Question: We moved here from Denver in February to accept a new job in D.C. Because of a short deadline, I flew here while my wife drove east with our children. Can we deduct both sets of expenses on our 1978 tax return?
Answer: Yes. There is no requirement that the family travel in a group (or even at the same time) for the moving expenses to qualify.
You may claim out-of-pocket expenses of your flight, including fare, excess baggage charges, tips and the cost of getting to and from the airports.
Then count the auto expense for your wife's drive - either actual costs of gas, oil and repairs or a flat seven cents a mile, plus parking fees and tolls in either case. Add to this the cost of meals and lodging for your wife and children.
If they made any stops or side trips for sightseeing or to visit family or friends, expenses attributable to those purposes are not deductible. Instead, you may claim only what the costs would have been for a direct trip.
When traveling by car, incidentally, there is no IRS requirement that you cover a specified minimum number of miles each day or that you stay at the least expensive accomodation - only that the expenses claimed are "reasonable."
Q: Kindly give me information as to what is included in "estate planning." Are there any booklets that have this information?
A: "Estate planning" is simply the development of a plan for living that will secure for you the maximum enjoyment of your property during your lifetime, and then the transfer of that property to your survivors with minimum difficulty and minimum cost in taxes and expenses.
Most people think of estate planning in terms of wills and insurance - and dying. Of course these are important, and dying is inevitable. One of the finest things you can do for your family is to arrange your affairs to produce the least amount of problems for them at an emotionally traumatic time.
But the first part of the definition is equally important, if you hope to enjoy life now. Without some idea of what assets you own, what you expect to accumulate, and what you think your future needs will be, present pleasures are constantly eroded by fears of future inadequacies.
I suspect that part of the problem is semantics. The word "estate" is defined by most people as the property left by one who has died. In fact, an estate should be defined in terms of the living. It consists of all of one's assets (home, car, investments, cash, etc.) minus the demands on those assets (mortgages, loans, etc.).
Put in those terms, you can see that estate planning is not only for the old or the wealthy. Virtually everyone has an estate, and virtually everyone - at any age - should be doing some estate planning.
And this is not something you do once and then forget about. It's a good idea to draw up a balance sheet - a list of assets (property) and liabilities (debts) once a year. As a minimum, certainly your plan should be reviewed whenever there is a major life-cycle event - marriage or divorce, birth or death, etc.
There are a large number of publications on the subject, including magazines, books, and pamphlets. Many banks and insurance companies, among others, offer free booklets. Check your local library for books and magazines.
Estate planning can be a do-it-yourself project, if you can devote enough time to the project. You can get advice and assistance from bank officers. securities firms, and insurance agents; from your attorney and tax accountant; and form the growing group of professional financial counselors.
But this is a very personal matter. These people can explain the tools and techniques available and can suggest possible alternatives. But you must make the decisions about what is best suited to your individual lifestyle.
Q: A good friend wants to name me executor in his will. I'm a little hesitant becuse I don't know what the job requires. What's involved here?
A: Basically, the executor collects and inventories all the assets of the deceased; arranges for professional appraisals if required; sells those assets that will not be distributed directly to the heirs; pays all debts and claims against the estate; files any required estate and inheritance tax returns; distributes the remaining assets
The executor (executrix, if a woman) submits a statement of his stewardship to the probate court. as directed by the will; and finally may also help with funeral arrangements and provide comfort and counsel to the survivors - but these derive from a personal relationship rather than from any legal responsibility.
For a small estate the job of executor may not be particularly onerous, but it is time-consuming; and you are likely to need the assistance of an attorney (particularly if there is real estate involved).
But if there are substantial assets or if the will is complicated (involving, for example, the establishment of one or more trusts), you would do well to advise your friend to select a professional executor such as a bank or trust company to serve as co-executor with you.
Incidentally, an executor is entitled to a fee - usually regulated by law or set by the court - for his services; and he may be required to post a bond to insure the proper performance of his duties. If it is anticipated that the executor is to serve without fee or bond, then authorization to that effect should be stated in the will.