We’ve noticed a really unusual real estate trend lately as families look for ways to increase their cash reserves by selling off long-held properties.

They’re not selling vacation cabins or those condos they bought as investments. Frankly, the residential real estate market has not recovered enough for anyone to make decent money doing that.

Instead, some clients are raising quick cash by selling off family burial plots.

A Really Grave Decision

According to a recent article in the Wall Street Journal, “Selling the Family Plot” (http://digg.com/u1DU4w), cemetery and funeral property web sites are reporting a burgeoning marketplace for the sale of burial plots. As the recent economic meltdown got worse, people started liquidating these assets to make ends meet – or simply to make a profit.

For instance: A couple bought a double plot in 1990 for $1,500. Today, a cemetery might sell the same plot for $4,500. If the couple unloads those plots on the secondary market, they could raise as much as $2,800.

That might be enough for cash-strapped families to decide heaven can wait if they can get back money that they can use for bills they need to pay now. This is one possible strategy to consider if your family needs to raise some quick cash.

Many plots have been held by the families for decades and can be sold for a great deal more than was originally paid. The WSJ article said plots sell quickest and cost the most in places where people tend to retire – such as Florida, Arizona, Texas and Southern California.

Some sellers have been known to offer previously occupied plots that are near or next to the resting places of celebrities. The crypt above Marilyn Monroe went up for auction on Aug. 14 and resulted in a final bid of $4.6 million, though the offer, from Japan, was later rescinded.

Existing Tenants

Is it too late to take advantage of this strategy if your family owns a multi-plot property that was partially used? In most instances, you can still move those remains to another single burial location and then be free to sell the larger family plot.

I caution you that that this isn’t as easy as posting a Craiglist ad or putting a “for sale” sign on the plot. You need to check with the cemetery to find out what the rules are.

Most allow owners to sell plots on the secondary market, but sometimes a cemetery will buy it back. Many cemetery operators reported their buybacks increased exponentially over the last year.

Flipping ‘Plot-perties’

On the other hand, now could be a great time for investors to buy burial plots for future sale and profit. With so many plots coming onto the market, sellers may be more willing to negotiate on prices.

Buyers need to ask what’s included in the price. Some properties will include burial costs and headstones. Just because you buy the land, doesn’t mean you won’t have to also buy an underground crypt.

As always, I hope this article has helped you and your family. If you have any concerns or want to talk about a specific case, please contact our office.

Health care reform dominates the current political and media landscape. The only clear direction out of Washington appears to be a one year band-aid to patch the no-estate tax year of 2010 with a $3.5 million exemption for one year.

The logic of the band-aid strategy would be to capture the revenue that would be lost and defer any significant thinking and legislation until next year?

Your guess is as good as anyone’s.

The future of the Federal Estate Tax remains clouded.

We have been keeping our ear to the ground (actually we have been calling people and searching the Web for clues) to help our advisors predict what will happen with the Estate Tax.

As most of you know, under the 2001 Economic Growth and Tax Reconciliation Act, the Estate Tax is scheduled to be repealed. There will be no tax in 2010, and if lawmakers do nothing (please, no jokes), the Estate Tax would be back with a higher rate of 55 percent and an exemption of $1 million.

Rep. Earl Pomeroy (D – N.D.) , a senior member of the House Ways and Means Committee, was quoted on TheHill.com as saying it’s time to end the “hokey-pokey” Estate Tax code and provide continuity for planning.

I always enjoy Andy Kessler’s perspective. He is a former hedge fund manager and wrote a great book called “Running Money.” I am spreading the word about a terrific analysis of the current stock market.

In his Op-Ed piece on the WSJ.com site, “The Bernanke Market”, he simplifies a complex issue. If you are interested in a unique perspective, take a few minutes to read this piece.

It is undisputed that the majority of job growth comes from small businesses.

Logically, one would think that the best strategy in the current economic environment would be to help the small business owner.

However, the TARP bailout funds have been lavished upon major banks, who used the money to improve their balance sheets and pay bonuses to top executives.

But nothing is going into the market to stimulate lending.

I am seeing small business owners having their lines of credit pulled for no reason other than the bank wanted the capital back. It made no sense because these business owners had no defaults on their loans and their payments were timely.

The government’s plan to raise taxes will be a stake in the heart of small businesses. If you are a small business owner, or are employed by a small business owner or just want to see the economy improve, you need to read this analysis available at WSJ.com.

When my dentist will pay a greater percentage of income tax than Google, there is something breathtakingly stupid occurring.

This Wall Street Journal online guide is well written and has lots of good advice anyone looking to hire a financial planner.

Here is a direct quote from the guide’s main points:

• Look for a financial adviser who is a certified financial planner (CFP). They’re licensed and regulated, plus take mandatory classes on different aspects of financial planning.
• Consider the planner’s pay structure. A planner who earns money based on commission rather than a flat, hourly rate could have an incentive to steer you in a particular direction.
• Read the code of ethics that your financial planner adheres to. Look for the word “fiduciary” and language that requires planners to look after your best interests.

This is an idea that should have been brought to fruition a long time ago. The federal government has a tool consumers can use to evaluate nursing homes: medicare.gov/NHCompare

According to an article in the Wall Street Journal, the Centers for Medicare and Medicaid Services, or CMS,  started ranking facilities in December based on government inspection results, staffing data and quality measures. The “Nursing Home Compare” system reviewed 16,000 facilities and ranked them with 1 to 5 stars.

Visitors to the site can locate ratings for the facilities by searching for the name of the home or by entering a zip code, city, county or state.

Check out another trend that our small business owners are suffering under.  Do you cut jobs or do you cut benefits?

The recession is pounding on the small business community.  It is ugly, and will get uglier this summer.

The newspapers are not reporting it. I doubt you will ever see this in the New York Times, but the unemployment rate here in Florida must be in the low teens. I doubt that its at 10%.  I would say more like 15%.

I deal with small business owners daily.  My prediction is that the increases in benefits, the fact that banks have cut off any form of lending and the upcoming increase in taxes proposed by the Obama administration will only further crush the small business owner market.

I think that you will see 10% unemployment for at least another year and more business owners confronted with what to cut.  Benefits or jobs.  Never an easy choice.

As the jagged ripple of our economic situation continues to influence every aspect of our lives, a recent Wall Street Journal article on Gift Annuities caught my eye.

The article, “Donors Find Gift Annuities Can Stop Giving,” reviews how the market’s turmoil has sapped some charities’ ability to pay out promised yields.

This is an issue that many anticipated coming the surface, and the article does a great job explaining just how quickly and powerfully the current economic climate is affecting charitable giving.

Charities Have Portfolios, Too

Larger charities that are capable of doing gift annuities usually have some form of endowment. Consequently, this puts them in a similar position of a commercial for-profit insurance company. The charities may feel the squeeze as their portfolios drop, but their commitment to provide stays the same.

The financial pressure on them is obvious.

Gift Annuities are typically backed by the charities. Donors make tax-deductable contributions to the charity. In exchange, they receive regular payments for the rest of their lives. Generally, about half of the initial gift remains with the charity when a donor dies.

A souring economy has prompted charities to turn to insurance companies to back up their obligations after they saw their reserve funds wither.

Are All Charities in Trouble?

No. It really depends on the charity. The National Heritage Foundation, which was featured in the WSJ article, could be an example of a charity that is clearly in trouble. It declared bankruptcy in January and stopped making payments to many donors.

Just because a charity has a heart and a loving mission that does not mean it will always be there to make regular payments to your client.

Due diligence is the critical component.

One of the reasons we often recommend clients consider a Charitable Remainder Trust (CRT) is to keep them in control of the investment and the income during life.

While a CRT can be more complicated than a Gift Annuity, we know the money will be there when you need it.

Questions to Ask Any Charity Offering Gift Annuities:

• How much of my gift will go toward charitable work?
• How will the charity invest the gifts?
• Has the charity ever had trouble making annuity payments?
• What is the state of the charity’s reserve fund?
• Does the charity “reinsure” annuity contracts with insurance companies?

I hope this article helps you and your family. As always, if you have a question or concern about a specific case, please contact our office.

I have heard this over and over from small business owners: The banks are pulling out of the small business market.

Lines of credit are being rescinded left and right. I am aware of several cases where the bank called the small business owner and said, “We are pulling your line of credit.”

It did not matter whether the business owner was using the line of credit or whether the payments were timely. In each case I am aware of, the businesses were current on payments. The banks pulled the lines of credit because they were afraid the customer might use it.

As the banks continue to hoard the TARP funds to keep their balance sheets strong, the next wave of financial pain is hitting the small business owner.

The Wall Street Journal recently published an article that merely scratches the surface of what is happening. It’s much uglier in the trenches than many people realize.

If you’re a business owner and you experienced this, what did you do to solve your need for additional credit? Share your thoughts and ideas here.