Gift Tax Fundamentals
The federal government imposes a substantial tax on gifts of money or property above certain levels. Without such a tax someone with a sizable estate could give away a large portion of their property before death and escape death taxes altogether. For this reason, the gift tax acts more or less as a backstop to the estate tax. And yet, few people actually pay a gift tax during their lifetime. A gift program can substantially reduce overall transfer taxes; however, it requires good planning and a commitment to proceed with the gifts.
Understanding The Mortgage Underwriting Process
Whether you're looking for a first mortgage on a new home or a refinance on an existing loan, the interest rate you are offered will be based on the same factors; your income compared to your mortgage payment, the value of your property compared to the liabilities placed on it, and your credit report. The “Processing” of your loan is the preparation of all relative documents to verify, prove and package all information pertinent to these factors.
Living Expenses In Retirement
In order to plan realistically for the future you need to have a clear understanding of what money you need when you retire. This will include the cost of living and special activities you will have. It is estimated that you will need to replace 60% to 80% of your pre-retirement earnings in order to keep the standard of living you have had thus far.
Selling Your Home
Once you have decided to try to sell your home, the next big decision you will face is whether you want to sell it yourself of go through a real estate broker. The broker usually charges 5% to 7% of the selling price for her services. However, realtors know the local market, can help you determine a reasonable selling price, and save you a lot of the hassle involved if you sell it yourself.
Managing Your Assets
When you start organizing your portfolio you will want to consider how you will be spending your money after you retire. Some money will be deposited directly into your checking account; such as Social Security where as other income could be less predictable. It is always nice to get extra income you are not counting on but you must not plan on this.
Creating A College Funding Strategy
Saving for college isn't easy, but the earlier you start the better off you'll be. For example, if you save $60 a month for 17 years earning 8% per year, you will have over $25,000 by the time college begins! Taxes will reduce the amount of the portfolio.
There are several savings and investment strategies that can help you accrue money for college.
Charitable Remainder Trusts
A Charitable Remainder Trust normally is used as a strategy for converting highly appreciated assets into income producing assets, without income tax liability. The Charitable Remainder Trust is an irrevocable trust with both charitable and non-charitable beneficiaries.
Your Personal Financial Statements
Personal financial statements are the roadmap that guides us from where we are today, to where we want to be tomorrow. They also provide fixed points of reference from which we can measure our progress over time.
Personal Financial Statements
There are two basic personal financial statements that everyone should prepare, or have a financial advisor prepare, at least once each year; the cash flow statement and the balance sheet.
