Planning Potpourri


o What should your child be doing before heading off to college? If your child is 18 he or she should sign a durable power of attorney to authorize a parent (or other responsible adult) to handle financial or legal matters if necessary. A simple standard form for your state is probably sufficient. Have him or her sign a health care proxy.  Get your child a credit card now and teach them how to use, not abuse it. Too often college students are bombarded with credit card offers that result in them racking up debts they can ill afford. Copy your child's wallet before they go and keep it in a secure place. If your child looses his or her wallet you'll have the information to help. Teach your child how to keep and reconcile a check book. Best Bet: buy your child a computer software program like Quicken and encourage them to use it now. This will set a great foundation for future financial skills. Don't let your child forget to file an income tax return for their summer job. Best Bet: Match your child's summer wages so they can painlessly contribute their earnings to a Roth IRA and begin a lifelong pattern of savings. The amounts may be small but the lessons invaluable.


o Track Passwords, Usernames, and More:

The proliferation of on line activities: banking,  bill paying, purchases, organization memberships, professional societies, and more, makes it impossible to remember all passwords and usernames. How can you remember them all? How will anyone be able to find this information to help you if you are absent or ill? What if you're uncomfortable recording them on an Excel spreadsheet in case your laptop is lost? Here's an approach that meets the KISS principal (keep it simple stupid). Print each web page when you next use it. This will have the web address, the name prominently listed and other data. Note the password and user name on the copy. File them in a loose-leaf binder with alphabetical index tabs organized by website, vendor or company name.  Store them in a secure place your family knows about.


o IC-DISC: If your corporation has set up an IC-DISC to capture the differential between ordinary income and low dividend tax rate, and you've engaged in comprehensive estate planning, be sure to have your estate planner, as well as your corporate attorney, review the contract between your corporation and DISC. If you have to broad a right turn the commission payments to the DISC on and off there could be significant gift and estate tax implications if you try to gift DISC stock to heirs.

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