situation should be "grandfathered in" (ie. sent a notice and allowed to rescind their original application within a reasonable period of time). Is this being considered? Is it likely to happen?
-- Larry, Elk Grove

October 5, 2012
K-12 students: Win prizes in money-saving video/photo contest

Calling kids and teens: Your money-saving photos or videos could win prizes in two new nationwide contests announced this week. Here are details:

"Lights, Camera, Save!" is a video contest for teens ages 13-18, sponsored by the American Bankers Association and participating banks. Teens can submit rap songs, puppet shows, parodies or other 90-second videos that illustrate the importance of savings or using money wisely.

Three national winners will get $3,000, $1,500 or $500 toward their savings goals, with similar matching gifts to their schools. The winning videos will be posted on YouTube as part of a national savings campaign.

For entries, teens can contact their local participating bank; in the Sacramento area, that's U.S. Bank or Golden Pacific Bank. Entries can be submitted Nov. 1-30.

October 4, 2012
Staying safe online: readers share their tips

In a recent column on how to avoid getting hacked online, we talked with several cyber-security experts.

Since then, we've also heard from readers, who shared their own tips. Here are a few:

One of the column's recommendations was to use strong online passwords, at least 8 characters long, with a mix of letters and numerals. But a New Mexico reader, Chuck Denk, suggested that might not be enough. He suggests that passwords should be longer: 12 characters. According to a Georgia Tech Research Institute study, sophisticated software is making it easier for hackers to break into your accounts by rapidly trying various 8-character combinations.

Denk also recommends Last, a free password manager for Windows, Mac, Linux, iPhone, Blackberry, Android

Another reader, Robert Ilgen of Concord, noted the column's advice from a McAfee security expert: "Don't click links in the body of an email. Ever."

"Good advice," said Ilgen, "but that takes the fun out of seeing what your friends send you. Would it make sense to Google the sites that our friends send so that we can see if the sites are safe?"

October 4, 2012
How should I protect my money from inflation?

Q: Inflation has been quite low the last several years and many people do not recall the 10%+ inflation during the Nixon/Ford/Carter administrations. If I believe inflation were to rise significantly and be persistent in the future, then where should I invest my cash? CD's, bonds, certain classes of equities, natural resources & commodities, real estate or other types of investment vehicles? Thanks
Mike - El Dorado Hills, CA

October 4, 2012
Are trust deed investments as good as they seem?

Q: With savings interest rates at practically zero percent, I have been looking at the idea of Trust Deed Investing. I have located multiple Brokers and direct lending opportunities, which would pay 7%-8% and is secured by a house in Sacramento. If I invest through my IRA, the interest is tax deferred. With the real estate market having bottomed out in Sacramento, I feel good about the security behind this type of loan.

Do you feel this is a good investment vehicle to consider in these times?
Brent - Folsom

October 3, 2012
40 California kids win college savings accounts

Read a book: Earn $529 toward college savings.

That's the winning math for some 40 California kids, who each won $529 toward their college savings, the state Treasurer's Office announced this week.

Among local winners of the "Think Big! Save for College!" contest were: Jonathan Shedd, El Dorado Hills; Xandei Souders, West Sacramento; Oscar Galvin, Sacramento; and Cody Chavez-Russ, Marysville.

The winners, ages 3 to 14, were selected at random from among 3,600 entries statewide.

Sponsored by ScholarShare, California's 529 college savings plan, the summer reading contest allowed parents to submit entries online or at their public library. If a winning entry was submitted at a local public library, the library received a matching $529 check.

October 1, 2012
How can I reduce my taxes on the sale of a rental property?

Q: I own a home in Oregon which has been used as a rental since 2003. A year ago I purchased a home in Sacramento. I have lost my job and I am considering selling the Oregon home and using the proceeds of the sale (approx. $200,000) to pay off my mortgage here in Sacramento. I understand that these proceeds will be treated as a taxable gain. What would my estimated tax to be paid on the investment be? Is there any way to reduce the taxes paid?
-- William, Sacramento

October 1, 2012
Surviving the recession: How do we get back on financial track?

Q: I'm wondering if you have any recommended resources for families who are trying to put their financial lives back together after the recession. We didn't lose our house, we didn't completely lose our jobs, we still have health care, cars, children in sports, etc.
However, we did this by hanging on for dear life, and obviously we made mistakes. We thought if we worked hard and cut back on "wants" vs. "needs" we would get through this and then catch up. But now the cars are old and falling apart, the house is a fixer-upper that can't get fixed up and is worth half of what we paid for it. Our credit score is still OK, but the balances on our cards are so high that we don't know how to pay them down.

One of us is employed full-time but there have been little or no raises or COLA in 5 years. One of us is part-time, but has taken repeated reductions in work, and will probably be down to just a few hours a week when the tax hikes don't pass. Full-time jobs are not available right now, or don't pay enough to cover childcare. Food is more expensive, medical costs are through the roof, and student loans just break even because we only pay $500 per month on them.

We never thought it would last this long. We won't be able to "get by" for much longer. I know there must be ways to get advice, but I can't find it.
Any ideas?
I WAS in the Middle Class, Sacramento

October 1, 2012
Today is California's 'Plan Your Giving' Day

Bill Gates and Warren Buffett started it. But the effort to convince America's billionaires to donate half their wealth to charitable causes after they're gone has trickled down.

Spurred by a group of volunteers in Sacramento, the state Legislature designated today, October 1, as California's "Plan Your Giving" Day, when everyday residents are asked to consider setting aside money in their wills or trusts to causes they believe in, whether it's SPCA or cancer research or kids.

No one is asked to give up a dime now; it's all about planning ahead to leave a little something to charity. In Sunday's business section, we'll be talking with folks who've done just that, as well as other efforts to encourage financial giving.

Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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