Regrettable Facebook posts

A creative man is motivated by the desire to achieve, not by the desire to beat others.

- Ayn Rand

Well, while we all wait during the calm before the storm of the November 2 elections, I thought I’d take some time this week to write about something different.

After all–clients pay us to worry about the tax code, how their assets are affected by changes in the law, etc. on their behalf, and I’ve already spent a fair amount of time urging you to meet with us before the laws change.

So, this week, I thought I’d do something a little different, and give you some important information about privacy.

Privacy is a funny thing, these days of Twitter and Facebook. Frankly, I think that much of the fear about it is overblown. That said, there’s a new tactic out there used by identity thieves which is NOT overblown, and it’s called: “Facebook stalking.”

With the help of a man from IdentityTheft911.com, I’ve put together some important information for you on how to avoid this new wave of chicanery…

5 Facebook Posts You May End Up Regretting

Did you see the news recently when it was revealed that personal data of millions of Facebook users had been posted to a database open to everyone? Naturally, Facebook users, were concerned about their privacy. And then, of course, there was the news that certain Facebook applications were also leaving users extremely vulnerable.

Yet, people using Facebook, Twitter and other networks (even those with serious privacy controls) are thoughtlessly giving actionable intelligence to thieves. Adam Levin, the chairman of Identity Theft 911, says, “An awful lot of people think when they get online and communicate with their friends that they are invincible.” A seemingly benign post or piece of information could make you a target of identity thieves and traditional crooks.

So, to protect yourself, here are five things you should avoid posting online.

1. Date of birth. Really? Must you get random birthday greetings from elementary school friends? Almost 60% of social networkers post their date of birth, according to a survey by Identity Theft 911. But resist the urge to post your complete birth date — including the year — on your Facebook profile just to get a lot of messages on your big day. This is extremely valuable information for identity thieves. I know — you’re thinking only your friends see what you post. But if someone does a search for your name, that person will see often your birth date if it’s listed in your profile.

2. Child’s date of birth. When you post “Happy Birthday to my sweet Maddie, who turns 5 today,” you’re giving identity thieves valuable information about your child. When it comes to your kids, resist the urge to post any information about them. In fact, there are even more malevolent actors out there who can use this information for more than just identity theft.

3. Travel plans. I bet you’ve seen Facebook posts like this: “We’re going to the beach next week. Can’t wait!” In fact, you may be guilty of it yourself — 18% of social network users post travel times. Guess what? You’ve just extended an invitation for people to burglarize your home. In fact, recently three men in New Hampshire burglarized more than 18 homes by checking Facebook status updates to see when people wouldn’t be home. Yikes!

4. Address. If your address is on your profile AND you let people know when you’re going out of town, well, you know where I’m going with this. Nonetheless, 21% of social network users post their address.

5. Mother’s maiden name. It may seem like common sense not to post your mother’s maiden name on a social networking site, but about 11% said they did. Identity thieves will hit the jackpot if you reveal this bit of information online.

Not only should you avoid posting any of this information, but also you should fix your Facebook settings to control who sees what on your page. Further, use different passwords for social media sites than you use for financial sites, such as your bank or credit card site.

I hope I didn’t scare you too much, but that, instead, this actually helps.

‘Do them now’ moves

Ignorance is never better than knowledge.

-Enrico Fermi

A couple of weeks ago, I sent you a list of upcoming changes for 2011, from a tax perspective.

And I got a few emails from clients and friends who said, “Rowel, thanks for this–but what can I *do* now to minimize my exposure?”

Well, first of all–I want you to know that I read every email I get, and that you may ALWAYS respond to these emails with questions (yes, believe it or not, some lawyers never respond to email, so I need to emphasize that we’re different!). Secondly, while I’m not a CPA, I do know a thing or two about tax issues for my clients.

Yet in all of my years paying attention to the tax code, I don’t quite remember a time like this–with so much up in the air, and the political climate looking like it could shift significantly. It’s as if we’re all in a period of “stasis” until November 3rd–when we’ll see where lawmaking will be headed.

That said, there ARE certain things we *do* know. Like the fact that taxes WILL be rising in 2011. So with that in mind (and so that all of my clients and friends can see what I think you should be doing), I’ve put together a series of “do-it-now” tax moves, as well as some to be considering over the next month or so.

[I realize that for some of my clients, all of this is irrelevant. Tough times, fixed incomes, etc. But I hope that if that's you, you'll forgive my addressing those of my clients who are facing more "complex" financial decisions this year. After all--our philosophy is that YOU know best how to spend YOUR money. Which is why we work so hard to help you have more say over it.]

I think these will really help…

Rowel Manasan’s

“Straight Talk” Personal Strategy

Do-It-Now Tax Moves, And More

Since so many tax issues are up in the air right now, you should organize your tax moves into three categories: those you should do now, those you can decide last-minute in December, and Roth conversions.

If you have “income flexibility” in any way, your list should include:

“Do-it-Now” Moves

* Make a maximum contribution to your 401(k), which is $16,500, or $22,000 if you’re 50 or older this year.

* Sell taxable bonds now and pay the capital gains tax at 15% rather than a much higher rate in 2011.

* Make gifts of the annual exclusion amount.

“Do It Soon” Moves

* Prepare to give away large sums of money late in December. This year the gift tax is only 35% and there is no “Generation-Skipping” inheritance tax. However, you don’t want to make taxable gifts now just in case Congress reinstates the GST tax retroactively.

* Identify possible charitable contributions for deductions purposes. If taxes go up next year, you’ll want to defer these deductions.

* Accelerate your income if possible. If it looks like taxes rates will rise, you’ll want to take in as much as possible in 2010 rather than 2011.

The Roth Do-Undo

This year, taxpayers can convert regular IRAs into Roth IRAs. There are many considerations in this decision, so do give us a call about it, if you’re considering it ((909) 843-6427).

Good news: If you convert now, you have until October of 2011 to undo the conversion or decide whether to pay taxes in 2010 or 2011 and 2012.

After all, with Congress putting so many key tax decisions off, this kind 20-20 hindsight could come in handy.

3 things for parents to know right now

The important work of moving the world forward does not wait to be done by perfect men.

- George Eliot

With all of the talk about the “estate tax” reset coming in 2011, I find that people forget that avoiding the estate tax is just one (small) aspect of an effective plan. I get asked a lot–whether it’s by members of the media, family members or just friends–about what I think is going to happen in 2011. Well, it actually doesn’t really matter for some of the aspects of estate planning which many families find to be most important!

Here’s why:

Life can turn on a dime…and we’ve all faced our share of abrupt shifts. Some good, some … pretty rough. Having walked with families through many of these hard times, I can’t tell you how good it feels for them to be prepared for whatever curve balls might come across their plate.

For me and my family, we’ve put some simple plans in place for a VARIETY of circumstances, not just financial or legal. And it truly helps us sleep better at night, just knowing we’ve got it all covered.

So, that’s my subject for this week’s Personal Strategy Note…read on, and let me know what you think! Further, send me any questions you might have. We’re here for you!

(PS–This is something that we take care of automatically for our clients, by the way.)

Rowel Manasan’s

“Straight Talk” Personal Strategy

3 Steps For Loving Parents

As I mention above, let’s lay aside the taxation issue in estate planning, for a moment, shall we?

Because this issue is so much bigger than how much money Uncle Sam gets to take from an estate. You see, when I think about what frightens parents most, seeing their children in a vulnerable position pretty much tops the list–whether it’s at home, at the pool, or any other place in public.

What exacerbates this further is knowing the fear which children themselves feel when they are surrounded by people they don’t know and don’t know just how much love their parents have for them.

Put the following steps into place, and you’ll eliminate at least some of these dangers…

#1: Identify a Clear Plan for the Care of your Children.

Did you know that 74% of parents have not named guardians? Worse, of the 26% who have, most have made 1 of 6 common mistakes that leave their kids at risk.

When you name short AND long-term guardians for the care of your children, you must give clear guidance to your caregiver and everyone you’ve named to care for your children, in written form. Just by naming these guardians (both short and long-term), your children never have to be put in a situation in which they would be taken out of your home and into the hands of strangers if something happens to you.

An even better step, if your children are old enough for this discussion, is to tell them this plan. Don’t make a big deal of it…you don’t want to frighten your kids at the prospect of your loss. But they’ll feel better knowing that you’ve selected people they can trust and love to care for them well.

#2: Properly Document Your Decisions

Parents often have discussed and agreed upon a guardian for their children and have even made their wishes known to their families; however, not documenting these decisions can result in your wishes not being followed when it really is too late.

You see, if you don’t communicate your wishes in a legally-binding document, you are placing your children in a “free for all”. Without clear, legal guidance, every family member has equal priority of guardianship and the decision about the care of your children will be left in the hands of a broken-down court system and some judge who doesn’t know you or your kids.

This legal documentation is particularly important if you intend for a friend to care for your children as courts will almost always choose a family member over a friend.

Also, don’t forget to be sure to leave behind specific guidance about how you want your children raised.  Education decisions, healthcare decisions, discipline decisions … these are all things you care a lot about and would want made consistent with your opinions for how your kids are raised.

#3: Don’t Neglect Their Financial Future

Sure, there’s different schools of thought on this issue. Some parents don’t want to overwhelm their children with too much in their bank accounts at once, which is understandable.

But, regardless of how you structure this provision, providing sufficient financial resources for your children’s care is your responsibility. And, as a responsible parent, you must take steps to protect what your children will receive … whether it’s through life insurance, savings or some other means.

To do so, establish a living trust, to receive any life insurance benefits your children would receive so that they don’t get access to your assets at the age of 18; and make sure your living trust holds on to the title to any assets that would go through probate in the event of your death. And, if your estate is large enough, you will want to plan to avoid estate taxes as well.

All of these issues, are things we routinely secure on behalf of our clients. If you haven’t yet set any of these items  into place, call us right away ((909) 843-6427) or respond to this post, and we’ll be in touch!

January 1, 2011–Life gets more expensive.

Don’t wish it were easier, wish you were better.

- Jim Rohn

The weather’s getting crisper around the area, and it’s a signal that life is going to shift for all of us. I don’t know about you, but I love these fall weekends with the family–they’re very precious, perhaps because we realize that outdoor activities will be much more limited in a little while.

As I mentioned, the fall reminds us that change is certainly headed our way–but that’s *especially* true come 2011.

First of all, unless something is done by Congress (which we don’t have great reason to think it will happen), the estate tax is coming back in a big way.

But there are a bunch of other changes to the tax code that you should know about, because you still have time to do something about it!

Read on…

New Year, New Taxes

Here’s what’s coming, starting January 1, 2011…

The Return of the Estate Tax

This year, there is no estate tax. However, for those dying on or after January 1 2011, there is a 55% top death tax rate on estates over $1 million. (And you thought you weren’t “wealthy” because your net worth –including real estate– was only $1.4 million?)

And, unfortunately, this will have an impact on gifting, charities, and more.

New, Higher Taxes On Married Couples, Families

The “marriage penalty” (these are compressed tax brackets for married couples) will return starting with the first dollar of your income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples and the dependent care tax credit will be cut.

The Personal Income Tax Increase

The top income tax rate will rise from 35% to 39.6%. The lowest rate will rise from 10% to 15%. All the brackets in between will also rise. Itemized deductions and personal exemptions will be phased out if you have “too much income”, which has the same effect as higher marginal tax rates. Here’s the complete list…

* The 10% bracket becomes an expanded 15%

* The 25% bracket becomes 28%

* The 28% bracket becomes 31%

* The 33% bracket becomes 36%

* The 35% bracket becomes 39.6%

Higher Tax Rates on Savers and Investors

The capital gains tax will rise from 15% this year to 20% percent in 2011.  The dividends  tax will rise from  15%  this  year to 39.6% percent  in 2011.  These rates  will  rise  another  3.8%  in  2013.

Further, there are over twenty  new or higher  taxes in  the  new Patient  Protection and  Affordable Care Act (the  Healthcare Reform Act), many of which  will  first  go  into  effect  on  January  1,  2011.

What To Do About This

1)    Get your estate plan done and use your gift tax exemption before it gets taken away. It is a well known fact that the estate tax is one of the “voluntary” taxes that can be eliminated or substantially minimized with proper planning.

2)    Take advantage of these remaining months in 2010 to have your income count during this tax year, instead of 2011 (as much as you’re able to do so).

3)    Don’t be caught by surprise. Plan ahead for this–and make sure your estate planning takes it all into account, as well. It might be the right time to update your plan.