Page 43 - Kiplinger's Personal Finance - November 2018

MONEY

ASK KIM Kimberly Lankford
A Risk for Buy-and-Hold Investors

MY MUTUAL FUND COMPANY SENT A Required minimum distributions on 18. Can we still get his grades and health-
letter saying that if it doesn’t hear from autopilot. I’ve arranged for my IRA adminis- related information?
me soon, it will turn over my account trator to take out RMDs for me automatically, M.L., FARMVILLE, VA.
assets to the state. My address hasn’t but how does it determine which investments
changed. How could this happen? to sell? When your son turns 18, you lose
G.P., BALTIMORE G.C., SANTA CLARA, CALIF. many parental rights unless you have
special legal documents. A HIPAA
The rules vary by company. At Fidel- authorization form signed by him will
Many states changed their abandoned- ity, you can have the money with- permit you to receive information
property laws and now take over ac- drawn proportionately from each of from health care providers. A health
counts much earlier than they used to. your IRA investments (the most com- care power of attorney naming you as
This is a growing problem for buy- mon option). Or you can elect a fixed his “medical agent” will allow you to
and-hold investors. percentage from a few investments or make medical decisions for him if he
In the past, financial institutions have 100% taken from cash. Vanguard is unable to do so. A Family Educa-
would turn over accounts to the state has similar options. tional Rights and Privacy Act (FERPA)
as abandoned if they hadn’t heard Charles Schwab takes automatic waiver, usually available from the
from you for seven years after mail to RMDs only from cash, and the firm college, lets you see his grades.
you had been returned as undeliver- sends an alert two weeks beforehand
able. Now, many states can take over in case you need to sell shares to raise New rules on capital gains. What are the
your account if a financial institution the money. long-term capital gains rates under the new
hasn’t heard from you for three or tax law?
five years, even if your address hasn’t Legal documents for college students. My C.C., WILLIAMSBURG, VA.
changed, says Tamara Salmon, associ- son will be starting college next year. He’ll be
ate general counsel for The rates didn’t change, but they’re
the Investment Com- pegged to your income instead of your
pany Institute, a mutual IF YOU HAVEN’T BEEN tax bracket. For 2018, you’ll pay 0% on
fund trade association IN CONTACT WITH long-term capital gains (investments
(see www.ici.org/lost_ held longer than a year) if your taxable
property for details). YOUR INVESTMENT income is below $38,600 for single fil-
You can file an aban- FIRM, YOUR STATE ers, $51,700 for heads of household
doned-property claim MAY BE QUICKER TO or $77,200 for joint filers. You’ll
and get your money, but SEIZE YOUR ACCOUNT pay the 15% rate for taxable in-
you may miss out on any come up to $425,800 for singles,
gains or dividends after AS ABANDONED $452,400 for heads of house-
it was sold because the PROPERTY. hold or $479,000 for joint filers.
state can liquidate your Above those income levels,
assets. (Search your the rate is 20%. You may owe
state’s database at www.unclaimed state taxes, too, and high
.org or www.missingmoney.com.) earners may also have a
Salmon advises contacting your 3.8% net investment in-
financial institutions at least every come tax, says Mark Lus-
three years to let them know an ac- combe of Wolters Kluwer
count is active. Even logging into your Tax & Accounting.
account online can count as activity POON WATCHARA-AMPHAIWAN
at some firms. And respond to any GOT A QUESTION? ASK KIM AT
ASKKIM@KIPLINGER.COM. KIMBERLY
letter like the one you received— LANKFORD ANSWERS MORE
QUESTIONS EACH WEEK AT KIPLINGER
after verifying that it’s legitimate. .COM/ASKKIM.
42 KIPLINGER’S PERSONAL FINANCE 11/2018

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