A: Under Chapter 7, the individual is freed from his debts in exchange for giving the creditors his assets that legally may be seized. With a Chapter 13, the person works out payments over a number of years, although typically debts are not paid in full.

A: A "Question And Answer" consists of two parts. First is a "worthy" question posed by a JuniperTree member or other source. Second is a "worthy" answer from our staff. Together these form a "Question And Answer."

A: Only maybe: We assume you are referring to what is called an A – B revocable trust which is most commonly used. The one time we always say yes you should have a trust is if you own real estate in a State other than where you reside. The trust is used to avoid probating in two States, if you have real property in another state, and you die with it in your name, probate is likely mandatory for all your assets in that state as well as your home state. A trust is not normally a tax saving device and if it is revocable, assets in the trust will be pulled back into the estate of the owner. There are other reasons to have a trust and we have used them to good advantage but we recommend that you discuss this issue with your CFP or attorney to decide.

A: Technically it is a legal procedure designed to transfer ownership from a deceased person to a beneficiary. Long considered to be oppressive and a subsidy for attorneys, it is now no longer as oppressive as it once was. Many States have adopted a standardized procedure. It does take time to process but once title has passed, you may consider it to be a truly safe and uncontested transfer of ownership.

A: It is an Exchange Traded Fund, sometimes called a “closed end mutual fund”, is a bundle of stocks or bonds purchase by an investment company which divides the ownership into shares. It allows an investor to diversify risk to a collection of individual investments reducing the risks of a single holding while making only one purchase. Operating costs tend to be quite low and shares do not have the Income Tax impact often seen in the traditional mutual fund.

A: It is a matter of repayment priorities, if a company gets into trouble, bonds are repaid before stocks. There is a legal requirement for loans to be repaid, a share of stock is a share of ownership and the thus the last to be repaid in a long list of priorities of who gets what when a company goes under.

A: Gifts are not “income taxable” to either the donor or donee. Each year one person may gift assets to as many donees as he or she may desire with no tax impact. If each gift is for $12,000 or less (for 2006), there are no reporting requirements. If a gift is made in excess of that $12,000, a gift tax return must be filed with the Internal Revenue Service. This is when gifts can be entangled with Estate Tax. This gift tax return is normally only an information document and is filed away by the IRS until the estate tax return is filed at the death of the donor. Then the gift amount is included as part of the estate. There are many complexities around large gifts, get professional guidance.

A: A tax on children’s unearned income (exceeding $1,700 in 2006) that after certain deductions, is taxed at the parent’s marginal tax rate, for children over the age of 14 that unearned income is taxed at the child’s marginal rate.