Category: Stocks

Mutual Funds Weekly: These money and investing tips can help you stay upright against the market’s headwinds

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These money and investing stories, popular with MarketWatch readers over the past week, can give you greater knowledge about the financial markets’ current condition as you monitor your portfolio and plan ahead. Plus, check out several short videos about whether to include bitcoin and other cryptocurrency in your portfolio and how to go about it if you do.

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Outside the Box: I took advantage of the 2020 RMD rule but now my 1099-R looks wrong — what should I do?

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Q: I took advantage of the 2020 RMD rule and returned what I had taken from my IRA thinking there would be no taxes. I just got a 1099-R showing the full RMD. That can’t be right. How do I correct it?

—Pauline

A.: Pauline,

If the 1099-R is incorrect, you will need to contact the firm that issued the statement to get it corrected. However, the 1099-R is probably correct.

Read: Are there new RMD rules this year?

Under the law, the firm issuing the 1099-R has no responsibility for reporting how much of a distribution is taxable. That responsibility rests on your shoulders as a taxpayer. The issuing firm need only report what was paid out of the IRA on 1099-R.

Not sure where to retire? Let us help you find the right spot

That does not mean you will pay any tax. Any funds returned to the IRA by Aug. 31, 2020 is considered a rollover and is not taxable. Normally, Required Minimum Distributions (RMD) are not eligible for rollover, but IRS guidance after enactment of the CARES Act that waived RMD for 2020 changed that. The guidance stated the normal 60-day time limit for rollovers would not apply and instead instituted a fixed deadline of Aug. 31, 2020 to return such distributions and avoid taxation.

Read: It’s not too late to save on your 2020 tax bill — here’s how

I get similar questions about 1099-Rs every year. The reporting of the gross distribution looks like an error but in most cases, it is correct and the person receiving it simply hasn’t learned how it is accounted for yet.

Here’s how the accounting typically works.

As with any gross amount reported on Form 1099-R, you declare the amount that is not taxable when you file your 2020 tax return. What I hear most tax preparers would do in your situation is put the gross distribution amount from 1099-R on line 4a as per the normal procedure. Then, they would place a zero in 4b of your Form 1040, and put a note on the return near those lines that it was “returned to the IRA under the CARES Act,” “CARES Act rollover,” “CARES Act,” or simply “Rollover.”

Read: These are the best new ideas in retirement

If you did not return all of distribution by the deadline, the portion that was not returned would be taxable. You would put that number on line 4b.

Read: 5 things to do if you inherit a Roth IRA

As I mentioned a moment ago, the discrepancy between the gross distribution reported and what should actually be taxable comes up in other situations. Three of the most common are other rollovers, Qualified Charitable Distributions (QCD), and distributions from accounts that had received after-tax contributions.

In all those cases, the reporting process looks like what I described above. You put the gross distribution on line 4a and the taxable portion on Line 4b. Then note why the numbers are different with “rollover,” “QCD,” or “See Form 8606” on the 1040. Form 8606 is the form used to determine the taxable amount of an IRA distribution when nondeductible contributions have been made to any of one’s IRA accounts.

If you have a question for Dan, please email him with ‘MarketWatch Q&A’ on the subject line.

Dan Moisand’s comments are for informational purposes only and are not a substitute for personalized advice. Consult your adviser about what is best for you. Some questions are edited for brevity.

The Moneyist: I’m on track to retire at 58. My fiancée is in debt and drives my old car, and I support her family. How do I ensure my son inherits my wealth after I die?

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Dear Quentin,

I have dated my fiancée for just over three years. Within those three years, I have been severed from a job and spent two years unemployed looking for a new job. I have a new job, making roughly 75% of what I previously made, but it is a more than livable salary. My fiancée makes a modest salary in comparison to my own.

Financially, I had spent a lot of years going without in order to pay for my son’s college education and to stockpile savings in order to retire early. According to my financial planner, I am well ahead of my goal to retire at 58 (I’m 51 currently) with an IRA of around $2 million, plus savings and other liquid assets.

Currently, my fiancée is trying to get herself out of debt. She drives my old car and shares no utility bills or mortgage payments, but she does buy groceries, as the household is made up of her, her children and me. By supporting her family, I have very little I can do for my own son.

It has always been tradition in my family to leave an inheritance. I had planned on leaving my only son a rather large inheritance so that he may better himself and his family. My fiancée has children, and my concern is that if I am married (I live in Texas), the savings I have would go to her and subsequently her children, bypassing my son.

Since I am 10 years older than my fiancée, I suspect she may outlive me. How do I protect my assets so that they can be split as part of my wishes?

Nervous Fiancé and Father

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Want to read more? Follow Quentin Fottrell on Twitterand read more of his columns here.

Dear F & F,

Texas is a community-property state, so what you bring into the marriage, you also take out of the marriage. Assets accrued during the marriage, with the exception of inheritance, are deemed marital or community property.

You have several options, including setting up a living trust to allow you to transfer your wealth to your son during your lifetime, and thereby avoiding going through probate, which can be an unpredictable, cumbersome and public process.

You have two choices of trust: revocable or irrevocable. The first can be changed. You could retitle financial accounts in your son’s name. The latter cannot be changed, and also serves to save on estate taxes. It’s typically used to leave assets to children and grandchildren.

Other routes: a prenuptial agreement, a will (obviously) and naming your son as your beneficiary on your life-insurance policy. With the help of an estate planner, you can devise ways to ensure your son is taken care of after you’re gone, and your future wife is not left out.

In the meantime, ensure you keep separate property separate. If you deposit an inheritance in a joint bank account, for instance, it becomes marital property. If your fiancée contributes to the renovation of a home in your name, it again becomes community property.

Speak to your fiancée about your concerns and goals. It’s important to be transparent and ensure that you and she are on the same page, and share the same financial expectations. You may also want to wait until your wife pays her debts before marrying.

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -1.55%  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

The Moneyist: My wife offered to ‘loan’ me money when I was having financial trouble. I now make six figures — and she refuses to pay any bills

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Dear Quentin,

I’m wondering if I am paranoid, or if I have reason to feel used.

My wife and I have two kids and own a home. We have had rocky moments throughout our marriage, but we are hanging in there. In 2019, I took a sales job thinking it would lead to more pay. I was wrong. It took a while for me to get my sales up and running, along with my commissions.

I had to start dipping into my savings to pay my part of the bills, which is usually a little more than half of what we spend. My wife, coincidentally, started making lots more money with her job, and made more than me during 2019. It was about 60/40.

She knew I was short and dipping into my savings, and offered to “loan” me money to pay back. I declined her offer and chose to borrow money from my company, which they called a “draw.” I was shocked and upset that she was treating our marriage like a business transaction.

‘She claims she shouldn’t have to pay any bills because she is now home with the kids during COVID, and I make six figures.’

Fast Forward to 2020. Fortunes changed. She received a $200,000 inheritance, plus $40,000 from her job as a severance after she was let go in March. The difficult sales job I had taken actually led to me landing a new job paying me well over six figures.

As I started my new job, and my wife received her money, she used part of her $200,000 inheritance to go on a spending spree: a $50,000 truck, and a $20,000 camping trailer. AMZN, +0.61%  packages arrive every other day, and the rest is tucked in a savings account.

Here’s the thing. She won’t pay any bills anymore. She says she doesn’t have income coming in, except $3,200 from unemployment. She claims she shouldn’t have to pay any bills because she is now home with the kids during COVID, and I make six figures.

She also insists on “budgeting” so she can account for every dollar I spend, and make sure I put as much extra money after bills into our mortgage to pay the house off quicker. This feels like I’m being hustled, but I can’t force her to pay bills.

Am I a sucker?

Confused

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. Want to read more?Follow Quentin Fottrell on Twitterand read more of his columns here.

Dear Confused,

I was feeling more bemused than confused when I read your letter. Why would your wife offer to give you a “loan” instead of contributing more money to get you both through tough times? Why would your wife not consider her $40,000 severance a form of income from her company? Why would she just not help pay bills given that she can afford to? Would that not make her feel good to be able to participate in the running of your household? You went to great lengths to pay your way.

‘If there’s a sucker born every minute, it’s safe to assume that there’s one married every minute too.’

— The Moneyist

You could put these questions to her, of course, and you would no doubt become embroiled in a debate that was tit for tat. If we accuse others of acting in a churlish manner they no doubt will find some example — whether it is comparable or not — of some churlish or petty behavior of our own. I’m not naive enough to believe that I, or anyone else, can win a lifelong game of petty point scoring, and come out of it unscathed. It can last years. Until death do you part.

And so these questions — while valid — are unlikely to lead to any satisfying conclusion. They would likely open doors to more rooms filled with stubborn indignation heaped upon financial fecklessness. Are you being a sucker? There is no productive answer to that question either. If there’s a sucker born every minute, it’s safe to assume that there’s one married every minute too. But what good does it do to luxuriate in self pity or displeasure, and embark upon another battle of wills?

The Moneyist:My fiancée’s mother asked us to raise her 2 kids, as we live in a good school district and she has a gambling addiction — then she claimed their stimulus checks

The questions you need to ask might go something like: “What has happened that has led us to this unhappy place where we embark on a cold war — bank account against bank account, income against inheritance, and spouse against spouse? Is this the life we had planned for ourselves? Because it wasn’t the life I had planned for us, and it is not the kind of life I want to live. What can we do to reach a place of mutual understanding and respect?”

You also need to ask yourself both the hardest and easiest questions of all: What are you prepared to accept? Where do the red lines in this marriage lie, the ones that are unacceptable to you, and where do the white lines lie, the ones where you are willing and able to compromise on? Your wife making lavish purchases while declining to contribute to household expenses is not an action that is conducive to a healthy marriage, but it does not come from nowhere.

You must find out where all of this comes from. It is either fixable, or it is not fixable. But you need to ask the right questions of your wife — and of yourself — to find out.

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -0.57%  group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

Dispatches from a Pandemic: Johnson & Johnson saga reveals critical strengths in the U.S. COVID-19 mass-vaccination strategy — and its weaknesses

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Todd Paul administers the Johnson & Johnson Covid-19 Janssen Vaccine to Gerald McDavitt, 81, a Veteran of the United States Army Corps of Engineers, at McDavitt’s home in Boston, Mass. last month.

AFP via Getty Images

The United States campaign to reach herd immunity through vaccination involves a delicate — sometimes tricky — dance with side effects, public opinion and virus variants. All three are unpredictable, and can turn when you least expect it.

The rollout of coronavirus vaccines has not been without challenges, but the Biden administration’s strategy of not relying on just one vaccine has preempted potential setbacks with any one product. As recent events illustrate, however, the suspension of one vaccine can impact public opinion of the entire process.

The Food and Drug Administration and Centers for Disease Control and Prevention recommended a pause in the use of the Johnson & Johnson vaccine on Tuesday as they examine six severe cases of rare blood clots. J&J’s JNJ, -1.34%  vaccine is an adenovirus vector-based vaccine that only requires one shot. Clinical trials showed it had 72% efficacy in the U.S.

‘It’s still a race between the variants and the vaccine.’

— Amesh Adalja, a senior scholar at the John Hopkins Center for Health Security

The two-shot mRNA-based vaccines made by Pfizer PFE, +0.51% and German partner BioNTech SE BNTX, +6.68%  and Moderna MRNA, +7.40%  make up the majority of shots administered in the U.S., and were about 95% effective in clinical trials. (Mayo Clinic research puts their “real world” effectiveness at closer to 88.7%, still high.)

Currently, 22.7% of the U.S. population was fully vaccinated. On Wednesday, the CDC’s Advisory Committee on Immunization Practices will meet to discuss the cases and the FDA has launched an investigation into the cause of the clots.

“It’s still a race between the variants and the vaccine,” Amesh Adalja, a senior scholar at the John Hopkins Center for Health Security and a spokesman for the Infectious Diseases Society of America, told MarketWatch.

Operation Warp Speed, the Trump administration’s vaccine development and distribution program, has been key to this success, he said.

“Part of Operation Warp Speed was not knowing which ones would cross the finish line, and having alternative vaccines that can handle the J&J pause and other vaccines in the pipeline,” Adalja said. “We are increasingly not supply-constrained in the U.S. because of the bulk manufacture of vaccines.”

The FDA and CDC said the J&J pause would give their scientists time to investigate the six cases of blood clotting in vaccinated individuals. There were six cases of cerebral venous sinus thrombosis, a blood-clotting disorder, out of roughly 6.8 million people in the U.S. who have received this vaccine.

“When I was offered Moderna, J&J wasn’t even an option. It was never in my consideration not to take it,” Maury Newburger, a New York-based travel consultant who received the Moderna vaccine in March. “Knowing what I know now, I probably would not take the J&J. I still think I would have taken the two-shot vaccines.”

All six cases of blood clots occurred in women ages 18 to 48. One woman died, and another remains in critical condition, according to details released by the FDA Tuesday. “We are recommending a pause in the use of this vaccine out of an abundance of caution,” health officials said.

“Hiccups in production and hiccups in safety are inevitable,” said Dr. Andrew Pavia, the George and Esther Gross Presidential Professor at the University of Utah and chief of the Division of Pediatric Infectious Diseases.

“It was a wise decision to spread the risk,” he told MarketWatch. “Factories can be hit by a hurricane, run out of a supply, or be hit by contamination that forces them to shut down.”

Maury Newburger in Greenland in before the coronavirus pandemic. He received the Moderna vaccine in March. ’Knowing what I know now, I probably would not take the J&J,’ he said.

c/o Maury Newburger
The good (and the bad) news

The good news: Pfizer-BioNTech and Moderna supply the majority of vaccines in the U.S., and currently ship roughly 23 million doses a week here. The White House said the J&J pause will not have a “significant impact” on the rollout in the U.S.

”We’ve been doing fairly well and not having the outcome Europe is having,” Adalja said. “We have successfully vaccinated high-risk populations: nursing-home residents and those in community dwellings. We’re nowhere near the winter surge. Nursing-home deaths have plummeted.”

White House COVID-19 response coordinator Jeff Zients said in a statement: “This announcement will not have a significant impact on our vaccination plan: Johnson & Johnson vaccine makes up less than 5% of the recorded shots in arms in the United States to date.”

‘These types of things make vaccine-hesitant people more concerned.’

— Dr. Aaron Glatt, chair of the department of medicine at Mount Sinai South Nassau

The latest complication has further delayed a rocky rollout in the European Union, which ordered approximately 200 million doses of the J&J vaccine in 2021. “We have made the decision to proactively delay the rollout of our vaccine in Europe,” J&J said in a statement Tuesday. The U.K. has ordered 30 million doses of the J&J vaccine, although it has not yet been authorized for use there.

Now, for the bad news: “Unfortunately, there is always going to be a halo effect in a negative way,” Dr. Aaron Glatt, the chair of the department of medicine at Mount Sinai South Nassau in Oceanside, N.Y., told MarketWatch. “What’s happened with J&J is forcing people to have questions with all vaccines.”

The J&J vaccine “remains an extremely important vaccine for a fatal disease,” he added. “These types of things make vaccine-hesitant people more concerned.”

“Certainly, having other vaccines has been extremely helpful because there can always be manufacturing issues, or different strains may or may not be effective against a particular vaccine. That’s not intentional, it’s just the way science works,” Glatt said.

“The boosters, if and when they do come, will be more easily approved,” he added. “We’ve done most of the legwork already. It’s impossible to predict what will happen. It’s possible the vaccines will have efficacy against different strains. Time will tell, and the different strains will tell as well.”

In one recent Kaiser Family Foundation poll taken before the J&J vaccination pause, 13% of Americans said they would definitely not get the vaccine, and 7% said they would get it only if required.

“As humans, we are not very good at translating risk into action,” Pavia said. “If I have the chance of being one of the 500,000 who die of COVID, how do I balance that with the one person who had a fatal side effect, if it’s a side effect at all? It’s the same perceptual problem when we blindly drive to the airport texting, yet we worry about the airplane.”

In the aftermath of the J&J vaccine pause, Barbara Alexander, president of the Infectious Diseases Society of America, said that the American public must continue to receive clear, accurate and up-to-date information, and have their questions answered, “so that we can maintain and build trust and confidence in COVID-19 vaccines.”

“The risk of becoming infected with COVID-19, and the potential for severe illness or death, remains a serious concern, and we urge everyone who is eligible to take the opportunity to be vaccinated with one of the currently available options,” she added.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has said good ‘herd immunity’ would equate to 70% to 85%, and that the U.S. should start to see a return to normalcy by the fall.

Getty Images
The appeal of J&J and AstraZeneca

The J&J blood-clot issue is similar to one that caused many European countries to pause and/or restrict use of the AstraZeneca AZN, -0.47%  and Oxford University coronavirus vaccine, which is also an adenovirus viral vector-based vaccine. The U.K. has restricted its use to those over age 30.

Moderna started its vaccine rollout in England on Tuesday, providing an alternative to the AstraZeneca vaccine. In Ireland, where Pfizer-BioNTech and Moderna are also available, authorities decided to limit AstraZeneca to people over age 60 for the same reason.

The AstraZeneca vaccine was appealing for poorer countries and rural communities, said Bill Schaffner, professor of medicine in the Division of Infectious Diseases at the Vanderbilt University School of Medicine, Nashville, Tenn.

‘We’re not going to get COVID zero. It’s going to be with us season after season.’

— Amesh Adalja, a senior scholar at the John Hopkins Center for Health Security

“AstraZeneca was supposed to be a relatively inexpensive vaccine, and it can be handled at conventional refrigerator temperature,” he said. “That issues with this vaccine is putting a substantial crimp into the plans of distributing it internationally.”

The J&J vaccine, meanwhile, was an attractive prospect for people who had a particular dislike of vaccines and/or needles, Schaffner added.

“The J&J vaccine has kind of caught on because it’s one and done, so this pause will no doubt slow us down,” he said. “In our state, as we try to vaccinate more people in rural areas, we’ve run into real vaccine hesitancy or indifference to getting vaccinated.”

Elsewhere, Russia’s Gam-COVID-Vac (Sputnik V) coronavirus vaccine was the first in the world to be approved last August, and Hungary was the first country in the European Union to approve it. That country too has rolled out more vaccines. A second Russian vaccine, EpiVacCorona, was registered in October. Last month, Russia approved a third domestic COVID-19 vaccine, CoviVac.

The number of deaths from COVID-19 in the U.S. has reached 563,428, and continues to climb. More than 31.3 million people in the U.S. have been infected by the coronavirus since the pandemic began. Worldwide, more than 2.9 million people have died from the disease.

Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, has said that good “herd immunity” would equate to 70% to 85%, and that the U.S. should start to see a return to normalcy by the fall. That, of course, depends on individuals’ age, circumstances and underlying conditions.

“Herd immunity is likely something that will happen in late summer,” Adalja said. “We’re not going to get COVID zero — it’s going to be with us season after season, but it’s not going to have the ability to cause a public-health emergency. The key was to tame it, and the damage it was causing.”

Vaccine variety also helps protect against variants. Israel has vaccinated over 50% of its population so far. A preprint of a small study, which was published last Friday, said the B.1.351 coronavirus variant, first detected in South Africa, was more likely to infect people in Israel who had been vaccinated with Pfizer’s vaccine.

The study has not been peer reviewed, but it was still of particular interest in Israel, which has relied predominantly on the Pfizer/BioNTech vaccine.

Fauci said clinical data thus far indicates the mRNA vaccines developed by Pfizer and BioNTech and Moderna provide protection against B.1.1.7, first detected in the U.K., but their efficacy is thought to drop against the B.1.351 variant, a rarer strain of the virus, at least in the U.S.

Newburger, the travel consultant, never got a flu vaccine until the coronavirus came along. “I never did believe in the flu shot,” he said. “I maybe got sick one or two days a year, but this was the first year I got the flu shot. It was the combination of COVID, traveling and the possibility of catching something, and this time I thought, ‘I’ll get it.’”

He said there will always be vaccine holdouts who remain beyond convincing to any coronavirus vaccine. “There’s a very small group of people who don’t believe in it for religious reasons or political reasons, or they’re just completely oblivious,” he said. “That’s hard for me to comprehend.”

The Moneyist: My mother is dying of cancer. Her husband said she’s leaving everything to me and my brothers. When is a good time to ask about her will?

This post was originally published on this site

Dear Quentin,

My mother is dying of cancer, and doesn’t have much longer to live.

I was told by her current husband that they sought counsel to establish a will, and all of her assets are going to myself, and my two brothers.

1. When is it a good time to ask about her will?

2. To whom should I speak to regarding her will?

3. Do I ask about it now or wait until she passes?

Obviously, I don’t want to sound greedy, but I feel as though this is important information for myself and the rest of my family to know.

Sincerely,

One of Three Sons

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Want to read more? Follow Quentin Fottrell on Twitterand read more of his columns here.

Dear Son,

Trust your gut. How you decide to approach this depends on how sick your mother is currently, and what kind of relationship you have with her. If it’s a strong, healthy relationship where you can talk about anything, you might say, “Jack kindly told us that you made a will providing for the children. Is there anything that we need to know, or is there anything we can do to help with Jack or your estate?” That is, don’t come bearing questions alone. Bring some offer of assistance to the table.

If your mother is in a vulnerable state, you can take your stepfather at his word, and be there for her during her last days. It may be that she does not want to discuss her last will and testament, and I’m guessing she would not like to be grilled on the subject on her death bed, so tread carefully. (I am assuming that your stepfather was appointed executor.) Ultimately, ensure that your mother is comfortable during her last days, and that includes helping to alleviate any stress or anxiety.

Timing and tone is important in any discussions. Amy Zehnder, managing director, leadership and legacy consultant at Ascent Private Capital Management of U.S. Bank, told me in MarketWatch’s recent “Mastering Your Money” series, that families often stumble awkwardly into such conversations. “Kids don’t want to ask, because they are afraid of coming across as greedy,” she said. “Be curious and understanding about how it works, and not ‘what’s it for me.’”

The document will be filed with the probate court upon your mother’s passing. You can access the document through the probate court and/or through the family’s attorney. The court clerk should be able to help you find the case number and hearing dates, if you supply you mother’s name and the date of her death. Failing that, you can ask your stepfather. If he is good enough to inform you about your mother’s will, he should be willing to share the will’s contents after your mother passes.

The Moneyist: My fiancée’s mother asked us to raise her 2 kids, as we live in a good school district and she has a gambling addiction — then she claimed their stimulus checks

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, +0.36%  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

The Moneyist: My fiancée’s mother asked us to raise her 2 kids as we live in a good school district and she has a gambling addiction — then she claimed their stimulus checks

This post was originally published on this site

Dear Quentin,

Last year, in February, my fiancée’s stepfather passed away. After his passing, my fiancée’s mother asked both her and I to raise her younger sons, as we had recently purchased a new home, have degrees and will be able to provide a great area for their education, such as help with homework, and being able to communicate with their schools or doctors; my fiancée’s mother cannot read, write or speak English, and has an addiction to gambling at casinos.

COVID-19 soon hit afterwards, we both were let go from our jobs, and are making it by with unemployment and savings.

With that said, in March of this year, we filed taxes and my fiancée claimed both of her brothers since they had lived with us for almost nine months of last year. We received both of their stimulus payments a few days later. About three weeks later, we found out that my fiancée’s mother had also received the stimulus payments, even though she is adamant that she did not claim her children this year.

Upon seeing the money, I advised her to leave the money as the Internal Revenue Service may eventually ask for it back. Her new boyfriend then quickly told her to withdraw it anyway. They’ll deal with it later if they ask for it, he said.

My question is: Will this situation hurt my fiancée and I in any way? I fear that the IRS may find out sooner or later about the error, and will seek the money from us, as her mother may have already gambled away that stimulus money, and make us pay for it even though we are using it as it was intended, for bills and necessities.

Fiancé

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Dear Fiancé,

You are correct. The IRS will eventually ask for that money back, and it will likely do so by deducting the money from a future tax refund. You are also correct that your de facto mother-in-law should not have spent the money. I take my hat off to you for raising these two children, and giving them a stable home, and the head start in life that they deserve.

Many people in such a situation would write, complaining about how they did X, Y and Z, and their in-laws were ungrateful, but you have taken the high road, knowing that these shenanigans are between you and your fiancée’s mother, and do not involve your girlfriend’s two younger siblings. I am glad that you have not involved them in this somewhat messy situation.

You, of course, have done the right thing. The Moneyist column has dealt with dependents who claimed the stimulus, and parents who are not guardians of their children collecting it. The $1,400 economic stimulus payment, as you are aware, is not a loan. This third stimulus check is an advanced tax credit on your 2021 taxes, and calculated based on your 2020 taxes.

If the IRS does not know who is telling the truth here, it will audit both parties. The truth will come to light eventually, and they should be made aware that you are not in a position to help bail them out of this situation. They have knowingly walked into it, and there should be a clear boundary between helping their children, and being a facilitator to their malfeasance.

The IRS has extensive guidance on what to do when someone fraudulently claims your dependent. “If you determine the other person was not eligible to claim your dependent, you’ll need to take steps to protect your right to claim the dependent and ensure an accurate filing,” it says. You have everything you need to know in order to take proactive steps here.

I leave that for you to decide.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

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The Moneyist: My husband signed a car loan for a friend — against my wishes. Now we get notices for unpaid tolls and parking tickets. What happens if there’s an accident?

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Dear Quentin,

My husband signed a car lease for a friend. He told me he was co-signing because his friend had bad credit even though I objected to that and asked why his friend can’t just buy a used car. Then at the last second, my husband told me that his friend’s credit “was so bad he had to take out the whole loan” in my husband’s name only.

Aside from the fact this story doesn’t add up, he is now getting second notices for unpaid tolls and parking tickets, and just sends them to his friend and trusts him to pay. He ensures the lease payments are made every month, and tells me that tolls will send collections notices before reporting to credit-collection agencies.

He also claims that his friend has insurance, but that doesn’t add up. The state we are in requires the owner to have insurance. He tells me that none of this is my business, and I have no right to be upset. Yet every time another “past due” envelope arrives I panic at the thought of the savings I worked so hard to put away might be gone in one accident, and that the home I wanted to buy with our excellent credit won’t be possible anymore.

Can you help me explain to him why this was a very bad idea, and why it’s not “none of my business,” as he says? What options do I have to get us out of this mess before we lose everything?

Panicking Wife

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Dear Panicking,

Your problems go way beyond this car loan. Your husband’s willingness to take out a loan on behalf of a friend, and endure these collection notices raises many red flags. What does your husband owe this person? Why would he go above and beyond any reasonable expectation of a friendship to risk his finances and credit rating in this way? The fact that he did this against your express wishes and good sense adds insult to injury. Something is wrong with the bigger picture.

As for your husband’s legal liability. According to Maggiano, DiGirolamo & Lizzi, a law firm based in Fort Lee, N.J., “As strange as it may sound, you can be held liable for a car accident that involves your vehicle — even if you weren’t present at the time. In most motor vehicle accidents, the negligent driver is the one held liable for any injuries or harm caused. However, in certain situations, the law can attribute fault to the owner of the car instead.”

‘Why would he go above and beyond any reasonable expectation of a friendship to risk his finances and credit rating in this way?’

— The Moneyist

The firm cites the legal principles of negligent entrustment and negligent maintenance. The first involves “entrusting your vehicle to someone who was unfit to drive.” Negligent maintenance “is the failure to properly maintain your vehicle, presenting a safety risk for anyone driving the car. This term ‘negligent maintenance’ is used because you have a duty to other drivers to keep your car in safe, working condition as to minimize the risk of an accident.”

Given that your husband owns the car and it is being driven by someone who is not paying its bills, and creating more costs through careless driving and bad parking, your husband is already fully aware that this is a bad situation. You are left without a “why” or action by your husband to address this. Take a closer look — with the help of an attorney — at your joint/separate finances, and explore ways to protect your savings. You also need to take action to restore your peace of mind.

Otherwise, you will be driving around in proverbial circles without knowing your legal and financial options. Whatever that potential action entails should be decided between you and your attorney in the first instance. I am willing to guess that this is not the first time your husband has made a decision in your marriage that has left you baffled. A lawyer should explain to you why it’s a bad idea to endure these kinds of unilateral decisions, and what you can do about them.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -0.81%  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

The Moneyist: My parents made my sister executor of their $4 million estate, and joint owner of their bank accounts. Should I be worried?

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Dear Quentin,

I just found out that my parents (who are in their mid 80s) have named my sister as their successor trustee, and executor of their estate and wills. They have also put her name on all their financial accounts “in case something happens to us.”

I have no reason to suspect my sister of any nefarious motives, but having her name as joint owner on their accounts seems potentially problematic to me in case of their passing. What are the pros and cons of this arrangement?

Their estate is probably worth about $4 million. We have five other siblings who are currently unaware of this arrangement. Can you provide any resources or articles I could show my parents regarding better ways to accomplish their goal of having someone in charge of their finances?

Concerned Son

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com.

Dear Son,

People often don’t do anything nefarious, until they have the opportunity to do so and/or run into financial difficulty of their own. That may not be the case with your sister, of course, but your parents should absolutely know the meaning of making one of their children a co-owner on their bank accounts, if their intention is to merely have your sister assist with bills.

Are you sure your sister is a co-owner of this account, or is she a co-signer? If it’s the former, your sister is a joint owner and can spend the money as she wishes. She would be liable for any debts on that account after your parents’ death. If it’s the latter, your sister has the right to sign checks on your parents’ behalf. If they overspent, the co-signer would be responsible for those debts.

Many people don’t understand the difference between being a co-signer and a co-owner. There are many cases of children listed as co-owners (rather than authorized signers) on those accounts who have emptied their parents’ bank account before and after they died. Sometimes, they did not keep enough (or any) receipts, and have been wrongly accused of emptying a parent’s account.

Many people don’t understand the difference between being a co-signer and a co-owner.

In the letters I have received on this issue,the damage was often already done, typically caused by a combination of the three “Gs” — grief, gripes and greed — when long-simmering sibling rivalries boil over. People do things that they may not otherwise do if their parents were there to witness it. You are correct to ensure your parents’ action is in accordance with their wishes.

There are other ”what ifs”: What if your sister dies first? The account would likely become part of her estate too, with a share to be distributed to her children, which could then involve paying a state inheritance tax. Your parents’ accounts could also be “paid on death” or “transferred on death,” avoiding the public and often time-consuming probate process. Read more here.

The Moneyist: ‘I cut his hair because he won’t pay for a haircut’: My multimillionaire husband is 90. I’ve looked after him for 41 years, but he won’t help my son

Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -0.71%  group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Mutual Funds Weekly: These money and investing tips can help you make a place for crypto in your portfolio

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These money and investing stories, popular with MarketWatch readers over the past week, can give you a better understanding of bitcoin and other cyrptocurrency, and help you figure out if digital currency has a place in your portfolio alongside stocks, bonds and other traditional assets.

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