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Lombard estate planning lawyerRecently, a previous post on this blog discussed the definition and some of the possible benefits of reverse mortgages. In that article, we talked about how reverse mortgages are often taken out by seniors to supplement their retirement income by borrowing against the equity they have built in their homes. In many situations, a reverse mortgage may be an appropriate option, but it is important to consider that reverse mortgages could also have some disadvantages—including an impact on the assets passed down to a person’s heirs.

Unforeseen Costs

The entire point of a reverse mortgage is to give an elderly person—62 is the minimum qualifying age—access to additional money during his or her lifetime. The amount a person can borrow in reverse mortgage is dependent on a number of factors including the type of reverse mortgage, the borrower’s age, the value of the home, and interest rates. Of course, in most cases, the lender will also apply a number of costs and fees, including an origination fee, costs at closing, and servicing fees for the life of the loan. Some lenders also charge for mortgage insurance premiums for certain reverse mortgages.

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Lombard estate planning attorneyThe maxim that nothing in life certain except death and taxes has persisted in American culture since Benjamin Franklin used it as a quip in a letter more than two centuries ago. While death and taxes are undoubtedly certain for most people, it is the combination of the two that can be troubling for many individuals and families. Between estate taxes, inheritance taxes, and other tax obligations, it can be expensive when a loved one dies. Through proper estate planning, you and your family may be able to limit your tax liabilities, however, and a relatively new tool may be available to help you do so.

What Is an IDF?

Insurance dedicated funds (IDFs) were introduced in the early 2000s, and despite their bland name, they have quickly become a hot item in the world of finance and asset protection. Such funds are rather complicated and subject to complex rules and regulations, but their appeal is based primarily on their ability to legally avoid taxes by meeting certain requirements.

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Posted on in Divorce

divorce, taxes, Illinois family lawyersFinancial concerns, including taxes, and issues of family law are known for causing frustration and confusion. When you combine the two of them, it can really cause trouble. A married couple may be used to claiming their children as dependents on their taxes and enjoying the dependency exemption they get. Subsequent to a divorce, however, only one of them can claim the children on his or her taxes.

The Default Rule

The IRS has a set of rules and regulations to deal with claiming dependents after divorce. The default rule is the custodial parent gets to claim the children on the taxes. While, Illinois may no longer use the terms "child custody" or "custodial parent", the IRS still does. The IRS considers the parent that lives with the children most of the time to be the custodial parent.

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StaciTax issues are confusing as it is, but when you are in the midst of a divorce, you may have various questions about how to file, what forms to file, and how to handle payments such as child support and alimony for tax purposes. Fortunately, a recent article from the Huffington Post details the most commonly asked questions about divorce and taxes.

The first question often is about your filing status – joint or single? If you are still married on December 31st, you are still married for tax purposes, even if you already have filed for divorce or are living separate from your spouse. Filing a joint tax return has many advantages, ones that a couple often should take advantage of if at all possible. However, a joint return also means joint liability for any tax debts that are owed and for the findings of any audit by the IRS.

Divorcing couples often wonder who has the ability to claim a child as a dependent on taxes, given the circumstances. Generally, the custodial parent has the right to claim the child, which is the parent with whom the child has lived for more than one-half of the year. However, if there is a court order to the contrary, i.e. that states which parent should claim which child on taxes, then you must follow the court order.

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