Dear Harry

: We are two elderly seniors who are just about getting by with our Social Security, interest on CDs, and my husband's pension. Everything we own is in joint names, even our eight-year-old car. We were told we must have wills or the banks could tie up our CDs and bank accounts. This could make it very difficult for the survivor to get money from our checking account and get the interest on our CDs. Is this true? Can we each make our own wills?

What Harry says: With husband and wife joint accounts, the survivor has just as much access as you each have now, so you need not worry on that score. You do not need a will to protect each other. The problem is on the death of the survivor. Who will inherit the estate after you are both gone? I would urge you to have wills to prevent expensive administration and possible quarrels among heirs. Hop into a good bookstore and look at some of the many self-help books that have forms you can fill out that fit Pennsylvania's requirements. If you feel that you can fill in the forms properly, you can have wills without the need for a lawyer. Your estate appears to be simple, and unless you have complex heir situations, such a will should do the trick. Be certain to follow the instructions carefully, especially those about signatures and witnesses.

Dear Harry: I have a number of good reasons to convert my IRA to a Roth IRA. However, the stockbroker who is custodian insists that I must take a Required Minimum Distribution for 2008 before I do this. Why can't I just do the rollover since the entire amount will be taxed this year anyway? Isn't the net result the same for IRS?

What Harry says: The simple answer is that the IRS regulations require it. The result is different in that the Required Minimum Distribution may not be rolled over into the Roth IRA. Of course, you may take the RMD from a different IRA and then roll over the entire amount in the first one. It is not as bad a deal as it may appear, because that RMD will go a long way toward paying the tax on the rollover. The amount of the RMD has to be calculated based on the full balances of all your IRAs on Jan. 1, 2008.

Anyone who makes the mistake of rolling over the entire amount of all his IRAs has until Dec. 31 to reverse the amount of the RMD and avoid a penalty.

Dear Harry: I deal with one of the large stockbrokers. This morning my guy called to tell me that he had a wonderful CD to offer me. I remember your rules on phone calls: Never buy over the phone unless you initiate the call. Never buy on the phone from someone you don't know. I told him I'd call back. The offer is for a 20 year CD with an FDIC-insured bank that bears interest at a solid 6 percent. The interest is paid semiannually, but it is callable at any interest date. The callable feature is what is bothering me. They could decide to call it when interest rates are lower than they are now, and I'd then have to scramble to get a decent rate. Any opinions?

What Harry says: Sure, that callable provision is a problem. However, if this is not your primary investment, it could work out to be just fine. Today, short-term rates are nowhere near bearing that kind of interest, so you're protected there. Even longer-term rates on equivalent quality are well under the rate you're guaranteed. I like it. But stay with an investment below $97,000 so your investment will never exceed the insurance threshold.

Dear Harry: My life insurance broker came to me with an interesting policy he said will revolutionize retirement planning. I am now 65 and still working full-time. I love my work, and I hope to continue for a long time. The proposal goes like this. I put $35,000 into the policy now as a single premium. When I reach 80, I'll get $25,000 a year for the rest of my life. I can buy double the amount for less than double the $35,000. If I die before I'm 85, the company will pay a lump sum of the premium plus interest at a minimum of 4 percent. If I die after getting the first payment, my heirs get nothing. What do you think?

What Harry says: My parents lived into their 90s so I have a good shot at having a neat backup to my retirement income. I had to use my trusty HP12C to do all the calculations, and here we go. At 85, your life expectancy is 6.9 years. Using an interest rate of 6 percent, that will require a fund of $116,635 to give you the $25,00 a year. To accumulate that amount in 20 years (from 65 to 85 years old) at 6 percent will take an initial fund of $36,367. This indicates that the company is using an interest rate of slightly higher than 6 percent . . . not a bad deal at all. This is especially so since your family history indicates that you probably have a longer than normal life expectancy.

Dear Harry: I have a big problem with IRS. My wife and I have been divorced since 2006, but we were separated long before. The divorce decree and the tentative agreement before it requires me to be responsible for 60 percent of the cost of care for the children. I am fully responsible for all medical bills and medical insurance. The IRS disallowed my dependency exemptions and child credits on my tax returns for 2005 and 2006. I got an extension for 2007 pending resolution of this problem. They claim that I'm not entitled to the deductions because the children do not live with me for more than six months during the year. My accountant has given them copies of the court order and a court worksheet showing that I did actually pay the required 60 percent. IRS responded that the documents made no difference. He then wrote to IRS asking for an appeal of that decision. IRS replied that there's no dispute on the facts, but that I had no claim as a matter of law, so they denied me the appeal and said I could go to court but I could not win. They also said that they were closing the case. How can I get these toads to give me that right of appealing their decision? If I finally lose, do I have a way to make the accountant responsible for the penalties and interest? Please guide me.

What Harry says: The IRS people are not toads here; your accountant is. I'm sending you a copy of IRS Code Section 152 which nails this down. For you to get the exemption, your wife (the custodial parent for more than six months) must provide you with a Form 8332 which you must attach to your return. That releases the right of claiming them to you. In many cases, this is a requirement as part of the divorce decree. Obviously, that does not apply to you or you would have gotten the form. This is true even if you provided 100 percent of the cost of care. There is an exception to the rule, but it does not apply in your case because only you and your wife are involved in the support. Yes, you may hold your accountant responsible for your problem. You have an unquestionable claim for the penalties and possibly some of the interest. He's lucky that IRS hasn't hit him for his pushing a clearly unlawful claim. Sorry! *

Write Harry Gross c/o the Daily News, Box 7788, Philadelphia, PA 19101. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.