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Show Sunday, August 21, 2005 DAILY HERALD THE WALL STREET JOURNAL,Sih Encore / By Kelly Greene eee Readers on Pets, 401(k)ids and Gifts eaders are at bat this week, with their comments about ing on the state), your child takes control of the money and can spend it cotary| to pe ae: ‘the role a new pet plays in salving a child's grief, teaching firoca literacy to young kids, and the power struggles that an unex- Ths we's al words gow Bed ean ae ca oe ‘ couple of weeks ago I wrote about my son losing one of his fish, the first death he has experi- enced. I talked about how my instinct was to buy a new pet, as . The while appreciated, left my friend feeling beholden to the indaws and put a wedge between her and herpart- manyparents do when their kids face a-traumasuch as a divorce, a death in the family or even a move from the house they grew up in. ner. That, I concluded, was the wrong approach to dealing with my son’s grief. It didn’t allow him to deal with the trauma, And it brought a living creature into the house that we may soon come to regret. So instead, I did nothing butlet him grieve. Dorothy Wilhelm, in Tacoma, Wash., says that I’m “really on the right track” with that tactic. Ms. Wilhelm says her husband died whentheir youngest daughter was just 6. “She was devastated,” Ms. Wilhelm says. “Often she couldn't stay in class when Daddies were discussed. One day, Ms. Wilhelm tried to explain to her daughter's class why it was thatthelittle girl was so sad. When she explained that her daughter's dad had recently died, “most of the kids just sat there round-eyed, having nothing to relate it to. But onelittle girl said, ‘Oh, I know just how she feels. My cat died.’ To tell the truth, I felt a flash of anger. How could she relate a cat's déath to the loss of a father?” But then, Ms. Wilhelm says,it sly [as my grandparents did for me] are definitely defeating the purpose of having pets—learning about the cycleoflife.” Still, Ms. Marsh says, ultimately notreplacing a pet can be my son to grow up understanding money. And that effort begins at “Too many people I know have let that grief prevent them from ever enjoying the companionship of animals, in an effort to protect ther’s paycheck. The family was poorand herparents had grown up in the Depression. Ms. Harada says her mom deposited part of the Learns in a checking account, die,” she says. “Isn't that the same kind of avoidance you are trying notto instill in your son? “The wonderful thing about pets is that a new one can ease the lingering sadness over the loss of an old friend, but it certainly doesn’t undermine the grief process to take solace in a new friend while at the same time missing an Me eeu eee a their savings account. They knew they had no pension, so every nny was accounted for by my mother and her budgetsheets.” With herfirst job, Ms. Harada says, she went to the bank and opened a checking and savings account and split her first paycheck just as detrimental. themselves from the pain in the future that that pet, too, would hit her. “She wasoffering sympathy and empathy on the onlylevel she had. She had experienced the terrible grief of the loss of a loved old one.” out to my daughter.” made up in order to teach him about saving. For every dollar he one, andshe felt she could reach Ms.Wilhelm concludes thatal- lowinga child to naturally come to grips with traumas in their own way“is another aspect of whyit’s important to let children work through the grief of loss.” Melissa Marsh, in Durham, N.C., agrees that “people...whoreplace their children’s pets on the * # * A few weeks ago I wrote about starting for my 8-year-old son a 401(k)ids account, an account I saves, I match it—no limit. Additionally, I have opened a custodial accountin his name at a discount brokerage firm so that I can begin teaching him thebasicsof investing his moneyin stocks. My purpose: In a nation where financial literacy is sorely lacking, I want home. mom to the bank to cash her fa- the remainder next door betweenthe two. Herpoint, she says, it that “in- vestment education is fine, but along with it help him learn the habit of thrift.” One reader pointed out some important facts about custodial accounts: 1) There are tax implications: Under age 14, a kid’s in- comes a bevy of new cell phone launches.The target: kids between eight and 12, what market- ers call the “tween” generation. Some of the new phones are specially designed for younger kids, with easyto- use interfaces ————_ and a small FINANCES numberof pre—"_ programmed But doesa child this youngreally need a cellphone? And if so, what are the most economicaloptions? A recent survey by the Yankee Group showed that 55% of children aged 13 to 17 have cellphones, up from about a third in 2003. And around 25% of children between eight and 12 now have cellphones, a figure set to rise as more new phonesareintroduced. The marketing flurry is being driven in part by the cellphone industry's need to find new customers. “The U.S. marketis fairly tapped out,” says Linda Barrabee, senior analyst at Yankee Group. “Close to 80% of people between 18 and 65 have a cellphone. The youth market is where the opportunity is.” Yet there are also genuine rea- sons for your children to have their ‘own phones. The Yankee Group survey showed that twothirds of teenagers got their phones not because they wanted them, but because their parents wanted them to be able to get in touch or call for help in emergencies. HEALTH health insurer ————__ started an efWATCH fort to shed ——— some light. Aetna Inc. is making available online the exact. priges it has negoti- ated with Cincinnati-area doctors for hundreds of medical procedures andtests. The initiative, which Aetna hopes to take eventually to other parts of the country, aims to give patients the tools to compar son-shop and make sawier decisions with their healthcare dollars. Some in the health-care industry say the move is likely to push more insurers to follow suit, which in turn would give a significant boost to consumerdriven health plans. , { trip to go anywhere she wanted, flying first class, staying in fivestar hotels, no expense spared to allow herthe opportunity to experience a small slice of the things I have been able to see.” But, he says, she seems reluctant to go. She says she can't choose a destination, for instance, or can’t leave becauseof her dogs. Mr. McKnight has stopped asking. Then, just recently, she told him ofa planto start a home business and was going to take a bank loan to buy necessary equipment. “I offered to give her money and was flatly refused,” he says. “I waswilling to call it an investment and draft up paperwork for either a loan or partial ownership, but that was stalled as well.” After reading my column, Mr. McKnightsays, “I wonder if my mom views my offers as some- thing other than what I am intend- come is taxed at Mom and Dad’s ing? I doubtI will ever bring this up with her, asit is just easier not tax rate; 2) Too much money in a custodial account can ultimately reducefinancial aid for college; 3) look at my offers differently.” Contributions you make into the accountare irrevocable and at the age of majority (18 or 21, depend- to deal with the hassle, But I now Jeff Opdyke covers personalfinance for The Wall Street Journal. Write to him at: @wsj.com a “care team” could be the solution. “Peace of mind is primary,” says Joseph Bradshaw, general manager of WirelessAdvisor.com, a site providing consumerinformation and advice on cellphone plans. “You know your child can always call for help if needed, and youcancall your child if you need to.” Someof the special kids" phones can be expensive, however. A phoneby Firefly Mobile costs $99.99 including 30 minutesof airtime, and additionalcalls cost 25 cents a minute. Wherify Wireless will launch a phone this fall that comeswith a Global Positioning Systein locator, letting you see ex- actly where the phoneis at any time. It will cost around $150, and the cheapest packageis expected to cost less than $20 a month for around 100 to 150 minutes. One cheaper optionis to get a regular adult cellphone and pay about $10 a month to add the child to a family plan, but this has drawbacks too. “The biggest concern is that you're putting the phone in the hands of a person whoisn’t used to paying the bills,” says Mr. Brad- cess. Teenagers are much more avid users of text messaging, picture messaging, music downloading and other “data services” than adults, and the costs can add up in a hurry. By Andrew Blackman Such plans are based on the idea that because people must pay for a big chunkof their care out of pocket—and can build up any money they don’t spend on health care—they will be wiserin how they spend the money. For such an approach to be truly effective, consumers would need to know how much medical treatment costs. In reality, though, that hasn't been the case. In contraSt to other consumerservices, most healthcare pricing isn't readily available for customers to peruse upfront. Reluctance by doctors and health insurers to provide prices has left many patients clueless about the cost of their care until they receive the bill after the fact. Now, with Aetna’s new listings, consumers enrolled in any Aetna health plan will be able to log on + and comparison-shop for procedures and tests ranging from an an- nualphysical to an electrocardiogram to vaccinations. While many health-care experts laud the Aetnainitiative as a move toward price disclosure, some say consumers still need to use the price information with a degree of caution. Mostprice differences have more to do with Aetna's negotiating leverage with a given doctor than with the quality of care from the physician, some doctors argue. Others note that while the prices of most itemized medical services don't vary tremendously from doctor to doctor, the overall cost of treating a patient can—which is why Aetna’s price disclosures are only a first step in bolstering health: care consumerism. Vanessa Fuhrmans plies. If | buy some of those supplies for her at the local teacher‘supply stores and Costco, can | take those expenses off my own taxes as a charitable donation? R.H., Tucson, Ariz. No. This wouldn't be consid ered a charitable donation, Says Martin Nissenbaum of Emst & Young. But make sure your daughtar knows about a special tax break, scheduled to expire at year end, for many teachers who pay for books,chalk and other classroom supplies out of their own pocket. If your daughteris eligible, she may subtract as much as $250 of her qualified expenses when calcu- lating her adjusted gross income. However, “in orderto get this deduction, she would have to incur the expenses herself—so you should give her the money and let . her buy the supplies,” says Mr. Nissenbaum. This deduction is available whether or not she itemizes her deductions. The IRS recently is‘sued a reminder on the subject, urging educatorsto be sure to save all their receipts. To be eligible for this educator deduction, a person must be “a kin- dergarten through grade 12 * lished in 1995. Three years ago, Ms. Capossela was diagnosed with a brain tumor, and Ms. Warnock spearheaded yet another team to care for her. And, after Ms. Capos- sela’s death, Ms. Warnockcreated a Website, sharethecare.org, and Splintered Families And traditional families that could provide round-the-clock care care of a woman with ALS,” or for one another have been “pretty much shattered” by divorce, people who never married and “kids split up all over the country,” says Sheila Warnock, a New York art director who,in the 1980s, became sole caregiverfor her dying mother— and one of a dozen women who cametogether for 3'2 years to care for her best friend after she was diagnosed with cancer. The contrast between caring for her motherwith nooutside support and sharing the responsibilities with a group showed herthat the collaborative approach “can make a huge difference to people who can accept this kind of help,” she says. “The solution is pooling talents andresourcesfrom friends, neighbors and co-workers.” The group cooked and ran er- rands for their friend, a divorced mother with two children. They went with her to the hospital and doctor's appointments, and even helped organize her daughter's wedding. Then, when another acquaintance was diagnosed with cancer soon after their friend's death, they helped put together another group that, among other things, raised more than $100,000 for her medical treatments. Ms. Warnock and another member of the original group, Cappy Capossela, were so inspired by their involvement that they wrote a book titled “Share the Care: How to Organize a Group to Care for Barron’s Insight / By Jay Palmer nermemenee Q: grade and spends lot of her own money on classroom sup- Someone Who Is SeriouslyIll,” pub- The numbers certainly argue for groups of people beyond adult children assisting people with serious conditions, “Baby boomers don’t have as manykids as their parents did,” says Suzanne Mintz, president of the National Family Caregivers Association in Kensington, Md. In 1990, she says, there was an 11-t0-1 ratio between people providing care and people needing it. By 2050, that ratio-is expected to fall to 4 to 1. shaw. Kids on a family plan generally have no limits on whom they cancall or how long they can talk, lor many Hollywood movie stuChocolate Fac 80“it's possible for the kids to run tory,” to be he fol aweek stock pice (MAK) up huge bills by going overthe plan dios, this is a summer of disleer content. But for Imax (IMAX), it’s minutes.” year by “Harry as a season to remember. Prepaid plansoffer a little more The Toronto-based company, Potter and the 10 parental control. “It's a way to give your child a phone where you can which outfits and licensestheaters Goblet of Fire.” aroundthe world, is famous for The popularity ensure you won't go bankrupt,” screens as wide as 100 feet and of mainstream says Sam Simon, chairman of the films on Imax astall as eight stories. Once conTelecommunications Research and fined to museums showingfilms on screens is boost: 4 ™ Action Center in Washington, D.C. wild animals and outer space, the ing the compa“Prepaid plans charge more per Source Thomson/Baseine minute, but you can keep the child screensincreasingly are turning up ny's core busi: atthe local multiplex and offering ness:outfitting theaters with sowithin a budget.” current Hollywoodhits. More than phisticated projection, screen and Teenagers with prepaid plans half of the 259 Imaxequipped the- sound systems,including gear for add money to their accounts less three-dimensional films (viewers than once a month and pay $33.61 aters are in commercial settings. Box-office sales by all U.S.thewear special spectaclesto see whenthey do, Yankee Group data them). In the 12 monthsthrough indicate, whereas those with family aters are down about 10% this year, hurt by 6Oinch plasma TVs June, Imax signed up 51 theaters, plans and other “postpaid” plans and accelerated DVDreleases. But more thantriple the number of a Tun up an average monthly bill of yearearlier. Says Brad Wechsler, coticket sales per screen for main $67.66 Mr. Bradshaw even suggests hav- stream movies shown at Imax the- chief executive with Rich Gelfond: “We have only just begun to ing children usetheir own moneyto aters more than doubled in this year's first seven months, helped scratch the surface of our potential fund the account, sothat they unmarket.” Wall Street isn’t applaud derstand the costs and can decide by a doubling in the numberoftiing, yet. Imax shares, at about how longthey talk. But if they fortles, to four. Now playing on the massive screen: “Charlie and the $10, have gone nowhere this year get and there are no minutesleft, the phone won't work. “So you lose that peace of mind from knowing the child will always be able to get in touch with you.” Ask Dow Jones / By Tom Herman la Whatevertype of plan you choose,be careful to see what ada My daughter teaches third teacher, instructor, counselor, princiditional services your kids can ac- At Last, a Way to Compare Medical Costs onsumers are often kept in the dark about the actual cost of medical care. But last week, a major national fered on several occasions to take his mom “on first-class world ow can you help care for a family member or friend when you also have a fulltime job or children at home? Imax Is Getting the Picture wr back-to-school season numbersallowing the child to call Mom, Dad and a few friends—but no oneelse. reerhaveallowed him to travel the world in top style, and he has of- Mary Harada, in West Newbury, Mass., says that as a child she remembers accompanying her Should You Get a Cellphone for a Preteen? FAMILY Mr. McKnight says my column him thinking about a similar situation, but from slightly different perspective. “I, as a single person, make more money in my 30s than my parents have ever made combined,” he says. Mr. McKnight's income and ca- Caregiving, in a Team pal or aide in a school for least 900 hours during a school year.” But qualified expenses don't include expenses for home schooling, the IRS says. Also, if your daughter has expenses of more than $250, she may be able to'de ductthe excess as an employee business expense, but only if she itemizes, Mr. Nissenbaumadds. a nonprofit group, Sharethecare- giving Inc. in New York, to honor herfriend’s memory andincrease awareness of their model. Ms. Warnockalso updated their book with ideas pioneered by the care groups that have sprung up around the country in at least 30 states. “It's not uncommon for a group to have 40 or 50 people,” she says. “There's an active group in Hawaii that has 100 people taking amyotrophic lateral sclerosis, better known as Lou Gehrig's disease, a fatal neuromuscular disease. “They workin shifts. Part of them are trained to work with the trachea tubes, some do fund-raising.” Take Care of Yourself Ms. Warnock’s experience taking care of her motherand friend simultaneously taught her what she considers the most important caregiving lesson: You have to take care of yourself to take care of others. Her advice: Don't give up the things that give you plea- sure or keep you going. Do nottry to do caretaking 24 hours a day, and don't isolate yourself from your beaiy friends. also advises using a methodical system to recruit the team, identify its members’ skills (coordinator, researcher, chief cook and bottlewasher, shopper. handyman, driver and so forth). Her group used worksheets, calendars, charts to keeptrack of medicines, and phone trees. In manyways,it waslike any volunteer organization, but with a twist. When you're trying to make life at home possiblefor a friend or family member, she says, “it’s different fromjust being a volunteer. There's something unique about helping someone youknow.” Kelly Greene writes for “Encore,” The Wall Street Journal's quarterly Buide to retirement. Write to her at encore@wsj.com Bulls say they could easily rise 15% in the next 12 months. Imax earnings should jumpat least 50% this year, to around 38 cents a share,followed by perhaps 2 40% rise in 2006. Such growth lends real support to a stock trading at about 28 times this year’s profit The company, with a modest mar. ket capitalization of $400 million, doescarryrisks. Its accounting for new theater signings raises eye brows: Part of the signing revenue comesasa onetime upfront payment, meaning somerevenue booked would have to be nullified if theater owner pulled outearly And Imax has $160million ofdebt. But digital technology has given the company an edge. Once a movie is digitized, it's relatively easy and inexpensive to convert it from standard 35-millimeter to the giant, Imax format—formerly a very tedious, expensive process. Imax also has sharply cut the costs of setting up a theater—from$8 mit lion at onepoint to aslittle as $1.5 million now. Jay Palmeris a senior editor of Barron’s magazine, which is avail able online at www.barrons.com: tax applicable exclusion amount for 2004 and 2005 was listed as $1.5 million. But | heard the amount for 2004 was changed during the year 2004, back to the value for 2003 of $1 million. Can you confirm this? C.S., Centennial, Colo. 2 No, what you heard is incor ‘= rect. The basic federalestate. tax exclusion was $1.5 million for 2004, andit’s $4.5 million again for this year. (Of course, bequests from one spouseto the othertypi: cally are tax-free.) | read somewhere that the 15% tax rate on some capltal gains could change Sept. 6, 2005. Is this true, and does It atfect stock and reatestate gains? D.E., Walden, N.Y. No. Based on current law, the 18 top 15% rate on longterm capital gains is scheduled to run through the end of 2008. Naturally, Congress could changeit sooner, than that, but I'm not aware of any changes scheduled next month There are several other capitalgains tax rates. Fordetails, see a publication issued in late June by Congress's Joint Committee on Taxation (www.house.gov/Jct), called “Present Law and Background Information on Certain Expiring Tax Provisions.” Its numberis JCX-50-05. | looked at an IRS publication and found that the estate- t Based oncurrentlaw, the basic exclusion is scheduled to increase to $2 million in 2006, 2007 and 2008 and then to $3.5 million in 2009. In 2010, the federal estate tax is supposedto disappearen tirely—but only for that one year. Congressis likely to make major changes. The House already has approved permanentrepeal of the federal estate tax, but the Senate hasn't. Look for this subject to ‘come up again soonin the Senate. It's unclear what will happen. Tom Herman's “Tax Report” appears Wednesdays in The Wall Street Journal. Send questions. on finances, investments or taxes to: askdowjones.sunday03@ws}.com andinclude your name, address and a daytime telephone number. 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