I was listening to a conversation between one of the ladies who announced to the Estate Planning Attorney that she had recently learned there is a death tax. I like to think of it as an Estate tax as it is usually paid by very large estates. She wanted to know if there was a way around it. The Attorney explained that this year (2010) the tax on estates is nil and until Congress does something it may be based on assets over $1 million in 2011. She could reduce her estate by gifting $13,000 to whomever she wanted to.

The conversation came to mind over the weekend.

The Attorney never mentioned that one of the options available to cover the tax is having an Irrevocable Life Insurance Trust that would purchase life insurance to cover the amount of estate tax that might be owed at her death. If the premiums are large she can set up the trust with gifts to her kids or grandkids that would go to pay the premium.

An attorney knowledgeable in Irrevocable Life Insurance Trusts would need to be consulted along with a CPA and a knowledgeable insurance agent.

Today I watched Rafa Nadal win the Men’s final over Tomas Berdych at Wimbledon. I always want to see the underdog succeed so I was rooting for Berdych. The shots that these players make are amazing and if you’ve never played tennis I don’t know if you can appreciate them. Can you imagine hitting a ball that’s coming at you at 125 miles per hour?

Yesterday, I saw Serena Williams win the Women’s final over Vera Zvonareva. Serena is so powerful. Today, Vera played in the Women’s doubles finals. She and her partner didn’t win but she was so distraught she was bringing her partner down to her emotional level which didn’t help the team. A California girl, Vania King and her partner Yaroslava Shvedova won with their upbeat attitudes.

I discovered it’s even fun to watch sports I don’t know anything about. Soccer or football as it’s called in other countries is exciting when it’s the World Cup. The Spain vs. Paraguay game yesterday was pretty interesting with all the activity on the field. I don’t understand what the yellow cards mean or the red cards but when a goal isn’t counted for something called offside it’s pretty upsetting to the team and their fans. Soccer at this level is pretty rough. It’s got to hurt if a cleat breaks the skin even if it’s accidental.

Several weeks ago I watched the NBA Finals. My friend down the street is from Boston so she was rooting for the Celtics. I really didn’t care who won I just watched the games to see what the heck the big deal is about basketball. I discovered there’s a lot of pushing and shoving to keep the opposite team from shooting the ball. I got an education. I’m at a loss about the terminology. What does it mean when it’s a field goal? I thought a field goal is in American football.

If you want to explain any of the terminology to me please do so when I watch again I’ll know what the announcers are talking about.

What I wanted was on pages 21-22 of the summary. I bet you’ll be as surprised as I was. Here is a summary of the summary.

Subtitle A: Revenue Offset Provisions – (Sec. 9001, as modified by section 10901) Amends the Internal Revenue Code to impose an excise tax of 40% of the excess benefit from certain high cost employer-sponsored health coverage. Any amount which exceeds payment of $8,500 for an employee self-only coverage plan and $23,000 for employees with other than self-only coverage (family plans) as an excess benefit. Increases such amounts for certain retirees and employees who are engaged in high-risk professions (e.g., law enforcement officers, emergency medical first responders, or longshore workers). Imposes a penalty on employers and coverage providers for failure to calculate the proper amount of an excess benefit.

As I understand this, if you are in a company plan and the company pays over $8,500 for a single individual employee that employee will be paying tax on the amount over $8,500 at 40%. Example: Company pays $10,000 for individual employee health coverage. Deduct $8,500 leaving $1,500 excess. Employee will have to pay $600 excise tax on the $1,500 calculated at 40%.

The employee that insures a family will have to pay the excise tax on the amount over $23,000 that the company pays. Example: Company pays $30,000 for a family plan. Deduct $23,000 leaving $7,000 excess. Employee will have to pay $2,800 excise tax on the $7,000 calculated at 40%.

(Sec.9002) Requires employers to include in the W-2 form the aggregate cost of applicable employer-sponsored group health coverage that is excludable from the employee’s gross income (excluding the value of contributions to flexible spending arrangements).

I don’t know if these plans apply to the average employee or to high earning executives. I guess we’ll find out when W-2s come out in 2011.

There are some other sections that relate to health savings account, Archer medical savings account, limits of annual salary reduction contributions under a cafeteria plan, etc.

I was resting and watching TV so I didn’t answer the phone since it was the office line.

The message from an acquaintance was about the hit and run accident on Friday that took the life of a dear friends son. He was riding his motorcycle.

My friend called me this morning to tell me and I told her I already knew and I would be at the funeral when it is scheduled.

Corey is an organ donor and as we were speaking she said his organs were being harvested and then his body had to go to the coroner’s office. The coroner determines when to release the body.

There is more than one tragedy here. My friend and her son were estranged for 10 years. She never knew why.

Let’s hope none of us have to get that phone call.

Upon entering the shop I was greeted by, Perfumer, Marlene. She invited me to sit at the perfume bar where she asked me what I like and don’t like about scents. My likes are minimal. My dislikes are that my eyes get itchy when I walk through the cosmetics in a dept. store. I’ve avoided wearing any perfume because of that.

We went through a questionnaire and then she started pulling scents off the shelves. I got to say what I liked or might like or didn’t like.

In the end she mixed about 10 different scents in different amounts and I have my own perfume mixed just for me. It’s oil based and very clean and crisp. I’ll enjoy wearing it!

Thanks April for the gift certificate.

Prior to attending this event I was aware of Dr. Yunus through my friend Karon Wright. I haven’t read his books and didn’t get the full picture of what this gentle, humble man has accomplished in the world. He believes that no one deserves to live in poverty. If they do it is not their fault.

A former Fullbright Scholar, 2006 Noble Prize winner and 2009 recipient of the Presidential Medal of Freedom, Dr. Yunus began eradicating poverty by giving micro loans to the poor.

The story that really touched me is the one that told of the villagers in Bangladesh that had borrowed money from loansharks. The sum total of the loans was $27. He decided that if he gave the villagers the money to pay off the loansharks he would then loan them the same amount and they would not have the exorbitant interest to repay. This was the beginning of micro loans in Bangladesh.

The Grameen Bank came out of this and currently lends hundreds of millions of dollars throughout the world including the U.S.

He spoke of how hard it was to get women in his native country, Bangladesh, to accept the idea of taking money and improving their situation. Women stayed home and managed the little bit of money the men gave them. It took 6 years for Yunus and some of his students to convince the village women that if they started a business they would improve their lives.

As with all village banks, the loans are made mostly to women and are paid back at a 98% rate and then the women borrow again. It is a cycle that improves the lives of people world wide and in some cases doubles the income for a family.

I’m proud to be involved with a local organization, The Greater Contribution, that raises money for micro loans in third world countries. Please visit the website: www.greatercontribution.org to learn about the work we’ve done. If you can, make a donation. It’s amazing how far the dollar goes in other countries.

We recently learned the village banks we funded in Haiti were not affected by the earthquake as they are many miles outside of Port au Prince.

I want to share the 5 Laws of Stratospher Success on page 9 of Go-Givers Sell More and recommend the book to you.

The Law of Value: Your true worth is determined by how much more you give in value than you take in payment.

The Law of Compensation: Your income is determined by how many people you serve and how well you serve them.

The Law of Influence: Your influence is determined by how abundantly you place other people’s interests first.

The Law of Authenticity: The most valuable gift you have to offer is yourself.

The Law of Receptivity: The key to effective giving is to stay open to receiving.

Feel free to comment. You can always reach me by phone at 818 706-3745 or email: Sandra@Insurance-California.com

Sandra Cherry, PFP www.SandraCherryFinancialPlanner.com 818 706-3745

You may have already been notified by your agent or a phone call from Anthem. An acquaintance of mine who applied and was accepted by another carrier received a phone call from Anthem about this.

I read the article in the Los Angeles Times this past Sunday and thought it interesting. Anthem says it is utilizing 70% of premiums collected to pay claims as required by law. The California Insurance Commissioner and Congress are making noise about the increases being exorbitant and are doing an investigation. Hence the reprieve.

It’s also interesting to me that when I recently did a comparison for a prospect that Anthem came in less expensive than the carrier I compared to and has a two year rate guarantee on certain plans.

We will know soon.

Don’t cancel your Anthem coverage without getting coverage with another carrier. If you need assistance, call me at 818 706-3745 or email me at Sandra@Insurance-California.com.

Sandra Cherry, PFP CA Insurance License #0B45111

SandraCherryFinancialPlanner.com