Consumers Can Shop Smart and Save This Back-to-School Season

Columbus, Ohio (July 27, 2017) Even though summer has just begun, pretty soon it’ll be time to focus on the school year ahead, and if your family is like most, you’re already thinking about purchasing school supplies for the upcoming year.

Back-to-school shopping is the second-largest consumer spending category after holiday shopping, according to statistics from the National Retail Federation and Research Now. An additional survey, conducted by Deloitte, found that 32 percent of families expect to spend more on school supplies this coming year, either because their children need more items, materials are increasing in price, or students need more expensive supplies.

Back-to-school expenses seem to climb every year and can be a strain on family budgets. In a 2016 survey conducted by the National Retail Federation, back-to-school spending has increased 55 percent over the past 10 years, with the average family spending $107.76 on school supplies. Combined with other expenses, such as clothing and accessories, electronics, and shoes, a family could end up spending an average of $674 on back-to-school shopping.

Despite rising costs, back-to-school shopping doesn’t have to be a budget-buster. A little pre-planning and early shopping can help you avoid extra spending. Nationally, 73 percent of back-to-school shoppers plan to shop a month to three weeks before the start of school.

Here are some ways you can shop smart during the back-to-school season:

Timing Matters: Look for end-of-summer sales and tax-free holidays, especially on big ticket items where you’ll really feel the savings. In Ohio, the tax-free holiday starts on Friday, Aug. 4, 2017, at 12:00 a.m. and ends Sunday, Aug. 6, 2017, at 11:59 p.m. To learn more about this tax-free holiday weekend, visit the Ohio Department of Taxation website.

Plan Ahead: Before making new purchases, take an inventory of supplies you already have around the house. From there, make a list of items still needed. Two-thirds of consumers are likely to buy more than what is on their list, so be sure to stick to your shopping plan.

Avoid Fancy Supplies: Instead of spending money on the brightest, shiniest, and glitteriest supplies with a licensed logo, which adds to the cost, make them “Do It Yourself” art projects for your kids to decorate.

Use Technology to Bring Deals to Your Inbox: Let technology save you money by doing an online coupon search, monitor your favorite stores’ social media accounts to get advance notice of sales, and sign up for coupon links.

Stock Up: If you see a good deal on supplies you know will be an ongoing need, stock up so you’re ready when something runs out, gets lost, or breaks.

To learn about credit unions in your community and how they can help you plan for the back-to-school season, visit www.aSmarterChoice.org.

Source: Kimberly Stewart • Manager, Public Relations
Ohio Credit Union League
10 W. Broad St., Suite 1100 • Columbus, OH 43215
T: 800-486-2917, ext. 248 • D: 614-923-9748
www.OhioCreditUnions.org

Why Financial Literacy Isn’t Just One Person’s Responsibility

Columbus, Ohio (June 26, 2017) Although most would agree it’s important for people to learn (preferably early) the life skills that set them up for financial success, studies consistently indicate Americans are generally not sufficiently educated about their personal finances.

Respondents in the Ohio Credit Union League’s 2016 end-of-year consumer survey strongly agree that financial literacy is essential to a child’s education. On a scale from one to five (where five is “extremely important” and one is “not important at all”), parents ranked the importance of teaching their children about finances an average of 4.6. Without a doubt, parents recognize how essential a formal financial education is for their children.

That said, when respondents were asked about how they received their financial education, an overwhelming 62.6 percent stated that they learned from experience or life lessons. Despite the widely-accepted belief that parents should play a part in teaching their children financial literacy, only 20.6 percent indicated they received financial education from their parents.

The overwhelming demand for financial literacy training and simultaneous lack of access for Ohio consumers aligns closely with national trends. And when parents fail to educate their children about finances, schools don’t always fill the gap. While the demand for financial literacy courses in high school is nationally apparent, the Council for Economic Education says only 17 states (including Ohio) require students to take classes in personal finance.

In a survey by the National Financial Educators Council about which high school-level course would have benefited participants the most, 54.1 percent stated a money management class would have been the most useful.

Despite a lack of formal education opportunities, there is a multitude of easy, convenient resources parents can leverage to put their children on the path to financial health.

  • Start now and involve the family: There is a lot of information to increase personal financial literacy that is appropriate for all ages and levels of wealth. Start now, right where you are. Use age-appropriate activities, including games and challenges to make it fun for kids, and get the whole family better educated about finances.
  • Find a personal finance app: Using a personal finance app is an easy way to put money management at your fingertips and help you stay on track with your financial plans. There are many no- and low-cost apps available to help you budget, invest, or pay bills automatically.  Check the user reviews to see what aligns best with what you’re looking for in a financial tool.
  • Take advantage of online resources:  The U.S. government sponsors www.mymoney.gov, which is dedicated to teaching the basics about financial education, including topics like buying a home, balancing a checkbook, or investing in a 401(k) plan. Additionally, with free credit union-funded resources and tools from MoneyAndStuff.info and bizkids.com, the “money talk” is the easiest talk to have with kids.
  • Consult your financial institution: According to OCUL’s survey, only 5 percent of participants received formal financial education from financial institutions. However, a majority of Ohio credit unions offer structured financial literacy programs like classes and counseling, and all of them can be counted on for trustworthy advice.

To learn about credit unions in your community and how they can help you afford life, visit www.aSmarterChoice.org.

About The Ohio Credit Union League
With offices in Columbus, is a state trade association representing 290 credit unions. Credit unions are not-for-profit financial institutions owned and democratically-controlled by their members. Ohio credit unions provide savings, loans, and other consumer financial services to 2.81 million members. To learn more, visit www.aSmarterChoice.org.

Source:
Kimberly Stewart
Manager, Public Relations
Ohio Credit Union League

10 W. Broad St., Suite 1100 │ Columbus, OH 43215
T: 800-486-2917, ext. 248 │ D: 614-923-9748
www.OhioCreditUnions.org

Do Women Face Greater Retirement Challenges Than Men?

If so, how can they plan to meet those challenges?

By Rebecca Bar-Shain, CFP®, Cedar Brook Group

Why are women so challenged to retire comfortably? A woman may spend less time in the workforce during her life than a man due to childrearing and caregiving needs with a corresponding interruption in both wages and workplace retirement plan participation. A divorce can hugely alter a woman’s financial outlook. As women live longer on average than men, they face the risk of eventually outliving retirement savings. There is also the gender wage gap, narrowing, but still evident.

What can women do to respond to these financial challenges?

Invest early & consistently Women should realize that on average they may need more years of retirement income than men. Social Security will not provide all the money they need. Accumulated retirement savings will need to be tapped as an income stream. So saving and investing regularly through IRAs and workplace retirement accounts is vital, the earlier the better. So is getting the employer match, if one is offered. Catch-up contributions after 50 should also be a goal.

Consider HSAs An HSA (Health Savings Account) is funded with pre-tax dollars, so an HSA owner can potentially get tax-deductible contributions as well as tax-free growth and tax-free withdrawals. HSAs are used with high-deductible health plans and HSA savings must be withdrawn to pay for qualified health expenses in order to be tax-exempt. One intriguing HSA detail: after attaining age 65 an HSA owner can withdraw HSA funds for non-medical expenses (these types of withdrawals are characterized as taxable income). That fact has prompted some journalists to label HSAs “backdoor IRAs.”

Work longer in pursuit of greater monthly Social Security benefits Working even two years longer means two years less of retirement to fund and for each year she refrains from filing for Social Security after age 62, her monthly Social Security benefit rises by about 8%.

Find a method to fund eldercare Many women are going to outlive their spouses. While many women may not need months of rehabilitation, in-home care or hospice care, many other women will.

Today, financially aware women are planning to meet retirement challenges. They are conferring with financial advisors and strategizing to take greater control over their financial futures.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Rebecca L. Bar-Shain, CFP, MBA, Financial Planner & Partner
Cedar Brook Group
440.683.9258
Cleveland, Ohio 44124

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Women’s No. 1 Thought is Money More Often Than Men

LOS ANGELES / PRNewswire/ – Women are less scared than men about losing their jobs, according to new survey data from leading personal finance website GOBankingRates.com. In their just released 2015 Life + Money survey, GoBankingRates.com discovered the biggest money challenges and fears men and women have today.

• 1 in 5 people say their biggest money challenge is sticking to a budget.
• Always living paycheck to paycheck is the No. 1 financial fear of Americans today,  followed by living in debt forever.
• 20% of Americans say planning for retirement is their primary financial focus.

“We want to help Americans understand how to process their financial concerns and prioritize goals, especially as it relates to their various life stages,” said Casey Bond, editor-in-chief of GOBankingRates.com. “Our studies show younger generations think differently about money and debt than their parents and grandparents, but the common theme is all types of people need some level of assistance with financial planning. This data offers insights for men and women of all ages that can help them change how they think about money for the better.”

  • Millennials Vs. Boomers*

    • While older millennials’ (25-34) No. 1 daily thought is money, younger millennials (18-24) ponder most about their love lives, and boomers think most about work.
    • Planning for retirement is five times more challenging for baby boomers than it is for young millennials (34% vs. 7%).
    • Baby boomers are almost three times more afraid of never being able to retire than young millennials (24% vs. 9%) and twice as likely to be afraid of having their identity stolen.
    • Young millennials are twice as afraid of always living paycheck to paycheck as baby boomers.

  • Men Vs. Women
    • Women’s No. 1 thought is money more often than men.
    • Men are more afraid than women of losing money in the stock market, losing their jobs and not being able to retire.
    • Women are more fearful of always living paycheck to paycheck than men (25% vs. 18%).
    • Planning for retirement is more of a financial challenge for men than it is for women (20% vs. 17%).

The complete 2015 Life + Money survey findings are presented in whitepaper format as well as an infographic, click here.

Screen Shot 2016-01-25 at 10.25.06 AMRead more here http://www.gobankingrates.com/retirement/2015-life-money-survey-look-americans-biggest-financial-struggles/

* For this survey analysis, young millennials were defined as adults ages 18-24; older millennials were defined as adults ages 25-34; and baby boomers were defined as adults ages 55-64. These are the ranges provided by Google Consumer Surveys.

6 Best Practices to Protect Your Confidential Information

Presented by Jonathan S. Merckens, CFP ®

Although there is a vast amount of technology available that is designed to safeguard your devices and personal information, that information is still vulnerable to cyber criminals and identity thieves. In fact, security breaches are not always due to a weakness in technology control. Sometimes, they are the result of the action or inaction of the user—you! Therefore, you are one of the best lines of defense against cyber crime.

As October is National Cyber Security Awareness Month, it’s the perfect time to implement the following information security best practices to do your part in keeping your personal information safe and secure.

1) Build strong passwords

It’s important to create strong passwords for all of your online accounts. But what exactly does this mean? A strong password:

  • Contains both uppercase and lowercase characters, as well as digits and punctuation
  • Is at least eight characters long
  • Is not a word in any language, slang, dialect, or jargon
  • Is not based on personal information, names of family members, and so on

A good rule of thumb is that passwords should be hard to guess but easy to remember.

2) Use multifactor authentication

A user ID and strong password alone are not sufficient protections for securing web accounts. Multifactor authentication—one of the simplest and most effective ways to secure your data—adds an extra layer of protection. With multifactor authentication, users must provide two forms of identification in order to log in to a site.

Here’s how it works: After a user enters a user ID and password, the website will send a passcode to the user’s mobile device. He or she must then enter this code on the site, ensuring that only that individual can sign into the account.

3) Be suspicious of unsolicited e-mail

Be wary of any e-mails that convey a sense of doom and gloom (e.g., threatening to close an account) or that claim immediate action is required. Grammar mistakes, spelling errors, and generic salutations are also red flags. Perhaps most important, scrutinize those e-mails that contain links and attachments from sources you don’t know (and, unfortunately, even from sources you do know). It’s quite easy for cyber criminals to craft a legitimate-looking e-mail in the hopes that you’ll be fooled into thinking it came from a company you do business with or from a friend. To protect yourself from this scenario, don’t hesitate to verify: Call the source directly to authenticate from whom it was sent it; if it came from a company you know, go to the company website directly to log in.

4) Protect your mobile devices

Outdated software can leave your mobile devices open to security vulnerabilities. By keeping your apps and mobile operating system software up to date, you can mitigate the risk of a cyber criminal exploiting a hole in your system. Most devices simplify this process for you by offering automatic update options for apps, as well as notification systems that let you know as soon as an operating system update is available. It’s your job to take care of these updates immediately!

Another mobile device necessity is to do your homework, making sure the apps you’re downloading are from a reputable company (e.g., by checking their ratings and comments). Be sure you know what the app does and what information it’s going to access on your mobile device.

5) Engage in safe web browsing

Keeping your browser up to date is critical in preventing malware. Just like apps and your operating system, an out-of-date browser can open up security gaps that cyber criminals will take advantage of. Be alert to pop-ups and advertisements: Both could be spyware used to plant tracking cookies on your machine, which can steal your information, direct you to bogus phishing sites, and pummel you with pop-ups.

When transmitting personally identifiable or payment information, you can ensure that you are on a secure site by checking for the “https://” before the “www.whateversite.com.” When on public Wi-Fi networks, consider connecting through a personal virtual private network (VPN) and disable auto-connect; this way, your device won’t automatically connect to found public networks.

6) Stay vigilant

Although advanced technology today is certainly a safeguard and buffer to keep cyber criminals at bay, it’s critical to remember that you are in the first line of defense to keeping your data safe and secure.

For more tips and tricks to stay safe online, visit the National Cyber Security Alliance at www.staysafeonline.org.

© 2015 Commonwealth Financial Network®

Contact Jonathan at (440) 638-4757 or
Jonathan@GrahamAssoc.com

Tax Saving Strategies For Your Business

By Dawn J. Hryshko, CPA

Many taxpayers dislike the dreaded tax filing season; but there is a way to prepare, and possibly minimize, the taxes you pay.   Below is a list of some tax saving strategies that may reduce your 2015 taxes.

  • The 2015 auto mileage deduction is 57.5 cents per mile for business travel. A company-owned vehicle may produce a greater tax benefit due to depreciation and actual expenses associated with the vehicle. There are limits for personal use of company owned vehicles that should be considered before determining which method would be most beneficial.
  • Timing of revenue recognition and expense deductions. Cash basis taxpayers can prepay expenses before year-end that pertain to the next year and obtain a tax deduction this year. Likewise, services rendered in December can be billed in January to push income into the next tax year.
  • If you work from home and do not have another location to work from, you can take a tax deduction for business use of your home.
  • Pay family members who are in a lower tax bracket for work performed in your business.
  • Establish a retirement plan for your business or increase your pre-tax contribution to an employer-sponsored plan.
  • Contribute the maximum to your HSA.
  • Maximize the Section 179 expense deduction for purchases of ‘new’ property used in your business.
  • Properly classify business meals between what is 50% deductible and what is 100% deductible.
  • Shift itemized deductions to business deductions.
  • Maximize the use of business gifts.
  • Use of tax credits when applicable.
  • Contribute to a 529 plan and receive a $2,000 deduction per beneficiary on your Ohio tax return.
  • Utilize the Ohio Small Business Deduction.

Every tax situation is different. Consult your tax advisor to learn whether any of these items may benefit your tax situation.

Hryshko & Associates was established as a full service boutique CPA firm catering to the sophisticated needs of our clients. We strive to strike the perfect balance between small, local, attentive service and professional experience and expertise.

Dawn Hryshko, owner, has over 25 years of tax and business consulting experience with both public, privately held, and family-owned entities. She was the Tax Director of a multi-billion dollar real estate company based in Cleveland, Ohio. Dawn spent 19 years in Public Accounting , starting at a Big 8 firm in Cleveland, where she specialized in tax consulting for businesses in the real estate and construction industries. Dawn also served on many boards and committees throughout her career while being a dedicated mother of four children.

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What Type of Tax Professional Should You Work With?

By Dawn J. Hryshko, CPA

Although there are several professionals that may prepare tax returns, there are varying levels of expertise and differences in capabilities that should be considered. Before you pay for tax advice and services, ask the advisor about their credentials and abilities as it relates to potential tax benefits and penalties to meet your specific goals.

Who do you currently work with?

  • A tax preparer
  • An enrolled agent
  • A certified public accountant (CPA)
  • A tax attorney

A tax preparer can be anyone you know. Yes, even you can be a tax preparer! There is no formal education required and no federal governance to ensure a tax preparer has the qualifications to prepare tax returns for others. Most big box tax preparation firms fall into this category.

An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service with no minimum education requirements. Enrolled agent status is the highest credential the IRS awards to a person who either passes a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.

Individuals who obtain this status must adhere to ethical standards and complete 72 hours of continuing education courses every three years. Enrolled agents, like attorneys and CPAs, have unlimited practice rights; which means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before.

A Certified Public Accountant (CPA) is required to obtain a bachelor’s degree in accounting (which equates to 5 years of college) and pass the CPA exam. Each state governs the requirements for passage of the CPA exam; however, a CPA may work in every state with one license, which helps the taxpayer since the CPA should be well versed in that state’s tax laws as well. Once the CPA certificate is obtained, the CPA must obtain 40 hours of continuing education every year thereafter in order to maintain their license. Many CPAs obtain a Masters in Taxation which enhances their knowledge of tax laws and regulations.

A CPA will not only prepare and file tax returns directly with the IRS, but will also implement tax planning strategies to minimize future taxes, including retirement planning, estate planning, education planning, and business planning. CPAs can be well versed in several areas of taxation and tax law, or may focus on a specialty.

Like CPAs, a tax attorney requires a stringent amount of minimum education requirements and ongoing tax law education, where some even obtain the CPA. They must earn a bachelor’s degree, plus complete law school to obtain a JD, and pass the bar exam. Passing the bar exam means the candidate can practice law in that state only. While some states have transfer agreements, lawyers may need to pass the bar exam for every state in which they intend to practice. An attorney must obtain continuing education in order to maintain their license, which is determined by the state in which they hold their license. Law school graduates may consider enrolling in a 1-year (Masters of Law) LL.M. program in taxation in which they focus on a more specialized area of taxation, such as estate planning, rather than being a tax generalist.

While tax attorneys do not typically file tax returns, they can file lawsuits on behalf of their clients, including cases with the IRS and can represent clients on legal issues including collections, audits, appeals, and payment plans.

Each tax situation is unique. Interview your advisor and ask questions about their experience and credentials. Choosing the right professional will save you time, money and headaches while keeping you on track for your financial future.

Hryshko & Associates was established as a full service boutique CPA firm catering to the sophisticated needs of our clients. We strive to strike the perfect balance between small, local, attentive service and professional experience and expertise.

Dawn Hryshko, owner, has over 25 years of tax and business consulting experience with both public, privately held, and family-owned entities. She was the Tax Director of a multi-billion dollar real estate company based in Cleveland, Ohio. Dawn spent 19 years in Public Accounting, starting at a Big 8 firm in Cleveland, where she specialized in tax consulting for businesses in the real estate and construction industries. Dawn also served on many boards and committees throughout her career while being a dedicated mother of four children.

Screen Shot 2015-09-21 at 9.21.10 AMDawn J. Hryshko, CPA
Hryshko & Associates
330.220.2722
www.cleveland-cpa.com

5 Tips to Sell Your Home This Spring

deb holmBy Deb Holmstrom, Berkshire Hathaway Kovack Realtors

HERE ARE MY TOP TIPS FOR PREPARING A HOME FOR THE COMPETITIVE SPRING REAL ESTATE MARKET

1. Put A Plan In Place. Develop a plan of action before you sell your home. Are you planning on buying another home once your home sells? Do you have the option to move in with family? Can you rent, if need be? Can you buy before you sell?

2. Consult a Lender to Find your “Purchasing Power.” I would be happy to recommend local lenders committed to customer service.

3. Clean and Organize. Give your home a thorough “spring cleaning.” Clean out closets and pack away items you do not use. It’s important that you de-clutter and organize your home. Don’t forget to go the extra mile, wash your windows, dust your blinds, dust baseboard trim and clean appliances.

4. Interview Prospective REALTORS®. It is critical when selling a home that you interview a REALTOR®. As the weather warms up the top producing REALTORS® will only continue to get busier. Now is the time to start reaching out to the agents you think would be a
great representative to sell your home.

5. Be Proactive and Prepare. A licensed Realtor will help you prepare and navigate every step of the process. As a full time Realtor with Berkshire Hathaway Kovack Realtors, I am committed to meeting the needs of my clients while we travel through the process of buying and selling a home. I would love to meet with you and help you sell or buy your next home sweet home.

Berkshire Hathaway ad

What is One of The MOST Important DECISIONS You’ll Ever Make?

HEALTH INSURANCE. Your entire family’s well-being DEPENDS on it.

“Should I Buy Insurance From An Independent Agent?”

In 2015, everyone is required to have insurance. Many consumers do not realize they have choices that go beyond what is offered on the government website. Selecting the right health insurance is one of the most important decisions you will make this year. Many of the plans can seem like they are written in a foreign language and the information overload can make your head spin.

Roni Bell, a licensed agent with HealthMarkets Insurance Agency, can help you and your family shop for the best health insurance plan to fit your needs. Roni and her team have opened a beautiful new o“ffice centrally located in Brunswick to better serve her customers in Northeast Ohio. With over 15 years experience, she is able to design a healthcare solution to fit her customer’s needs and budget, as well as explain the ins and outs of each plan.

“Life Events Can Change Your Insurance Needs. My passion is to help individuals of all ages and income levels become savvy health consumers. Are you going through a major life changing event? Retirement, divorce, job loss… I would love the opportunity to sit
down with you and help you find a solution that is right for your health needs and budget.” – Roni

INFORMATION TO DISCUSS WITH AN INSURANCE AGENT BEFORE SELECTING A PLAN.

1. Identify the “must-haves.” You can’t foresee a sudden injury or illness, but some medical needs can be anticipated.

2. Know Your Budget. We can help you find the right balance of premium and deductible that will work with your budget.

3. Check the network. If you have a primary care physician and specialists you like, be sure they’re in the network of any plan you consider buying.

HealthMarkets handles all types of insurance, including:
• Health Insurance
• Medicare
• Life Insurance
• Dental Insurance
• Vision Insurance
• Disability Insurance
• Accident Insurance
• Critical Illness Insurance
• Cancer Insurance
• Annuity
• Long-Term Care Insurance
• Wellness Programs

Finding the Right Low-Cost Health Coverage Has Never Been Easier.

health markets

HealthMarkets Insurance Agency is the d/b/a of Insphere Insurance Solutions, Inc. which is licensed as an insurance agency in all 50 states and DC. Not all agents are licensed to sell all products. Service and product availability varies by state. HMIA000899

Inheriting Debt From a Family Member

Presented by Jonathan S. Merckens, CFP ®

When a loved one passes away, his or her outstanding debt (and how that debt will be paid) likely won’t be the first thing on your mind. Unfortunately, many people find themselves dealing with a deceased family member’s creditors as they grieve. While no one likes to think about a loved one’s passing, it makes good financial sense to consider these matters ahead of time.

Who’s responsible for outstanding debt?
Generally, the deceased person’s estate assets are used to satisfy creditor claims before assets are distributed to the beneficiaries. If the estate assets are insufficient to pay all of the outstanding debt, the estate is considered “insolvent,” and state law prioritizes the payment of the deceased person’s bills with the available assets.

In some cases, however, outstanding debts may not fall to the estate. For example:

  • Cosigned debts. If you’ve cosigned on a loan or credit card with the deceased person, you are financially responsible for that debt.
  • Guaranteed debts. Similar to cosigning, if you are the guarantor of a loan for someone who has passed away, you will owe the lender payment of any remaining debt.
  • Community property. If your spouse passes away, you may find yourself responsible for debts for which you weren’t a cosigner or coapplicant. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are considered community property or quasi-community property states, meaning that all property and debt acquired during a marriage is considered jointly owned. If you live in one of these states, you could be held responsible for debts your spouse incurred.

How are different types of debt handled?

  • Credit card debt. Again, family members are not responsible unless they cosigned on the credit card. Although debt collectors may be aggressive, they can only make a claim against the estate. If you did cosign, you will be held responsible for the debt, even if you didn’t directly incur it.
  • Medical debt. If your parent qualified for Medicaid, the state may try to recover the payments made for his or her care. The state cannot ask you to pay, but it may be able to put a lien on your parent’s home to recover the funds. If a family member dies with other unpaid medical bills (unrelated to Medicaid), those bills become an estate debt. Keep in mind that many states have “filial responsibility” statutes that, under certain circumstances, hold adult children responsible for a deceased parent’s medical debt. Be sure to understand how state law may apply in your situation.
  • Mortgage debt. If you inherit a residence with a mortgage, you generally aren’t required to pay it off immediately. If you fail to make the mortgage payments, however, or cannot sell the house for a price that will pay off the mortgage, the lender will likely foreclose (or possibly agree to a short sale). If you don’t wish to own the real estate, you may disclaim it, at which point it would transfer to the next estate beneficiary.
  • Student loan debt. Federal programs, such as Perkins and Stafford loans, usually offer cosigners forgiveness if the borrower passes away. Private loans may be another story, however. Although some lenders have started to discharge the debt if a borrower dies or becomes disabled, many demand the money owed from cosigners.
  • Taxes. The estate is responsible for paying any property, income, or estate taxes. Tax authorities are usually given top priority as creditors.

Don’t be bullied
Family members of deceased debtors—and all consumers—are protected by the federal Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices in attempting to satisfy a debt. Under the FDCPA, collectors can contact the deceased person’s spouse, guardian, executor, or administrator to discuss a debt, but you do have the right to control your interactions with these collectors. For more information, visit the Federal Trade Commission’s website at
www.consumer.ftc.gov/articles/0081-debts-and-deceased-relatives.

Know where you stand
Inherited debt can be a complex issue to sort out. If you find yourself in this situation, seek advice from your financial advisor and an attorney who can guide you through the probate process and work with any debt collectors. Although dealing with a loved one’s death is never easy, getting your questions answered and protecting your inherited assets may make the situation a little less stressful.

Jonathan Merckens is a financial advisor located at 11925 Pearl Road, Suite 403, Strongsville, Ohio 44136. He o ers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/
SIPC, a Registered Investment Adviser.

Contact Jonathan at (440) 638-4757 or Jonathan@GrahamAssoc.com© 2014 Commonwealth Financial Network®