
                       FINANCIAL PLANNING FOR YOUR FAMILY
                       ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^


      1- ESTATE PLANNING

      Wills and Living Trusts:
      -----------------------

      WILLS-

      a- If you don't have a will for your estate, your state will gladly
      "create" one for you. I feel quite confident, that that is the last
      thing that you want to have happen,  after spending your whole life
      building an estate.

      So, one of the most important steps in life that you can make is to
      have an up-to-date will. A will is needed to distribute your estate
      to whom ever you decide.

      b- Update your will periodically  and especially when there are tax
      law changes or substantial additions to your assets.

      c- Ask the intended executor if they would actually want to be your
      executor  (they may not want to)  instead of simply  naming them as
      executor. Also, if they accept, keep them informed.

      d- If you move to another state,  have a new will  prepared against
      the new states laws.  If you don't,  there is the  real possibility
      that your will could be tossed out of court.

      e- Make bequests as percentages of your entire estate,  rather than
      dollar amounts. The reason for this, is that your estate may reduce
      in value  after you write a will  and that specific  dollar amounts
      could deplete your assets before all inheritors are provided for.

      f- Leave your will  with your attorney  or have your spouse keep it
      in a separate safe-deposit box. the reason is that if you keep your
      will in your own safe-deposit box,  many states seal boxes upon the
      death of the owner and it can take months to have it opened.

      g- If you have  frequent changes  in your assets,  you can  write a
      letter of instruction noting your assets and the locations of them.
      You should  file the  letters  of  instruction  separately  and you
      should do the same with your burial instructions.

      h- Destroy your old will  when you have  a new one made.  This will
      prevent your old will  from possibly being used to contest your new
      will.

      i- Stay away from  "do-it-yourself" wills.  They can be disastrous.


      LIVING TRUSTS-

      a- As an alternative to a will,  you can create a revocable "living 
      trust".  A revocable trust  can be added to  (assets) you can  take 
      property out of it, you can change beneficiaries or you can end the
      the trust,  if you  wish.  A person who  sets up  a trust,  retains
      complete control of the trust.

      b- You  can designate  yourself as the  primary trustee  and choose
      some other person as a co-trustee, in the event that you die or are 
      incapacitated to the extent  that you are not capable of control of
      your assets.

      c- A living trust may  avoid certain probate costs such as, probate
      court costs, attorney fees, executor fees and other fees.

      d- Probate court  can take years  to settle and during the interim,
      heirs receive nothing of their inheritance until it is settled.

      e- You also may not realize that,  probate proceedings  are open to
      the public for their inspection.

      f- And remember this:  it is  not enough to  just simply  set up a,
      trust. You must transfer the assets that you want in the trust,  in
      to the trust to make it effective.

      The use of an attorney,  is highly  recommended to  set up a living
      trust.


      Estate and Gift Tax Exclusions:
      ------------------------------

      a- You can give  an annual  gift of $1O,OOO  per donee and not have
      to pay a gift tax.

      b- By way of a "unified gift and estate tax credit" you can exclude
      up to $6OO,OOO (estate)  and an annual $1O,OOO (gift)  and not have
      to pay gift or estate taxes.


      Shifting Income to children:
      ---------------------------

      a- A  side-line  business  can  make  a  nice  tax-shelter. You can
      generate large paper losses, claim deductions for personal or hobby
      types of expenses and  legally shift income  to a lower tax bracket
      of your minor children.

      b- All  investment income  (as in a side-line business)  of a child
      under the age of 14,  in excess of  $1OOO a year,  is taxed  at the
      rate paid by the child's parents.

      c- If you wish to set aside money for your children,  one way would
      be to purchase U.S. Savings bonds  that mature after  the child has
      reached the age of 14 years.


      Filing for "Head of Household":
      -----------------------------

      a- A single person  may qualify for  "head of household" status if
      you are paying more than 5O percent of the household and that, one
      or more of your relatives are living there.

      b- You are only required  to maintain the household  in which your
      parents live.

      c- Nursing home payments would be eligible.


      2- DIVORCE AND SEPARATION


      Child support and alimony payments:
      ----------------------------------

      a- Alimony payments,  through  a  decree of  divorce or a writ  of
         separation, is usually deductible.

      b- Alimony payments received,  is considered taxable income.  Both
      can agree however,  that payments otherwise  considered as alimony
      will be nondeductible  by the payer and  nontaxable to  the payee.
      This must be agreed upon in writing.

      c- Child support payments are not deductible.

      d- Child support payments received,  are not considered as taxable
      income.


      Division of property or settlement in divorce:
      ---------------------------------------------

      a- Property that is being transferred between parties in a divorce
      or separation,  is  usually not  considered  a taxable  situation.

      b- However, since the basis for such property is carried over, you
      should consider  an attorney's advice  before a transferral of any
      property under these situations.


      3- CHILD CARE

      Credit for child care:
      ---------------------

      a- If you have a dependent or a child  under the age  of 15 who is
      incapable of caring for him or herself and  also requires day care
      to allow you  to continue employment,  you are eligible  for a tax
      credit of up to $72O for the first dependent and $1,44O for two or
      more dependents.

      b- The credit  will be  a percentage  of your expenses,  with your
      income being the basis for the adjustment.

      c- The credit  will apply to expenses paid for  employment-related
      circumstances such as,  the expenses for  people to care  for your
      dependent(s), providing household chores (cleaning, cooking etc.)


