Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 3, 1995 TAG: 9504030013
SECTION: MONEY PAGE PAGE: 6 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
I called NationsBank with the car price information, and the loan payments they quoted me were something I could handle. We closed the loan with the bank and made the first monthly payment.
Prior to the second monthly payment coming due, the bank wrote me saying they had calculated the interest incorrectly and that my payments would be an additional $30 a month for 48 months.
As a matter of principle, it seems to me that the bank and I entered into a contractual agreement when we both entered into the loan agreement. My decision was based on what they represented to me in the first place.
Can the bank legally enforce making me pay this additional amount when it was not a part of the loan agreement? Must the bank not live by its original representation to me?
A: It depends on what the loan agreement says. Such documents often give the bank the right to make adjustments, although the contracts generally show interest rate, principle and period of repayment.
Also, read the truth-in-lending document carefully, because this is legally enforceable. It allows you to compare lenders. Unless it allows in writing for adjustments, the bank may have violated the truth-in-lending law.
Douglas Waters, regional executive officer for NationsBank, said it is impossible for him to check your situation because you did not give your name. He asked that you contact him directly at the bank. He said nobody knowingly miscalculates or misrepresents the terms of a loan.
Waters said the bank cannot change the rate, but it has the right to correct an unintentional mistake. From time to time, the bank makes mistakes and corrects them.
Still, $30 a month for 48 months adds up to $1,440. You should read your truth-in-lending statement carefully to determine whether it contains a provision for adjustments before taking up your grievance with a bank officer. If you get no satisfaction, you may want to have a lawyer review your papers.
Annual gift limit
Q: My husband's grandmother gives us annual gifts of much more than $10,000 a year. Her estate is worth well over $600,000. My husband's mother is deceased. My husband and his sisters split one share of a trust as a gift, and he gets money, and then there's some given in my name.
What is the maximum allowed as an annual gift? I know a child's limit is $10,000, but what about grandchildren and in-laws? We've been given much more than $10,000 a year.
A: Robert K. Flynn, a certified public accountant with the Roanoke firm of Foti, Flynn, Lowen & Co., said the annual gift tax exclusion is $10,000 per recipient. Your husband's grandmother can make annual gifts of $10,000 or less to as many recipients as she chooses without utilizing any of her unified credit against the estate and gift tax. The unified credit against tax is $192,800, which effectively shields the first $600,000 in lifetime taxable gifts or taxable estate.
If the grandmother makes gifts of more than $10,000 in a year to any one person (or a total of $20,000 to a couple), she should file a gift tax return (IRS Form 709) to report the gifts and the amount of her unified credit that will be utilized each year in making taxable gifts, Flynn said.
He also noted a possibility that the generation-skipping transfer tax could apply to the grandmother's estate, although he does not have enough information to comment further on this.
Flynn encouraged the grandmother to see a certified public accountant or an attorney who is experienced in handling estate and gift tax matters to do proper estate planning. Doing so could save a considerable amount in estate and gift taxes.
by CNB