Bruce Williams

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Mom's illness will put dad on the street?; closing out credit cards and lowering FICO score; more

http://www.NewsAndOpinion.com | DEAR BRUCE: My parents are in their late 70s, they own about 10 acres of land with their home on it, and possess maybe $70,000 in savings and money-market accounts. My mother has Alzheimer's and will likely need long-term care within the next year or so. Our ability to care for her will soon be inadequate. Other than the Alzheimer's, she is in relatively good health and could possibly be in a facility for some years. My father is in relatively good health as well.

As farmers, they have never sought legal advice, other than to make a will, or sought to shelter any of their assets. The will gives the assets to the surviving spouse in case of the death of one, then to my brother and me. They are hardworking people and have saved as best they could for this time in their life. They do not have long-term-care insurance. What will happen to my father's residence and property when his savings are depleted by the cost of long-term care? Is there anything we can help him do at this point to ensure he does not lose his land and home while he is still living? — C.G., Anderson, S.C.

DEAR C.G.: Let me first allay your fears with regard to your dad's homestead. There is no way the homestead can be attacked for medical bills, etc., other than liens, and he cannot be foreclosed upon during his lifetime as long as he resides on the property. Whether the estate can be preserved for his heirs is another question. Eventually, your mother, should she live long enough, will be eligible for Medicaid when the liquid assets are depleted, which will pay for her care. It's a lousy system and, while both of our past presidential aspirants promised to correct the problem, it has not been corrected and I don't believe it will be in the foreseeable future.

DEAR BRUCE: Do you know how I can invest a few dollars in the zinc market in Albania? I have become interested in this field and want to know more about it. — A.W., via e-mail

DEAR A.W.: The operative term to be examined in your letter is "a few dollars." How much is a few? If you only have a little bit of money to invest in a foreign market, my advice would be to forget it. If you have a decent amount of money, any stockbroker can put you into the foreign markets. However, you have chosen an obscure country and, in today's faltering world of credit, not the easiest or wisest place to be investing unless you are a truly knowledgeable investor.

DEAR BRUCE: Is it accurate that you should not close out credit cards, because doing so will lower your credit score? Also, if you max out a card, can your interest rate be doubled? — K.H., via e-mail

DEAR K.H.: For reasons that are somewhat obscure, closing out credit cards does in fact lower your FICO score. However, if you have a number of cards, I would take the temporary hit and keep only those that are necessary. Who needs a wallet packed with credit cards that go unused? As to the doubling of your interest rate, under ordinary circumstances, this is not the case; however, if you miss payments and become delinquent, it's entirely possible the credit-card issuer can and will raise your interest. You can understand why.

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Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).