Be careful if you donate to charity for a specific purpose

Bernard and Jeanne Adler donated $50,000 to an animal shelter in their hometown of Princeton, N.J. The gift was to finance a new structure for large dogs and older cats (whose prospects for adoption are limited), and the structure was to be named for the Adlers.

Before construction began, however, the shelter merged with another organization. After the merger, the new organization announced plans to build a smaller structure in another town, without specific facilities for large dogs and older cats and without naming anything for the Adlers.

The Adlers went to court and demanded that the shelter return their $50,000 gift. The shelter argued that it had fulfilled the Adlers’ intent as well as it could under its changed circumstances. But an appeals court said that didn’t matter – the Adlers had made the gift with specific conditions, and if the conditions weren’t met, the charity had to return the funds. [Read more...]

Condos’ attempts to limit unit rentals can create issues

Many condominium associations want to limit the owners’ ability to rent their unit to tenants. But doing so is often more complicated than it sounds.

There are lots of reasons why condo associations might want to restrict rentals. For instance, tenants generally aren’t as careful as owners to take care of the property and respect other residents’ right to peace and quiet. Owner-landlords who don’t live in the property might be less willing to help financially with needed improvements. And a high percentage of renters might make it more difficult for owners to sell their units, in particular by making it harder for potential buyers to qualify for certain types of home loans.

The advent of multiple short-term rentals through websites such as also raises the prospect of a continuous revolving door of tenants, which could attract partying, disorder and crime. There are a number of approaches that can be taken to restricting rentals, including:

  • Banning rentals altogether
  • Setting a maximum number of units that can be rented at any one time
  • Requiring a minimum duration for leases
  • Requiring owners to live in the unit for a year before leasing it
  • Requiring prior trustee approval of any lease
  • Requiring trustee approval of any lease

[Read more...]

The danger of waiting too long to do estate planning

Some people never get around to writing a will or planning their estate until the last minute, when they have grown old and have a serious illness.

Other people write a simple will when they’re young, but never review or update it until something happens that makes them think that death is imminent.

While any estate planning is better than none, the vast majority of mistakes and problems occur when people procrastinate planning their estate and then try to do it in a hurry. If you wait until the last minute, it might be very difficult to locate all the documents you need to properly execute an estate plan. And you might not have sufficient time to take advantage of all the techniques that are available to save taxes and properly take care of your heirs.

In addition, last-minute changes to your will can be very disturbing to family members. A great many will contests are the result of heirs whose expectations were upset by eleventh-hour amendments. [Read more...]

Does ‘staging’ a home really make it sell faster?

Many people spend a lot of money “staging” a home with nice furnishings and accessories in the belief that it will help sell the house. But there’s never been a scientific study to test this hypothesis…until now.

Researchers at the College of William and Mary in Virginia walked 820 homebuyers through six “virtual” homes on high-quality rendering software. The homes were identical, except that some had neutral beige walls and others had unattractive purple walls, while some had “ugly” furniture, some had attractive furniture and some had no furniture.

The result? When asked how much they would pay for the home, each group gave the same average price – roughly $204,000. The staging made no difference to them. [Read more...]

What you need to know about the new ‘trusteed IRAs’

If you don’t need all the money in an IRA after you retire, there can be big tax advantages in carefully leaving it to your children or other heirs. If it’s done right, the heirs can take out only
the minimum required distribution each year, and the assets in the IRA can continue to grow tax-deferred for decades – and in some cases, for generations to come.

The problem with this planning technique is that it requires your heirs to be patient money managers. In the real world, many heirs withdraw the funds from an inherited IRA quickly, which destroys the tax advantages.

The traditional solution is to leave your IRA to a trust, in which a trustee can decide how to invest the IRA, when to make withdrawals from the IRA, and what distributions to make to your heirs. [Read more...]

U.S. issues new, easier forms to help mortgage shoppers

One reason many potential homebuyers find mortgages to be intimidating is that lenders send them lengthy, complex “disclosure” forms that are confusing and hard to understand. This can make it more difficult to figure out exactly what you’re getting into, and whether one mortgage product is really better than another.

Now, the federal government is issuing new, simplified forms to make shopping for a mortgage easier.

The new forms will make it much less complicated to understand your costs and obligations, and to engage in comparison shopping.

In the past, mortgage applicants received two separate forms after applying for a loan – an early Truth in Lending Statement and a Good Faith Estimate. At closing, they got two more forms – a final Truth in Lending Statement and a HUD-1 Settlement Statement. [Read more...]

Long-term low interest rates are wreaking havoc on many trusts

For decades, it was very common for trusts to be set up like this: “The trust income will go to the first beneficiary, and when the first beneficiary dies, the trust assets will go to a second beneficiary.”

Here are some common examples:

  • A couple sets up a trust with the income going to a child, and when the child dies, the assets go to their grandchildren.
  • A wife’s will creates a trust that pays income to her second husband, and when he dies, the assets go to her children by her first marriage.
  •   A man sets up a trust where the income goes to his wife, and when she dies, the assets go to charity.

That’s all well and good when interest rates are healthy. But over the last few years, interest rates have plunged to historic lows, and stayed there. [Read more...]

Skillfully Navigated the Masshealth Long Term Care Application

“With our elderly loved one finding himself sent from a hospital to rehab/nursing home and his personal funds running out and still requiring care we turned to Simmons & Schiavo.

The care facility got a lawyer and kept threatening us with a “conservatorship” thinking there was a big pay day at the end of the rainbow. Marco Schiavo thought otherwise.

He skillfully navigated the application and approval process with Masshealth for Long-Term-Care Services in a Nursing Facility, advised us on the required spend-down of patient assets (legal, medical, pre-paid funeral, etc…) and after diligent counsel of the entire process by Marco and his partner Ken, Masshealth approved the care and payments (retroactively) and there was even a patient pay refund obtained, which was put towards more of the pre-paid funeral expenses of our loved one.

This took a huge burden off us both emotionally and potentially financially and gave us the peace of mind everybody should have if a loved one takes ill and needs care and assistance, especially an elderly family member.

Marco and Ken are both professional and passionate about helping and we are grateful to them for their assistance.”

Edward D.  – Malden

Some ‘home improvement’ projects actually lower value

A number of home improvement projects can actually lower the value of a home by turning off potential buyers, according to an interesting recent article published by Yahoo! Finance.

The following projects might make you happy if you’re staying in your home for a while, but they can be a bad idea if you’re planning to sell soon, according to the article:

  • Swimming pools. Not everyone loves a swimming pool. Many buyers see them as a big maintenance expense, a danger to small children, or a potential lawsuit.
  •  Converting a bedroom. Most buyers would much rather see a four-bedroom house than a three-bedroom
    house with a home gym. And if you do convert a bedroom, make it easy to turn it back into a bedroom – and never remove a closet.
  • Elaborate landscaping. You certainly want your landscaping to look nice, but extremely elaborate plantings, pools and waterfalls can make buyers think they’ll have to spend a fortune on maintenance.
  • Colored trim and textured walls. Buyers know they can repaint walls, but trim is very hard to repaint, and textured surfaces are very hard to remove.
  •  Hot tubs. Many people are squeamish about the idea of using someone else’s hot tub. And a builtin
    tub can be hard to relocate.

Divorced couples need to update their beneficiary designations

One of the most important things people can do after a divorce is to update their beneficiary designations, and indicate who should get the assets in various accounts if they should unexpectedly pass away.

Most married people name their spouse as the beneficiary of their accounts, but in the stress following a divorce, they often forget to update these designations.

And even when people make an effort, they might not remember every account. Pensions, 401(k) plans, life insurance policies, brokerage accounts, bank accounts, and more may all have listed beneficiaries.

Remember that if you die, who gets the money in these accounts usually depends on who is the listed beneficiary – not who is named in your will. Even if your will says that “everything” will go to a new spouse or a child or other relative, the will doesn’t govern a separate account such as a 401(k) or an insurance policy. [Read more...]