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Liz Weston

Monday’s need-to-know money news

November 30, 2020 By Liz Weston

Today’s top story: Biden’s student loan forgiveness could wipe out debt for 15 million borrowers. Also in the news: A new episode of the Smart Money podcast on what Biden may do for your finances, when to donate rewards to charity and when to give cash, and mortgage rates stay low as December deadlines loom.

Biden’s Student Loan Forgiveness Could Wipe Out Debt for 15 Million Borrowers
More than a third of federal borrowers could see their balances fall to zero with $10,000 in debt cancellation.

Smart Money Podcast: What Biden May Do for Your Finances and How to Make Money
What your finances could look like under a Biden administration.

When to Donate Rewards to Charity and When to Give Cash
Want to help a charity without tapping into your bank account? Sometimes donating your rewards can be a good option.

Mortgage Outlook: Rates Stay Low as December Deadlines Loom
Uncertainty ahead.

Filed Under: Liz's Blog Tagged With: Biden, donating rewards, mortgage outlook, Smart Money podcast, student loan forgiveness

Q&A: Are those 529 college savings plans still a good idea?

November 30, 2020 By Liz Weston

Dear Liz: Last week we had an infant come into this world and we’re already thinking about college. I know you’ve addressed this before, but things change and I was wondering if the 529 plan is still the way to go. If our son decides not to go to college, what are the tax consequences?

Answer: Congratulations! Yes, state-sponsored 529 college savings plans are still a great way for many families to save for future college costs. The money grows tax deferred and withdrawals are tax free when used for qualified education expenses.

Even if your son opts not to go to a four-year college, he will probably need some kind of post-secondary education. Withdrawals from 529 plans can be used to pay for any accredited school in any state, including community college and trade schools.

On the off chance that he doesn’t get any kind of schooling, or conversely gets a full ride, you can change the beneficiary so that the money pays for the education of a sibling or other close relative, including yourself. And if nobody wants to use the money for schooling, you can simply withdraw it. The earnings will be taxed and subject to a 10% penalty.

Filed Under: College Savings, Q&A Tagged With: 529 college savings plan, q&a

Q&A: A collection of advice on selling collections

November 30, 2020 By Liz Weston

Dear Liz: I concur with your advice regarding selling collections. I am a retired licensed marriage and family therapist. I’ve witnessed clients struggle with caring for a loved one and their things. One family started taking photos of their loved one with much-treasured collectible objects, and recording the stories told about them. This offered increased connection and understanding across the generations. With this recorded story, it was easier to release and sell the things. And there were a few treasures that family members asked to keep, pleasing their elders immensely!

Answer: What a lovely idea! As collectors know, it’s all about the story, and many would embrace the chance to share theirs.

Dear Liz: A friend collected and has some wonderful pieces of Japanese items such as antique tonsu chests and porcelain, some of which are quite valuable. When she was updating her estate plan, her attorney suggested she ask me, as a friend and fellow collector, to be an advisor to her family about disposing of these items after her death (assuming she predeceases me). My contact info was then shared with her loved ones. Another trick I have seen is to have copies made of receipts with identifying information and prices paid placed inside drawers of valuable furniture. Whether these items are sold at auction, estate sale or upscale consignment, the information is extremely valuable in helping to determine authenticity. Naturally, this information should also be stored with legal documents. Prior to a recent surgery I also shared my information with my sister and went over the location in my files for all pertinent information. It can be difficult for heirs to differentiate Baccarat crystal, vintage Wedgwood china and top-quality French copper from goods sold in discount chains. Once they know what the items are, the internet and EBay make it easy to get a sense of the value of items for sale. Hope you find this helpful.

Answer: Very much so, and I’m sure readers will as well. Thanks for the tips!

Dear Liz: Regarding your advice to the collectors and the impact on the executors, there can be another wrinkle: disagreements on valuations among the heirs.

I’m the executor for my parents’ estate and my mother spent a considerable amount of time and resources collecting art. Unfortunately there is little documentation on the art and it is in a niche market where it will be hard to get accurate values.

I’ve decided that when the time comes, I will use what little documentation my mother had to establish values and then divide the art collection among the heirs. If the heirs want to liquidate the art, that is their choice. It takes me out of the middle of squabbles over whether or not I got a “good” price for something. And it gives me time to decide for my portion of the collection what pieces I want to keep for myself and what I want to sell. This obviously only works when the heirs are people and not organizations and they have the ability to take the collection rather than a check.

Answer: Oh, boy.

If you are the executor, you will have a fiduciary duty to the estate. What that means is that you will be legally required to act in the estate’s best interests, rather than in your own. Cherry picking a collection is an excellent way to violate that duty and potentially get yourself sued. Another way to invite lawsuits is to rely on scanty, out-of-date documentation to establish values without attempting to get current appraisals.

If you really don’t want the hassle, ask your mother to designate, in writing, who gets what. She should discuss this with an estate planning attorney to see if her estate documents need updating or if she can include a letter detailing her bequests.

Filed Under: Estate planning, Follow Up, Q&A Tagged With: collectibles, Estate Planning, q&a

Wednesday’s need-to-know money news

November 25, 2020 By Liz Weston

Today’s top story: ‘Better late than never’ applies to retirement investing, too. Also in the news: How to conquer Black Friday from your couch, 5 reasons your car needs a dash cam, and how to screen tenants when renting out your home.

‘Better Late Than Never’ Applies to Retirement Investing, Too
A late start in retirement investing is better than no start, advisors say. There’s still time to benefit.

How to Conquer Black Friday From Your Couch
No need to risk the crowds.

5 Reasons Your Car Needs a Dash Cam
Keeping yourself safe.

How to Screen Tenants When Renting Out Your Home
Proper vetting is important.

Filed Under: Liz's Blog Tagged With: auto insurance, Black Friday, dash cams, retirement investing, screening tenants

Tuesday’s need-to-know money news

November 24, 2020 By Liz Weston

Today’s top story: Savings rates are staying low. Here’s why, and what to do. Also in the news: Ask a Points Nerd on how to celebrate the holidays without traveling, renting hotels for big events is dirt cheap at the moment, and the benefits of a ‘second chance’ checking account.

Savings Rates Are Staying Low. Here’s Why, and What to Do
Savings rates will likely remain low for a while after moves by the Federal Reserve, but you should still save.

Ask a Points Nerd: How Can I Celebrate the Holidays Without Travel?
Think of it as an opportunity to relax and try new things, instead of a sad alternative to the normal holidays.

Renting Hotels for Big Events Is Dirt-Cheap … for Now
The cost of booking a hotel for conferences and weddings has plummeted, but don’t expect it to stay that way.

Do You Need a ‘Second Chance’ Checking Account?
Making up for past mistakes.

Filed Under: Liz's Blog Tagged With: ask a points nerd, event planning, holiday travel, savings rates, second chance checking accounts

Monday’s need-to-know money news

November 23, 2020 By Liz Weston

Today’s top story: How your mental health can affect how you save money. Also in the news: The holiday shopping episode of the Smart Money podcast, how to protect your credit when shopping for the holidays, and how to choose a secure credit card.

Your Mental Health Can Affect How You Save Money
How your state of mind can affect your wallet.

Smart Money Podcast: The Holiday Shopping Episode
Answering your holidays shopping questions.

How to Protect Your Credit When Shopping for the Holidays
Start by understanding your credit score, then set a spending limit and be strategic when shopping.

How to Choose a Secured Credit Card
Finding the right card to build your credit.

Filed Under: Liz's Blog Tagged With: holiday shopping, mental health, safety tips, secure credit cards, Smart Money podcast, spending habits

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