Posted on 01/21/2014 7:30:26 AM PST by Kaslin
Dear Dave,
My husband has his own business installing windows. As a result, we now have IRS and state tax debt. Were managing the payments, but where should these debts be placed in the debt snowball plan?
Olivia
Dear Olivia,
I dont usually cheat on the smallest to largest progression of the debt snowball, but Id recommend moving these debts to the top of the list.
Both state and federal taxes come with ridiculous penalties and interest rates, and the authorities at either level have virtually unlimited power at their disposal to screw with your life if something bad happens. The IRS can actually take your money without suing you. So, you dont want to become a blip on their radar screen by being late with payments.
Get it cleaned up as quickly as possible, Olivia. You dont want to mess around with these guys!
Dave
Dear Dave,
My husband died eight years ago, and I never closed his bank accounts that were opened when we lived in another state. We lived in Florida before moving to Oregon. I didnt probate the estate, and he did not have a will. Im trying to work with the banks to get this settled, but theyre giving me the runaround. Do you have any advice?
Melinda
Dear Melinda,
The first thing you need to do is contact an attorney who handles estate planning. If the accounts were opened in Florida, but you both lived in Oregon at the time of his death, technically the estate would be probated in Oregon. That may be what has to happen. If so, a judge would appoint you as executor. As executor, you can close the accounts and disperse any money to the rightful heirwhich is you.
Be prepared, though. It may take somewhere between $250 and $500 in attorney fees and court costs to make this happen. If youre lucky, you might get a simple motion from the court that would cost you next to nothing. But find a good estate planning attorney who knows Oregon law inside and out. Estate laws and probate laws differ from state to state, and Florida and Oregon both have some weird laws in these areas.
This probably seems like a lot of trouble, but you have to remember the banks are simply trying to protect themselves and follow the law. Anyone could walk in with a death certificate (theyre public record), and claim to be an heir. So, they have to have a court document in order to avoid any potential liability.
Im sorry for your loss, Melinda. I know it still hurts after all this time, but you need to address this as soon as possible. Im sure its what your husband would have wanted.
Dave
Sorry, my reply was intended for another poster.
I agree with your second paragraph though. I’m all for a flat tax. I’m not on board with a Fair Tax until I would know how the transition would happen - would savers who got taxed as they saved then get taxed also as they spent?
NP, I do it all the time :)
The F.T., which is my 90% solution (currently), does has its flaws: No need to be 22% if we followed A1S8; no ‘prebate’ (’poor’ still need to pay for services); etc.
RE: Savers (still on the F.T.): Savings would only be taxed ONCE (upon any NEW purchase...another idea I love), since there would be no double-taxing (like today) [IE: the paycheck]
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