Personal Finance: Ask the Experts

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

November 28, 2012
Can my stepmother's trust pay for her rest home costs?

Q: My father remarried after my mom died. His new wife has a trust set up with the investments from her prior husband. She and her 3 children are on this trust. She receives dividends, about 2k a month to live on, which she and my dad use for house expenses, etc. He just has Social Security. If she goes into a rest home (advanced dementia), can this trust help out with these costs so my dad does not have to sell his home? Thank you. --Dede, Sacramento, CA

November 27, 2012
It's 'Giving Tuesday': A day for donating, not spending

If Thanksgiving was about giving gratitude, today is about giving back. It's so-called "GivingTuesday", a new nationwide campaign to encourage more giving - in time, money or services - to charitable causes this holiday season.

On the heels of Black Friday/Cyber Monday's devotion to spending money, "GivingTuesday" invites families, businesses and individuals to do more giving.

As the website puts it: "We have a day for giving thanks. We have two (days) for getting deals. ... Wouldn't it be great to have a day for giving back?"

The first-ever effort involves major sponsors like Microsoft and United Way, as well as some 2,000 participating local organizations, ranging from animal care to health issues (diabetes, Alzheimer's, etc.) to education to environmental causes.

Among the Sacramento-based groups taking part: California ReLeaf, First Tee of Sacramento, Red Rover (animal crisis care), Sierra Service Project and Women's Empowerment.

November 27, 2012
Can one sibling re-fi a house co-owned by other siblings?

Q: Several years before my mother passed away in 2010, she added the names of all her six kids to the deed. The oldest sibling is executor and I am secondary. The first loan is in (Mom's) name only. She is on the second deed as well as myself. One sibling lives in the house and would like to refinance both loans but her name is on neither loan. Does she need permission from all the others to refinance, or can either the other sibling or myself give permission if needed? The bank can't seem to give the same answer. Also, what is the difference between a "trustee" and "executor"? And is being the executor the same as having power of attorney for someone? Thank you. --Cora, El Dorado Hills

November 26, 2012
Cyber Monday: Beware of online shopping scams

It's Cyber-Monday, the traditional kickoff to online holiday shopping. It's also a day to be smart about avoiding online shopping scams. Here are some tips from consumer groups and online safety companies:

1) Make sure the website address starts with an https, not http, says McAfee security expert Robert Siciliano in a recent blog. The letter "s" indicates encryption is being used to protect your information.

2) Check the site's URL. Be sure it's, not Scammers sometimes change a single letter to lure you to a fake site.

3) Don't make online purchases from your laptop using a public WiFi connection, such as in a coffee shop. Hackers in public locations can tap into your computer to steal information or cause havoc.

4) Use a credit card. You'll have better protection and an easier time disputing any fraudulent charges. Print your online shopping receipts and check them against your credit card's monthly statements.

5) Beware of Facebook and other social media scams, especially when checking in via your mobile phone, says the National Consumers League. Be wary of clicking on holiday deals, gifts, giveaways and promotions that may pop up on your phone.

November 23, 2012
Holiday shoppers: You may owe "use tax" to BOE

Attention, holiday shoppers: The state Board of Equalization is reminding Californians that they may owe "use tax" on their online or out-of-state purchases.
Generally, use tax is owed when you buy something from a business - a mail order catalog, an online retailer, a TV shopping network - that's located outside California but doesn't charge you tax.

Under a new state law, out-of-state sellers must collect the tax if they make more than $1 million in annual sales to California consumers. But "even under this new law, most major out-of-state online retailers, like L.L. Bean and, are not required to collect sales tax as long as they don't have a presence in California," added Runner.

The new law, which became effective September 15, requires out-of-state sellers to collect tax if they make more than $1 million in annual sales to California consumers and at least $10,000 of those sales come through referrals from California-based affiliates.

The average California family owes about $61 in use tax each year, according to the BOE. Those who don't save their receipts can calculate what they owe based on last year's tax return. For more information:
The state has required payment of use taxes since 1935, an effort to prevent out-of-state retailers from having a competitive advantage over California-based vendors. According to BOE estimates, the unreported and unpaid use tax costs the state more than $1.1 billion a year.

November 21, 2012
Why was 50% of house bought from mother's trust reassessed?

Q: Before my mother died she set up a special needs trust for my sister and I, we are both on social security. In her Will she said that she wanted the house to go into the Estate and for it to be sold and that would help to fund the trusts accounts since the proceeds would be divided between the two of us. She also left a great deal of stocks that her broker had set up and she would usually show a gain (no matter how small) on her quarterly reports. What I did, after she died, was sell my house (that I had already paid off) and buy her house but I am being told now that since my sister is also a beneficiary (there is just the 2 of us), that I will only be allowed to get 50% of her Prop.13 instead of 100%. Why is that, my sister did not buy the house I did. And if that be the case than maybe I should have only had to pay one half of the asking price of the house, since the other half was left to me in mom's Will. So I have a couple of questions:
#1 Did I get a bad deal having to pay full market value for the house, when 1/2 of it was left to me?
#2 Why would the County only give me 50% of mom's Prop 13, The name on the new deed is my name not my sisters.
God Bless my MOM, she had her heart in the right place and I love and think of her everyday.
Thank you for your time, Ellen
P.S Since we have Special Needs Trust, we are required to have a trustee to manage the trust accounts. If you are not happy with that person, can we just fire her? Can we ask for an outside audit, if so HOW?
Thank you again.
--Ellen, Sacramento, CA

November 21, 2012
Should my fifth-wheel trailer go into my trust?

Q: I just created a living trust and put my house and investments into it. Should I also put my 5th wheel trailer into the trust? I did not add my cars. -- jstpeg, Grass Valley, CA

November 19, 2012
Do I need to list reason for termination on job application?

Q: I worked for Bevmo about 11 years ago. I sold alcohol to an underage customer without checking ID. I thought they were over 21. They let me go immediately. They were testing me and I failed. Do I have to list this on a job application? Carol - Lincoln, CA

November 17, 2012
Are there tax breaks for sending a child to private school?

Q: Both my wife and I have to commute to different areas everyday for work and it makes it impossible for my daughter to go to the public school we are zoned for. We send her to a private elementary school near where my wife works. Is there any tax breaks we can use from having to send our child to a private school because of our work locations?

Thank you for your help,


November 13, 2012
Military urged to seek relief for mortgage troubles

In honor of Veterans' Day, military veterans and active service members are urged to file a complaint if they're having trouble with their mortgage lender.

The outreach is part of this year's $25 billion federal settlement with five major mortgage providers - Ally, Bank of America, Citi, JP Morgan Chase and Wells Fargo - to provide relief to millions of homeowners who struggled to keep their mortgage during the recent recession.

That National Mortgage Settlement, announced in March, has specific provisions for military members. Among them, mortgage lenders:

--Must repay service members for a wrongful home foreclosures made after Jan. 1, 2006;
--Give refunds of at least $500 if service members were wrongfully charged more than 6 percent interest on loans after Jan. 1, 2008;
--Cannot foreclose on a property within 9 months of a military member receiving "Hostile Fire/Imminent Danger" pay, unless a court order is obtained.

Attorney Joseph A. Smith, Jr., the settlement's monitor, said he wants to know "if any of our nation's veterans are experiencing wrongful treatment from their mortgage service, as it will help me better oversee the settlement and ensure they find appropriate counsel for their issue."

Smith cannot intervene on an individual's behalf, but is overseeing compliance with the nationwide settlement.

Any service member having mortgage trouble should call
Military OneSource at (800) 342-9647 or file a complaint with the Office of Mortgage Settlement Oversight.

Additional help for borrowers - military or not - who lost their home to foreclosure between Jan. 1, 2008 and Dec. 31, 2011, is available through the National Mortgage Settlement office or by calling (866) 430-8358. Assistance is for those with loans through the five banks named in the settlement, not loans owned by Fannie Mae or Freddie Mac.

November 12, 2012
Seniors: Get free help Sunday on Medicare prescription drugs

Seniors can get free help Sunday picking their 2013 Medicare prescription drug plan, as well as a review of their personal medications.

The free counseling on Medicare Part D prescription plans is offered by University of the Pacific graduate pharmacy students, an annual outreach effort by the Stockton campus.

The Sacramento event is scheduled from 9 a.m. to 3 p.m. at Vietnamese Martyrs Catholic Church, 8181 Florin Road. It's the first time in three years the UOP program will be offered in Sacramento. Other clinics will be held in Stockton, Lodi and Modesto.

For Part D prescription coverage, pharmacy students will help seniors determine the most cost-effective Medicare plans, based on doctors, premiums and drug choices. They'll also evaluate a person's entire list of medications to determine if there are any problems with dosages or combinations.

In addition, seniors can get free flu shots, as well as testing for blood pressure, cholesterol, diabetes and bone density.

To schedule a Sunday appointment for Part D assistance, call (209) 965-7343. Seniors should bring their Medicare card and their list of prescriptions with dosages.

November 9, 2012
Is there a penalty if I cash in my Roth IRA?

Q: I just completed 5 years with the school district and have become eligible to purchase air time. This option will end January 1, so it's really making me think it's something I should seriously consider. It's pretty expensive, about $6,000 per year purchased. I was wondering what the penalty would be if I cashed in my Roth IRA - about $10,000 - to use as a down payment on the air time ($3,000 for 5 yrs). I haven't looked at my statements lately, but I think much of it is not earned, but is original principal. Do you have to pay a penalty if all the funds are your own? CalPERS will not allow a rollover from a Roth IRA.
I sure appreciate your help.


November 9, 2012
Will I have to pay 3.8% Medicare tax on the sale of my home?

Q: I have received emails saying that if you sell your home in 2013, you must pay a 3.8% Medicare tax on the sale. This greatly concerns me because I will be putting my home on the market next year. Do you know anything about this? Is it true or just another urban legend? Thank you for your help.

Loomis, CA

November 9, 2012
Which education tax break is best?

Q: We have about $6K in a 529 for our daughter's college expenses. Now that she is a freshman, we have incurred a few expenses: $1,200 laptop, $700 payment and books. My question is this: Is it better to withdraw the funds from our 529, or use the education credit on our federal tax return? I know I can't use both and I'm not clear about the education credit options. Reading the IRS site, it appears you can't use the American
Opportunity for room and board. She did receive the CSU Cal grant of approx. $3K per semester, a $1,000 Pell Grant, and a $1,000 scholarship. I don't want to make a withdrawal from the 529 until I'm sure that I'm unable to use the credit.


November 6, 2012
Investors and consumers: Beware of Hurricane Sandy scams

It happens after every natural disaster: con artists try to exploit a tragedy for their own financial gain.

As cleanup of Hurricane Sandy's devastation continues on the East Coast, consumers and investors in California and nationwide are being reminded to be wary of phony solicitors, investment offers and other scams that prey on the disaster.

"Scammers are getting good at their game," said Joanne McNabb, director of Privacy Education and Policy for the state Attorney General's office in Sacramento. Just as with Hurricane Katrina in 2005 or Japan's earthquake/tsunami last year, phony solicitations for disaster-related donations can arrive by email, fax, phone, tweets, Facebook or other social media.

"Unless you initiated the contact, ignore it and delete it," said McNabb. "If you want to give to the Red Cross or another charity, check their web site or your phone book and contact them directly."

In other cases, investors can get duped by fraudulent appeals related to disaster-related technologies, such as water extraction, home restoration or earthquake-resistant buildings.

"Individuals, including those receiving lump sum insurance payouts, should be extremely wary of potential investment scams related to Hurricane Sandy," the SEC recently posted on its website.

November 5, 2012
Do I need a revocable trust?

Q: When is it best to have a trust set up? My assets are 4 cars, household goods (no house), under $100,000 in savings, and a FERS retirement account. What type of trust would you recommend, and how does one select a firm to set one up? Thank you. -- Scott, Ione, CA

November 5, 2012
Will I owe taxes if I cash out whole life insurance policies?

Q: Over 40 years ago my husband and I purchased whole life insurance policies. Over time we took out policies on our children as well. We didn't always have enough money to pay the premiums so our agent suggested we borrow from some policies to pay premiums on others. We've been doing this for years now and the loans against the policies are large. We are retired now and still paying every month for these policies. We'd like to get out from under the premium payments, but have been told that we would have to pay taxes on the loans. If we pay off each policy and then cash them in, would we owe taxes on the cash value? Thank you for the help.
Antelope, CA

November 5, 2012
Should I have taxes withheld from an inherited IRA?

I will receive an inherited IRA. When cashing it out, should I have taxes withheld?


November 5, 2012
Are there inheritance taxes on stock I leave to my heirs?

Q: I wish to will money held in an account at a major stock trading firm to one of my children for distribution among my adult children and grandchildren. Are there inheritance and/or gift taxes involved in the passing of this money (which is in stock)?

Rio Vista

November 1, 2012
Who should we name as our trust executor?

Q: We need to find a reputable executor for our trust. We don't have any relatives nearby that we would like to name. We have friends we trust but they are older like us and may find the chore too difficult. Who might we hire and what are the usual costs involved? Thank you. -- Marlene, Elk Grove, CA

November 1, 2012
Can a house remain in trust indefinitely?

Q: Is there any harm in leaving a house titled in a trust name after a person is deceased? All other assets have been disbursed, the house is a rental and the rent is split evenly (after expenses) among the siblings, each claim the income and expenses on our individual tax returns, is that okay? --Denise, Elk Grove, CA

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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