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Funeral Service Shopping: Planning Tips Part 1 of 7

With what the world has been experiencing in the past several months, many people were not prepared for the loss of loved ones.  It is a traumatic time and one that we would rather not think about.  However, it is a fact of life that most of us will at some point in our lives be forced to visit a funeral home to arrange for the funeral of a loved one.  This series of articles will hopefully provide some insight as to what may be faced when this unfortunate time arrives. 

This may sound like a very morbid topic, but it is one to be familiar with.  Often times someone who has just lost a loved one shares their experience in planning the funeral of their loved one.  When a loved one dies, grieving family members and friends often are confronted with dozens of decisions about the funeral — all of which must be made quickly and often under great emotional duress. What kind of funeral should it be? What funeral provider should you use? Should you bury or cremate the body, or donate it to science? What are you legally required to buy? What about the availability of environmentally friendly or “green” burials? What other arrangements should you plan? And, practically, how much is it all going to cost?

While you may be healthy and “young” and not feel the need to do any advance planning, you are able to pre-arrange your own funeral at any time and save your loved ones the burden when in a time of emotional distress.  Many funeral homes offer you the option of planning and paying now or paying later.  If you make payment in advance, the funds are placed into a pooled fund and earn interest while they are being held.  At the time the funds are needed, the funeral director then can access the funds to pay for services. 

Funeral Planning Tips

Many funeral providers offer various “packages” of goods and services for different kinds of funerals. When you arrange for a funeral, you have the right to buy goods and services separately. That is, you do not have to accept a package that may include items you do not want. Here are some tips to help you shop for funeral services:

  • Shop around in advance. Compare prices from at least two funeral homes. Remember that you can supply your own casket or urn.
  • Ask for a price list. The law requires funeral homes to give you written price lists for products and services.
  • Resist pressure to buy goods and services you don’t really want or need.
  • Recognize your rights. Laws regarding funerals and burials vary from state to state. It’s a smart move to know which goods or services the law requires you to purchase and which are optional.
  • Apply the same smart shopping techniques you use for other major purchases. You can cut costs by limiting the viewing to one day or one hour before the funeral, and by dressing your loved one in a favorite outfit instead of costly burial clothing.

My next writing will address Funerals and the Federal Trade Commission.

Did You Know That Your Phone Can Be Hijacked?

Yep, your cell phone can easily be hijacked – taken over by criminals.  And, this isn’t just phone calls, but EVERYTHING on your phone – emails, bank information, photos, etc., Everything is vulnerable.  So, what do you have on your phone?  Anything that is sensitive? 

With information available online, it is not difficult to get confidential information.  After all, now we are not giving out our full Social Security Numbers but are usually asked for only the last four digits.  Four digits are easier to determine rather than nine.  With just a little information, hackers can contact your phone provider and pretend to be you.  How hard would it be? 

So, what is the outcome if this happens?  The hijacker would request the carrier to transfer the information from your old phone to a new phone which is in control of the hijacker.  Then your old phone goes dead – no service!

So, who is at risk?  Anyone and everyone.  And the sad thing is that there is nothing you can do to stop it.  High tech geeks have had their phones hijacked. 

What can you do to prevent being a victim of hijacking?  Much the same as you do with your home electronics – don’t open strange emails, make certain passwords are long and complicated, don’t publish your phone number especially on social media accounts.  Specific to your phone, use a PIN for verifications purposes and two-factor authentication if possible.  

And, if you are the victim of phone hijacking, evidenced by your phone not receiving service, says “no service”, “no network” or “emergency calls only”, contact your service provider immediately. 

IRS SERVICES ALERT

We learned today that the only services available with the IRS are electronic services. 

The processing of paper income tax returns and telephone assistance have been suspended due to COVID-19. 

THE ‘CARES’ LAW – How Does It Help You?

The “CARES” Act (Coronavirus Aid, Relief, and Economic Security Act) was signed into law on March 27, 2020.  While the 880-page law covers many different areas, we will look at only the section dealing with retirement plan required minimum distributions. 

With the SECURE Act, the beginning age for RMDs (required minimum distributions) was raised to 72 years and caps the distribution period at 10 years.  So, please don’t confuse the SECURE and CARES.  The SECURE Act sets a new precedent that is permanent.  The CARES Act is for the year 2020 only. 

If you have begun to take RMDs from your retirement plan, the CARES Act suspends distributions for almost all plans for 2020 for employees, IRA owners or beneficiaries.  If you are an employee or an IRA owner and have received a distribution for 2020, you may be able to roll those distributions into an IRA.  However, if you are receiving distributions as a beneficiary, this option is not available to you.

If you have a Required Beginning Date (RBD) in 2020 for a retirement plan, any RMDs will be able to be suspended in 2020.  It is advisable to check with the plan administrator or financial institution to confirm that your RBD would qualify for postponement. 

Just as there are many remaining questions about the SECURE Act, there are many questions about the CARES Act.  Speak with your financial advisor or plan administrator if you feel you would want to suspend any retirement distributions in 2020. 

Spring Cleaning

With all of us sheltering in place, we are probably doing some long overdue cleaning and going through things that we have accumulated.  Among the accumulation, we probably have seen financial records we forgot we had.  So, what do you keep?  What do you shred?  (And please, don’t just rip into a couple of pieces and put in your paper recycling.  Don’t take the chance for your information to be stolen.)

TAX RETURNS – It is recommended that you keep these for seven (7) years.  A suggestion is to put the information for a specific year into a large envelope and mark the year on the outside.  This will make it easier to annually discard information more than seven (7) years old and keep your stash to a minimum.  Of course, if you have this information stored electronically, you are one step ahead of this method. 

INFORMATION ON INHERITED ASSETS OR ASSETS RECEIVED AS GIFTS – If these assets have a basis that will be needed in the future should you sell the asset and need to report the sale on your income tax returns, keep the basis information as long as you own the asset.  Then, once you report the sale on your income tax return, put the basis information with your tax information for that year. 

REAL ESTATE INFORMATION – It is recommended that you keep the settlement statement from your original purchase as well as records to substantiate any capital improvements.  This information will be needed at such time as you would sell the property. 

INFORMATION ON SECURITIES – You should keep information regarding the purchase of the securities for basis purposes.  Also, keep pertinent information on stock splits or return of principal.  Dividend information is very important if you have a DRIP – dividend reinvestment plan – as the additional dividends will have various basis amounts. 

MILITARY PAPERS – Discharge papers, benefits, military insurance, etc., should be kept for purposes of Social Security, veteran’s benefits both during life as well as for death benefits.  Military honors can be a part of funeral services, however, it is necessary that the discharge papers be available for presentation. 

RETIREMENT PLANS – If you have made nondeductible contributions to a retirement-type plan, records should be kept for the contributions to support tax liability when funds are withdrawn.

LEGAL JUDGMENT/LOAN SATISFACTIONS – Keep these indefinitely as proof of the payment.  If the document has been filed with the Courts, however, this may not be necessary as the proof of payment is of public record. 

INSURANCE POLICIES – Keep these records as long as the policy is in effect.  If the policy is no longer effective, keep the status report from the insurance company stating the policy has been cancelled.  This is true for all types of insurance.  Remember that life insurance policies may be paid up and while no premiums are being paid, there is a value for the policy. 

Hopefully this will help you reduce the information you are hanging onto.  Remember to SHRED, SHRED, SHRED when discarding sensitive information.  The best rule – if in doubt, keep it.

FTC Coronavirus Scams Alert

The COVID-19 pandemic has opened yet another door to scammers.  Thus, we want to share an article with you written by Jennifer Leach, Associate Director, Division of Consumer and Business Education, FTC, on various scams to be on alert for regarding Coronavirus stimulus checks.

Checks from the Government

As the Coronavirus takes a growing toll on people’s pocketbooks, there are reports that the government will soon be sending money by check or direct deposit to each of us. The details are still being worked out, but there are a few really important things to know, no matter what this looks like.

1. The government will not ask you to pay anything up front to get this money. No fees. No charges. No nothing.

2. The government will not call to ask for your Social Security number, bank account, or credit card number. Anyone who does is a scammer.

3. These reports of checks aren’t yet a reality. Anyone who tells you they can get you the money now is a scammer.

Look, normally we’d wait to know what the payment plan looks like before we put out a message like this. But these aren’t normal times. And we predict that the scammers are gearing up to take advantage of this.

So, remember: no matter what this payment winds up being, only scammers will ask you to pay to get it. If you spot one of these scams, please tell the Federal Trade Commission: www.ftc.gov/complaint. We’re doing our best to stop these scammers in their tracks, and your report will help.

For a full list of all the current scams please visit https://www.consumer.ftc.gov/features/coronavirus-scams-what-ftc-doing

Income Tax Deadline Extended

Below is a release from the IRS on Friday, March 20, 2020 regarding the filing deadline for FEDERAL income taxes.

Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed

The Treasury Department and IRS announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds are still being issued within 21 days.

“Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically,” said IRS Commissioner Chuck Rettig. “Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I’m incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment.”

The IRS will continue to monitor issues related to the COVID-19 virus, and updated information will be posted on a special coronavirus page on IRS.gov.

Electronic Wills

WOW – who would have ever thought that an electronic Will would become acceptable to probate (file of record with the court as being the decedent’s intentions).  Yes, we do so much electronically, but a Will, which back in the day couldn’t have an erasure on it (and I am talking way back in the day before memory typewriters and in the days of carbon paper – if you even know what that is).  Perhaps I am dating myself, but I typed many a Will only to get to the last line of the paper (and it was legal size paper) to make a typo and have to start that page all over again.  OK, so back to current times. 

The Courts are being faced with validating electronic Wills – most of which don’t contain statutory language.  From what I have read, some of the electronic Wills have been admitted, but others have not.  Here are a few stories I have seen about electronic Wills.

A Will was dictated by the testator to a sibling who typed the same on a tablet device.  The testator signed the Will using a stylus and there were two witnesses who signed.  While the Will was not notarized, it was admitted as it was in writing and signed. 

There was a case in Australia where a testator prior to committing suicide created documents on his phone and labeled one to be a Will.  After consideration, the Court found that the Will was admitted to probate. 

Then there are video Wills.  These have been around longer than tablet devices and mobile phones and have been successful in the Courts admitting them to be valid Wills in certain circumstances.  People unable to sign their names but able to speak their intentions have had successful video Wills probated.  The testators must clearly state that the video is intended to be their Will. However, nowadays getting a video Will probated can be more challenging than an electronically written Will. 

The Uniform Electronic Transactions Act which was approved in 1999 allows for the transaction of business electronically.  Almost all states have adopted the UETA, but there is an exception for Wills and testamentary trusts that requires each state to enact legislation to allow for electronically signed Wills to be admitted.  This has led to the Uniform Electronic Wills Act which was approved in July 2019.  This Act continues the traditional formalities of a Will – a writing, a signature and attestation, with some adaptations.  The primary requirement is that a Will be “a record readable as text at the time of signing”.  Further, the electronic Will must be signed in the physical presence of witnesses (per individual state requirement). 

If an individual executes an electronic Will, but later wishes to revoke the same by a subsequent document, this may present challenges.  Since there is no hard copy of the original, this may lead to court involvement to determine the testator’s intent. 

For many years, Wills have been self-proving – meaning that the signature of the testator (in many states, but not all)  and the witnesses are notarized, which eliminates the need for the witnesses to come forward when the will is probated to “prove” their signatures.  There is currently a division among states as to whether the self-proving affidavit can be signed by the witnesses simultaneously and incorporated into the electronic document.  There is also discussion as to the validity of the electronic Will when the testator is physically located in one state at the time of execution but changes residency, prior to death, to another state.  This definitely conflicts with the expression of Wills set forth on paper and signed in ink that “valid where made, valid everywhere”. 

This is a topic that will likely become more commonly discussed as we journey toward being a “paperless” society. 

Staying Calm During Market Fluctuations

The Coronavirus has put the world into a tailspin.  The impact has gone far beyond the individuals who have contracted the Virus and been taken ill.  You hear of more and more cases in the US every day, which are causing behaviors affecting our everyday lives. 

So, what can we do?  STAY CALM.  Being reactive is not always the best behavior, so try to be proactive.  Think before acting. 

The stock market has been a big focus in recent weeks and people are afraid when seeing their portfolios lose value.   At least part of the problem is attributable to people’s reactions to the wide-spread Virus.  While I am not a financial guru and don’t have a crystal ball, I offer these practical tips on trying to ride out the tide in this tumultuous time:

  • First of all, stay calm or try to stay calm.
  • Don’t make any decisions based on fear.
  • Talk to your financial advisor regarding your portfolio – they are there to help you.
  • If you don’t have a financial advisor, think twice before taking steps to liquidate any securities. 
  • If you have extra cash, now might be a good time to do some investing when prices are low.
  • Most of all, remember that a recovery is likely, so be patient. 

How to Get Your Income Tax Refund Faster

We are in the midst of tax season and if you haven’t started to think about your returns, you should begin to do so. 

E-filing is the best way to file your return as long as it has been prepared electronically using either software or one of the free filing services.

If you are lucky enough to be getting a refund, the IRS has published the top 10 facts about having your refund direct deposited to your bank account: 

  • It’s the best and fastest way for taxpayers to get their tax refund.
  • It’s free.
  • It’s secure.
  • Taxpayers can deposit their refund into not only one, but also two or three accounts.
  • Combining direct deposit with IRS e-file is the fastest way for taxpayers to receive their refund.
  • When using direct deposit, there’s no risk of having a paper check stolen or lost.
  • The IRS uses the same system to deposit tax refunds that Social Security and Veterans Affairs use to deposit benefits into millions of accounts.
  • It’s easy. Just follow the instructions in the tax software or on the tax form.
  • Taxpayers can use direct deposit even if they are filing by paper.
  • Direct deposit saves taxpayers money. It costs the IRS more than $1 for every paper refund check issued, but only a dime for each direct deposit made.

Don’t wait six to eight weeks for a paper check.  Get your refund in less than half that time by requesting direct deposit. 

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