In and Out October 3, 1997March 25, 2012 Writes a gay Republican prominent in the Eisenhower White House and ever since: “I went to see In and Out [the current Kevin Kline hit]. Ahead of me in the line were a couple and three kids. I heard the father order the tickets: ‘Two adults for The Game, three children for In and Out.’ We have come a distance!” I’ll be brief. I know this stuff offends a few of you and doubtless bores others. But it’s worth comment how America is confronting this until-very-recently taboo and scary subject . . . considering the issues on their merits . . . and in relatively short order accepting yet another minority into the national fabric. I don’t know if you saw Ellen on the Tonight Show with Jay Leno a week or two ago, but it doesn’t get much more mainstream than that. It was very funny. In and Out is very funny. It’s all part of what I believe they call “the human comedy.” As long as people are law-abiding, productive citizens, let’s just laugh at our differences and profit from our diversity. This is the attitude that seems to have won over many Democrats and more than a few Republicans. (The libertarians of course were never in doubt.) When Charles and I went up to Boston last week for my 25th business school reunion, it went as I’ve found these things always do — the wives all over Charles when they find out he designs a prominent clothing line many of them wear; the husbands trying to figure out whether there’s money to be made putting together a deal to launch his own label. Not to say Harvard Business School is typical. But our class survey showed us to be something like 70% Republican, 21% Democrat, 9% Independent — so it’s not exactly Harvard College we’re talking about here, or Berkeley, or Key West. Newt may not accept his sister for who she is, but many of his fellow Republicans and most Democrats now do. Anyway, see In and Out. It’s a riot. Monday: A new web address: www.ameritrade.com
Who Owns Your Life Insurance Policy? October 2, 1997March 25, 2012 If you take out a life insurance policy, the cash it produces when you die becomes part of your taxable estate. If everything you own — house, insurance proceeds, pension assets and so on — total less than $600,000 (gradually rising to $1 million over the next few years), no estate tax will be due. But beyond that, the tax is heavy. If you’re leaving everything in excess of $600,000 to your spouse (or to charity), no estate tax will be due, either. But when your spouse dies, estate tax may well be due. So if you’re trying to leave some money to your kids, here’s what you can do: set up an irrevocable trust and have it apply for the life insurance (or transfer ownership of an existing policy into it, at least three years before you die). When you die, the life insurance proceeds go to fund the trust, and no estate tax is due. You might set up the trust to pay your spouse an income while she’s alive and then be distributed to your kids. Speak with a trust and estates attorney for the details, and to be sure what I’m saying applies to you. But for people who have appreciable assets, this issue of “who should own the life insurance” is a basic estate-planning question to consider.
Insurance Tip October 1, 1997March 25, 2012 Comes this smart tip from the Percy Hoek insurance agency (if you happen to live out on Long Island, New York, or perhaps even a bit further afield, you could do worse than to talk to these folks — one of the nicest, most knowledgeable, hardest-working independent agents I’ve ever run across — 516-589-4100): “More insurance companies are offering or suggesting you report claims directly to them, not to the agent. It’s easy, but can be costly too.” The problem is: even if your claim proves not to be covered or not to exceed the deductible, your call to the insurer will be “logged.” They didn’t pay out a dime, yet they consider it a smudge on your record. Rack up a few such smudges, and you could see your rate rise or your renewal declined. Whereas if you had called your agent, you would have had these “non-claims” filtered out. A good agent can also provide some help and guidance in making and following through with a claim. This is not to deny the benefits of dealing with a “direct writer” — insurers like GEICO (which happens to insure my car) that sell direct by phone rather than through agents. You’ll generally get a lower price shopping around and going with a direct writer. But there can be benefits to personal service and guidance as well. If you have more time than money, I’d shop around for a cheap direct writer. If you’re a little further along financially, you may want to establish a relationship with a good independent agent — yet occasionally do reality checks by shopping around on your own. With the Internet, this is likely to get ever easier. Also, consider that with life insurance, unlike homeowners and auto insurance, you’re not likely to make a lot of claims. So there it’s particularly sensible, if your needs are simple and direct — you’ve got young kids, you need all the coverage you can afford — to shop around yourself for the cheapest term insurance you can find. Tomorrow: Who Owns Your Life Insurance Policy?