Greetings,

The cut-off date to get your individual information to me was last Friday. If I still have not received your organizer, please contact me as soon as possible so I can get an extension filed for you.

This time, in addition to the tax tip I am going to talk about planning. This is something nobody wants to think about, but there are 2 very sad examples of why you need to pay attention and get it done.

No matter how you feel about the Terry Schiavo case, it's a terrible burden to place upon your family to try to decide what to do for you if you are incapacitated. If Terry would have executed a living will or advance health care directive, this would not be happening. This is a simple document that states what measures you want to be taken in the event you cannot speak or act for yourself. If you have ever had a friend or family member that has even been in the hospital, you know how stressful that event can be. Imagine how emotionally draining it must be to try to decide what to do if you have to make a decision like this for a loved one.

The other nightmare example has to do with someone who recently passed away. He was a very financially savvy guy. He had several real estate properties, some investments, etc. In total his estate probably exceeded $2,000,000. He also had a long-time girlfriend. Their relationship lasted over 25 years, although they did not live together. He had told her on numerous occasions that he would take care of her if something happened to him. He even went and got a living trust drawn up. Fast forward to several months ago. He died suddenly. Guess what? He never signed the trust. His attorney had been after him to get it signed and notarized, but he never did it. Not only will his final wishes not be executed, but his estate has to go to probate costing thousands of dollars. His girlfriend may not end up with anything.

You may think that your estate is simple, but for most people there is a good reason to invest a small amount of money and get a will, a living trust and a living will executed. So many of us own property, may have step-children, are living with a significant-other. These are all reasons to make sure that your health and your assets are handled the way you want them to be handled.

If you have had these documents drawn up, review them to make sure you still want everything the way it is stated. In addition, if you have a living trust, make sure your assets are transferred to that trust. Any assets that are not placed in the trust will be directed by your will. Make sure that your executor has a copy of those documents or knows where they are located. Always make sure that you have copies of your important documents in a safe place.

I would be glad to discuss your situation with you and refer you to several people that I work with that could assist you with drawing up these documents. There is an advance care health directive form available for $5.00 from the California Medical Association website at cmanet.org.

Here's the tax tip:

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Roth or traditional IRA? What's best for you?

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Making IRA contributions early each year is a smart financial strategy. You give your money a longer time to grow either tax-deferred or tax-free. Now might also be a good time to review Roth IRAs so you can decide whether your 2005 contribution should go to a Roth or a traditional IRA.

You may contribute up to $4,000 to an IRA this year if you're under age 50; if you're 50 or older, you may contribute an additional $500.

If you have a retirement plan at work, the amount you can contribute to a traditional IRA phases out if your income is more than $50,000 ($70,000 for married couples). To make a full contribution to a Roth, your adjusted gross income cannot be more than $95,000 ($150,000 if you're married and file a joint return).

Unlike a traditional IRA, your Roth contribution is not tax-deductible. However - and this is the important part - if you keep funds in a Roth IRA for at least five years, withdrawals are tax-free once you reach age 59½. In addition, you may continue to contribute to your Roth IRA after age 70½ (not permitted with a traditional IRA), and there are no requirements for minimum distributions at any age.

Generally, you might find a Roth better for you than a traditional IRA if:

* You expect your tax bracket at retirement to be at least as high as it is now.

* You have many years to save before retirement.

* You are ineligible to make a deductible contribution to a traditional IRA.

* You have other sources of retirement income, and you want to build a nest egg for your heirs that will be free of income tax.

I would be glad to discuss these options with you.

25 more days 'till April 15th, but who's counting?

Linda