Chapter 14 Odds and Ends

• Library: Estate Planning for Same-Sex Couples (ABA) (2015 Ed.)

Chapter 14 Odds and Ends

This chapter includes issues that can affect a client's estate plan or the advice given to clients concerning their life planning.

A. Debts, Credit Reports, and Credit Cards

Debts, credit reports, and credit cards are necessary components of a client's estate plan. Understanding assets and liabilities will help in preparing a comprehensive plan that will address issues during the client's life and after her death.

Credit

There are no laws that prohibit discrimination based on sexual orientation, but it is not common. That also means creditors can deny credit to lesbian and gay applicants. State or local laws may prohibit discrimination; federal law does not.

The Equal Credit Opportunity Act (ECOA) does not include sexual orientation as a prohibited basis for denying credit. And, there are no court decisions that extend coverage of the ECOA to sexual orientation.

The Department of Housing and Urban Development (HUD) regulation¹for its core housing programs prohibits lenders from using sexual orientation or gender identity to determine a borrower's eligibility for FHA-insured mortgage financing. The HUD rule specifies actual or perceived sexual orientation and gender identity.

Credit Reports

In 2003, Congress passed the Fair and Accurate Credit Transactions Act of 2003 (FACTA).² This amended the Fair Credit Reporting Act (FCRA)³ and provided expanded consumer credit rights.

Under FACTA, consumers have the right to obtain an annual free copy of their credit report from each of the three major credit-reporting agencies. The Federal Trade Commission (FTC) issued the Final Rule on Free Annual Credit Reports in June 2004.⁴

Consumers can request their credit report from www.annualcreditreport.com. This is the only authorized website. Others have been set up with similar names but they are not the FTC sanctioned sites.

Consumers may request an electronic copy of their report or have one mailed to them. These reports are free.

Clients should be encouraged to stagger their requests over a year. That way they can get a report from a different credit-reporting agency every four months. Consumers that are victims of fraud, identity theft, or have been denied credit continue to have the right to a free report outside of the annual limit.

Clients can also place a freeze on their credit report. This will prevent any new accounts from being opened. Each state has a different process for freezing an account. Some states allow their residents to start and stop freezes without charge; others levy a minimal fee to start or stop a credit freeze. Check the individual state websites for information about these fees. Credit freezes are a good idea if a client has been the victim of identity theft or has had other credit report problems. The client must unfreeze the account before applying for credit. If they do not it will delay the credit application.

Credit-Reporting Agencies

There are three primary credit-reporting agencies (CRAs): Experian, Equifax, and TransUnion. These companies collect credit and debt information on individuals.

Clients may not need to get a credit report from each credit-reporting agency. Sometimes it is sufficient to get a copy from the company that is nearest to where the client lives. For example, TransUnion is located in Pittsburgh, Pennsylvania. It is the primary CRA for the northeast.

Contacting a CRA directly may result in a fee being charged for the credit report. Each CRA levies different charges...