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Keep all your bank accounts active to avoid hassles
By HELEN HUNTLEY, Times Staff Writer
© St. Petersburg Times, published March 17, 2002
Q. I got a notice from an out-of-state bank where I have a certificate of deposit saying that my account could be considered inactive if I did not reply. The bank said the money would be turned over to the state. What happens to it if it is turned over? Can I get it back?
A. If a bank account is inactive for five years and the bank cannot locate the owner, the account is transferred to the state of Florida as "unclaimed property." It is still your money and you can reclaim it, but it's a hassle. It is better to keep your accounts from becoming inactive.
The best form of prevention is to make sure that every financial institution with which you do business has your correct mailing address. Then be sure to respond to notices such as the one you got. Depositing money, making a withdrawal or communicating with the bank in writing will keep your account active. Perhaps the last time your CD came due, you allowed it to automatically roll over for another term without communicating with the bank. That doesn't count as activity as far as the state is concerned.
If you discover the state has money belonging to you, or if you want to check to see if it does, visit the Department of Banking and Finance Web site (up.dbf.state.fl.us) or call toll-free 1-888-258-2253.
Q. My sister left me her estate, which was mostly in computer stock. After her death, the stock dropped drastically and was sold at a loss. Can the executor use an alternate valuation date on any day within the six months after she died, or does it have to be the six-month anniversary? Can I take the loss on the stock on my income tax return, using $3,000 per year above any capital gains I might have?
A. Does your sister's estate owe estate taxes? If not, you simply use the value of the stock on the date of her death as the new tax basis.
If there is a tax liability, the executor can choose either the value at the date of death or the value on the alternate valuation date, which is six months after the date of death. The only time an interim value would be used is if the stock were sold during the six-month period. In that case, the actual sale price would become the alternate valuation. The value used on the estate tax return is the new tax basis.
If the stock is sold for less than the tax basis, the owner realizes a capital loss. If the estate owned the stock, the loss should be reported on the estate's tax return and netted against any capital gains, St. Petersburg accountant Jeffrey McClanathan said. When the estate is closed out, any unused loss should be passed out to the beneficiaries, who can use it on their own tax returns, he said. If the stock was transferred into your name and you were the one who sold it, you would claim the loss on your return.
Q. Can I claim my girlfriend as a dependent on my income tax? We have lived together for two years. She is not working and I support her 100 percent.
A. Yes. Your girlfriend qualifies as a dependent because she was a member of your household for the entire year, her income was less than $2,900 and you provided more than half her support. Nonrelatives must live with you to be considered dependents.
Q. When my husband was alive we had a trust. Now that he has passed away, I would like to have a simple will and void the revocable trust, as it is very complicated. Can I do this?
A. You need to see a lawyer who specializes in trusts and estates. There are many different ways to draw up trusts. A lawyer can help you interpret your trust, explain your options and advise you. Revocable trusts become irrevocable at death and your power to remove assets from the trust might be restricted. Even if you can remove the assets, it might not be a good idea.
If you invest in a 403(b) retirement plan, also known as a tax-sheltered annuity, check out 403bwise.com, the creation of two Southern California educators. John Moore and Dan Otter say the retirement savings plan, available to teachers and employees of many hospitals and nonprofit organizations, is misunderstood and underutilized.
-- Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.