Before you start thinking there might be a piece of land or a house out there that you forgot you owned, let’s define “property”in terms of locating unclaimed property. Unclaimed property is considered an account held by a financial institution or company that has had no activity generated nor any contact with the owner for a year or more. This could be contents of a safe deposit box, bank accounts, stocks, bonds, unclaimed wages and uncashed checks, CD’s, trusts, utility deposits and the like. There are billions of dollars of unclaimed property being held in this country by states on behalf of the owners.

How Does Property Get Lost?

You might be wondering how unclaimed property gets lost in the first place. Financial institutions generally do not forward mail, so if you move, and forget to notify your bank, you won’t get notices and may forget about your account – especially if it’s just a CD or small savings account. Some funds, people don’t even realize they have, like deposits paid for utilities that don’t get returned when you close your account. Poor record keeping also plays a part in forgetting about money and accounts, such as not writing down a safe deposit box number.

Where Does the Unclaimed Money Go?

Once a financial institution can not locate an owner of an account or deposit box, the funds are turned over to the state where the account owner resided at the time the account was open. Each state has an office of unclaimed funds. The treasurer and officers work to find the owners of accounts/funds and are regulated by rules set by the National Association of Unclaimed Property Administrators. The rules are in place to protect the account owner. Money never reverts back to the bank or corporation that originally held the funds. States will hold onto the unclaimed funds indefinitely and claims for the funds can be made at any time, even by heirs.

How Do You Claim Funds?

The National Association of Unclaimed Property Administrators (NAUPA) suggests using a computer and searching MissingMoney.com or your state database, or the database of any state where you have lived. If you have a common name the more detail you can provide, the better. If one does not have access to a computer, you can contact your state unclaimed property office. Once you’ve located unclaimed funds you can begin the claim process. You must first file a claim and secondly be able to prove your identity. Once a claim is successfully filed, funds can be returned anywhere from 2 to 14 weeks.

If I Don’t Find Anything Does that Mean I Have No Unclaimed Funds?

Databases are updated and maintained regularly. Remember, property has to go for one year without any contact from the owner before it is considered unclaimed. It’s always a good idea to check back periodically to see if any funds have turned up in your name. The NAUPA suggests checking back annually once you have done an initial search for unclaimed funds.  You never know when you might get some free money.

photo credit: nirbhao

Most banks and credit unions today offer their customers the option of accessing their accounts on line. If you have not set up your current checking account for on-line banking what you are you waiting for? Most people find online checking and banking to fit most of their banking needs. Here is a look at the pros and cons.

Pros of Online Checking

• You will have access to your account information 24 hours a day 7 days a week.
• No matter where you are, as long as you have internet access you can log onto your checking account using your bank or credit unions secure website.
• Most times when you perform on line checking transactions, they are processed quicker than those at the atm.
• You will be able to not only manage your checking account on line, but also access all of your other accounts you have with your bank including checking, savings, CD’s, IRA’s and more.
• You can use on line bill pay to pay your bills directly from your checking account.
• Directly from your on line checking account you can import data into a personal finance program like Quicken or Microsoft money.
• You can view your current checking account balance and transfer money between your different accounts.
• You can easily track expenses.
• Using on line checking is a time saver. There is no more waiting in line at your local bank to have access to your account.
• You will notice fraudulent activity sooner, rather than later.

Cons of Online Checking:

• It may take you some time to navigate and learn your banks on line site. Initially it could take you some time to learn how the site works and how to manage your on-line account.
• You will still have to visit your local bank to make deposits. Of course any direct deposits you have set up will show up automatically.
• You will, like with all advances in technology lose some of your human contact.

Many people additionally tend to worry about how secure on-line checking and banking really is. For the most part you can be assured your money is 100% safe. Of course there are some precautions that you can take to ensure that your money is always protected. First, make sure that you check your account on a regular basis, at least once a week. Never, under any circumstance provide any of your on line banking information in an email or a chat room on line. Also, it is never a good idea to access your account and make transactions from a cyber café or other public Wi-Fi areas. If you expect any fraudulent activity do not wait, immediately contact your bank or credit union and report it. Finally, make sure that your computer is always protected with the use of a good antivirus program.

The best way to find out if on line checking is right for you is to open your on-line account and give it a try. You really have nothing to lose.

photo credit: brunosan

Choosing a financial planner can be the single most important decision in your life.   Don’t believe me?  Ask anyone that was a client of Bernie Madoff’s and you’ll see the importance behind it.   To give those victims some credit, it’s tough to know when someone is an outright crook and liar.  Just like those people, many others don’t take enough care in selecting their advisor.

MarketWatch.com senior columnist Chuck Jaffe sometimes speaks to audiences on this topic, and when he does, he likes to conduct an informal poll. First, he asks people to raise their hand if they have ever worked with a financial advisor. Many hands go up.

photo credit: killthebird

Next, he asks these people to keep their hands in the air if they hired the first financial advisor they met with in their search. Few if any hands are lowered. Then he asks them to keep their hands up if they did a background check on that person before agreeing to work together. After asking that question, Jaffe writes, “I have never had a single hand stay in the air.”

How Credible Are they?

When it comes to the “alphabet soup” of financial industry designations, some of them carry more clout than others. Some of the most respected professional designations are Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC) and Chartered Financial Analyst (CFA). These designations are earned only after thorough examinations and a required curriculum of college-level studies in financial planning applications, retirement, insurance and estate planning fundamentals and other topics. Real-world experience must also complement this course of study.

Beyond a financial professional’s credentials and designations, you have the matter of compatibility. You don’t want to work with someone who insists that you fit into a preconceived box, for you are not simply Investor A, Investor B or Investor C who deserves this or that generic strategy. Better financial professionals really get to know you – and they will not be offended if you make the effort to get to know them.

This is a relationship-based business, and when a financial consultant offers a thoughtfully considered, personalized strategy to a client resulting from one or more discovery meetings, he or she has taken a step to earn the respect and trust of that client. Finer financial professionals abide by a client’s preferences and risk tolerance and take the client’s values, needs and priorities into account.

Background Check on Your Financial Advisor

You can visit www.finra.org (the Financial Industry Regulatory Authority) and use FINRA BrokerCheck to see if anything questionable has occurred in their career. If that financial professional is an investment advisor, you can go to the Securities and Exchange Commission and look at that advisor’s Form ADV at advisorinfo.sec.gov. Part 1 will tell you about any issues with clients or regulatory agencies; Part 2 will tell you about the advisor’s services, fees and investment strategies.

In addition, AARP offers you a Financial Adviser Questionnaire, and websites like abika.com, paladinregistry.com and advisorbackgroundcheck.com can provide you with further information.

In a long-term struggling economy, every penny counts.  There are a number of financial fees you could be paying that are unnecessary.  Why pay a bank to save your money?  Why let excessive credit card fees eat the payments you send them?  Here are some financial fees to avoid and keep more of your hard earned money in your own pocket:

photo credit: Horia Varlan

Credit Card Fees

If you must carry credit cards, at least take the time to choose the ones that can financially benefit you.  Avoid credit cards with annual fees.  Why should you pay $39 or more to carry a card in your wallet?  The only exception to this rule is if you are part of a rewards program where your rewards consistently give you more than what you pay for the annual fee to get those rewards.

Keep an eye on your credit card interest rate and on credit card offers your receive.  If you have the opportunity to transfer your balance to another card for a lower interest rate, consider it.  The only time it doesn’t make sense to move the balance from a higher interest credit card to a lower interest credit card is if the balance transfer fees are excessive (and will wipe out any savings you may have gotten from the lower interest rate;) or if the new card’s interest rate is only temporary and will then increase higher than the interest rate on the credit card you’re currently using.

Ideally, you would avoid using credit cards completely and avoid all finance charges and interest on your purchases.  If you can make the switch to using a debit card or paying for everything with cash, you will probably find you save more money and spend less than you do when using credit cards.

Banking Fees

Most people find they need a checking account and a savings account in order to properly manage their finances, but you have options.  You can select your banking institution based on the fees they charge (or rather, the ones they don’t charge!) to ensure more of your money stays in your accounts and less goes to the bank.

Many overdraft fees can be avoided by opting out of overdraft protection, or by connecting your savings account to your checking account so that if you overspend from checking the bank can automatically pull money from savings to cover the difference.  Another way to avoid overdraft fees, which can range from $25 to $40 per item overdrawn at most banks, is to keep a buffer of money in your checking account that you don’t plan to spend.  You could deposit an extra $100 that you don’t add into your balance in your check register – so that if you make a mistake and overdraw your account, you have up to $100 to cover the transaction(s).  Just make sure if you do end up using that cash reserve that you remember to replace it for the next time!

Choose bank accounts without monthly maintenance fees.  There are so many institutions offering free checking accounts that it doesn’t make sense to pay each month for the privilege of having your account at a specific bank.

Filing an unfiled tax return or even multiple years of unfiled tax returns may not be as big of an issue as you may believe. It may not be that big of a deal even if you cannot pay the taxes that you owe. The longer you wait the bigger issue it becomes. The consequences may get worse. The thing to be aware of is that the sooner you file your taxes the better off things are going to be. No matter how you look at it, the longer you wait the more harsh the consequences may end up.  Here’s what happens when you don’t file your tax return.

photo credit: istolethetv

Need a high yield savings account to help pay for your taxes? Consider opening a savings account with Discover Bank, offering 5 times the national average.

Consequences of Not Filing a Tax Return

Many people don’t file their taxes simply because they cannot pay the bill.  It is important to know that the penalties for not filing a tax return grow much faster than those penalties for not paying it.  Even if you are owed money on your return and you have not filed, the IRS can deny you a refund on those amounts if enough time passes.

Below are some penalties the IRS will charge for unfiled and unpaid taxes:

• Failure to File Penalty – This is the steepest penalty the IRS will charge for someone who owes taxes and did not file.  The penalty is 5% of the total balance for each month that has passed since due.  This penalty can be up to 25% of the total balance.
• Interest “Penalty” – The interest on unpaid balances is 4% annual interest on unpaid balances. Interest is updated on a quarterly basis, so depending on when you are reading this it may be a bit more or a bit less than 4%.
• Failure to Pay Penalty – This penalty is 0.5% of the total balance for each month that has passed since the balance was due.

From above, it is easy to see that it is very important to file unfiled returns even if you cannot pay since the failure to file penalty is adds up the quickest.  The IRS can also fine taxpayers up to $25,000 and 1 year in prison for each unfiled tax return.  The IRS does not commonly do this, but they do have the laws in place and use it more as a scare tactic.  They really seem to like to use celebrities as examples when they actually do enforce them.  One good thing to know is that it is extremely unlikely for the IRS to prosecute anyone whom willfully files old tax returns.  They want your money, not you (unless your last name is Capone or ends in a vowel)!  Please note that Greithner ends in a consonant!

How to File Unfiled Tax Return

It is important to remember that when filing “unfiled” tax returns, filing sooner rather than later will reduce any penalties and interest you may be required to pay.

Below are some steps to follow from gathering required tax documents to paying taxes owed:

1. Required Documents – When you are filing old tax returns it is important to get the proper documents together that are required.  You must obtain old W-2′s and old 1099 tax documents.  If you can’t find the required documents you can ask your old company for the documents.  If you cannot obtain the documents for you old company it is likely that the IRS may have them since it is required by law for your old company to report your earnings to the IRS.  You can contact the IRS by calling 866-681-4271.  If you still cannot obtain what you need then you can use a substitute W-2 to estimate what your W-2 would have been.
2. Get Tax Forms Prepared – Whether you are going to prepare yourself or have a company file for you it is important to get the returns for the specific years you missed.  Even if the IRS has already prepared a tax return on your behalf it is very important that you re-file this because the IRS gives no deductions.  It is very likely that you will owe much less or get more back if you do this.
3. File Your Returns – When sending in your returns you should send to the normal address that tax returns are sent to unless you received a notice from the IRS requesting you to file back taxes.   Then you should send to the address on that notice.
4. Pay what is owed – Before you can be back into full compliance with the IRS you must pay the taxes owed, enter into a payment plan or settle your taxes in some other way.  If you are going to pay in full you can pay electronically, send a check, pay with a money order, send a cashier’s check, or pay cash. The IRS contains more information on electronic payments options on their website. If you want to pay in cash you must go to a local office and pay in person, cash must not be sent through the mail. If you cannot pay in full please read below for more options.

What to do if you cannot pay

Many times when an individual has not paid taxes for one year or more, they owe more taxes than they can afford to pay at once.  The IRS has setup various options for taxpayers to pay back their taxes if they cannot afford to pay.  Below are some of the most common methods used by taxpayers that cannot afford to pay in full.

• Installment Agreement – An installment agreement is probably the most common form of payment plan used to pay back taxes.  With an installment agreement taxpayers can pay back taxes owed in monthly installments for a period up to 60 months.  This allows taxpayers to make smaller more manageable payments.
• Offer in Compromise – An offer in compromise is a tax settlement program that allows taxpayers to settle their taxes owed for less.  In order to file for this the taxpayer must be in full compliance with their tax filings and there must be doubt to the liability, or doubt to the collect-ability. What that means is there must be doubt as to the total amount of taxes being owed, or the IRS does not ever expect to be able to collect the amount of taxes owed from the taxpayer.  This tax filing is very complex and is rarely accepted by the IRS.  The IRS tries to only let the most deserving tax payers receive this kind of relief.
• Get Declared Uncollectible – This is not an actual way to pay the IRS what is owed but it does buy time in order to come up with funds to pay.  You can get declared uncollectible when you prove to the IRS that you can’t pay your taxes owed and you will not be able to pay in the near future.  When this happens the IRS puts a hold on collecting taxes and they will check back every year or two for an update on your financial situation to determine if they can collect.

What happens when you are filed and paid

After you have filed and paid your taxes you will be considered in good standing with the IRS.  Always remember, it is never too late to file your taxes.  In fact, the sooner you file the better.  With today’s technology there is very little chance of getting away with not filing a tax return.  The IRS is slow and sometimes not very efficient, but they are ruthless and persistent.   To avoid or reduce IRS penalties and interest it is always best to try to stay in full compliance and resolve any problems as quickly as possible.

When it comes Chrysler the hedge fund managers were asked to take one for the Obama team.  Fortunately, for their investors they did their job, as they should have, and took one for their own team!  Hedge funds hold approximately $1 billion in Chrysler bonds.  It was those hedge fund managers that refused the government’s offer to take approximately thirty cents on the dollar.  Obama turned around and accused them of holding out “for the prospect of an unjustified taxpayer-funded bailout.”  The only things “unjustified” in this case are taxpayer-funded bailouts to begin with and for a U.S. President to criticize financial business managers for doing their job!

Financial Industry Outraged and Fearful

Many in the hedge fund industry have been outraged but not many have spoken out publicly. There are even questions about whether the Obama administration threatened to ruin them if they did not agree to his plan.  The industry is genuinely afraid in the face of Obama’s power.  

Cliff Asness, whose firm manages some $20 billion of assets, has written an open letter blasting President Obama for his attack on the hedge fund industry in the wake of the Chrysler bankruptcy wrote the following in an open letter:

• “Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing.”
• “The President screaming that the hedge funds are looking for an unjustified taxpayer-funded bailout is the big lie writ large. Find me a hedge fund that has been bailed out. Find me a hedge fund, even a failed one that has asked for one. In fact, it was only because hedge funds have not taken government funds that they could stand up to this bullying. The TARP recipients had no choice but to go along.”
• “The President’s attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him. Why is he not calling on his party to “sacrifice” some campaign contributions, and votes, for the greater good?  Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power.”

He admitted himself he was “fearful writing this”.  Clifford Asness is exactly right!  “It is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can”.  For more on Cliff Asness (click here)

We Still Live in the USA

Why, in the United States of America, should anyone be afraid of the government  for doing their job legally and properly or worse yet be afraid to express their honest opinion?  Isn’t that and legalizing marijuana what liberals fight for?  Something is drastically wrong.

In a historical move President Obama removed the CEO of General Motors for not doing his job!  Never in U.S. history has the President of the United States removed a CEO from a publicly held company.

Simple Business Question: “What are you here for?”

An Investment Managers obligation is to his investors.  If you ask someone working for Chrysler or GM the simple question, “What is Chrysler or GM here for?”  Many would say “to build automobiles”.  Wrong!  Wrong!  Wrong!  It is to make money!  Building automobiles and selling them is only a means of making money; exactly the same as any other business; exactly the same as an investment manager or hedge fund manager.  Their job is to make money.

By not yielding to the Presidents threats these hedge fund managers are doing their job!  If any of these hedge fund managers yield to the Obama pressure they should not only be fired, but they should be prosecuted for theft.  If my investment manager accepted such a deal I would be pursuing the real law, not Obama’s.

That is not a threat to my Investment manager!  It is a damn promise!!!

This is still the USA!!!  At least for now!!!  Papa B.