Legacy Planning Law Group
Weekly Blog

Estate & Elder Law

Protect Your Family. Preserve Your Legacy

If you’re interested in learning more about our process and the solution for you and your family, please book your free 15-minute call with us today!

Social Security Increase

Can You Increase Your Social Security Benefits?

Can You Increase Your Social Security Benefits?

The desire to get the largest possible benefits from Social Security is a relatively new phenomenon. For decades, people received their monthly benefit check and that was it. However, in the late 1990s, a new law let seniors over age 66 work without any reduction in benefits, says the article “Social Security & You: Seniors obsess over ‘maximizing’ their Social Security” from Tuscon.com. The law led to loopholes that became known as “file and suspend” and “file and restrict.” In a nutshell, they allowed retirees to collect dependent spousal benefits on a spouse’s Social Security record, while delaying their own benefits until age 70.

Congress eventually realized that these loopholes violated the basic concept of the program. Benefits to spouses were always known as “dependent” benefits. To claim benefits as a spouse, you had to prove that you were financially dependent upon the other spouse to collect benefits on their record. However, the loophole let people who were the primary wage earner in the family claim benefits as a “dependent” of the other spouse. Five years ago, Congress closed that loophole.

More specifically, Congress closed the ability to file-and-suspend. It also put file-and-restrict on notice. If you turned 66 before January 2020, you could still wiggle through that loophole, and there are some people who are still eligible. That’s where the term “maximizing your benefits” originated.

Can you get a bigger Social Security check, if you don’t fit into the exception noted above? The only real strategy to maximizing your benefits is simply to wait. The equation is pretty simple. If you wait until your Full Retirement Age (FRA), you will receive 100% of your benefit rate. If you can wait until age 70, you’ll receive 132% of your benefit.

In some households, the higher income earner waits until age 70 to file for retirement, so that the surviving spouse will one day receive higher surviving spouse benefits.

But that’s not the best advice for everyone. If you or your spouse suffer from a chronic illness, it may not make sense to wait.

If you or your spouse have lost your jobs, as so many have because of the pandemic, then Social Security may be the safety net that you need, until you are able to return to some kind of paid employment.

There may be other reasons why you might need to take your benefits earlier, even earlier than your FRA. Some households start taking their Social Security benefits at age 62, as a way to augment other income.

If you don’t already have a “My Social Security” account set up on the Social Security Administration’s portal, now is the time to do so. The Social Security Administration stopped sending annual statements years ago, but you can go into your account and download the statements yourself and start planning for your future.

Reference: Tuscon.com (Feb. 10, 2021) “Social Security & You: Seniors obsess over ‘maximizing’ their Social Security”

Read more related articles at:

10 Ways to Increase Your Social Security Payments

9 ways to ‘life hack’ your way to larger Social Security benefits

How to Increase Your Social Security Benefits

Also, read one of our previous Blogs at:

What are the Major Social Security Changes for 2021?

Click here to check out our On Demand Video about Estate Planning.

Spouse dying in hospital

Get Estate Plan in Order, If Spouse Is Dying from a Terminal Illness

Get Estate Plan in Order, If Spouse Is Dying from a Terminal Illness

Thousands of people are still dying from COVID-19 complications every day, and others are dealing with life-threatening illnesses like cancer, heart attack and stroke. If your spouse is ill, the pain is intensified by the anticipated loss of your life partner.

Wealth Advisor’s recent article entitled “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now,” says that it’s frequently the attending physician who suggests that your spouse get his affairs in order.

Your spouse’s current prognosis and whether he or she’s at home or in a hospital will determine whether updates can be made to your estate plan. If it has been some time since the two of you last updated your estate plan, you should review the planning with your elder law attorney or estate planning attorney to be certain that you understand it and to see if there are any changes that can and should be made. There are five issues on which to focus your attention:

A Fiduciary Review. See who’s named in your estate planning documents to serve as executor and trustee of your spouse’s estate. They will have important roles after your spouse dies. Be sure you are comfortable with the selected fiduciaries, and they’re still a good fit. If your spouse has been sick, you’ve likely reviewed his or her health care proxy and power of attorney. If not, see who’s named in those documents as well.

An Asset Analysis. Determine the effect on your assets when your partner dies. Get an updated list of all your assets and see if there are assets that are held jointly which will automatically pass to you on your spouse’s death or if there are assets in your spouse’s name alone with no transfer on death beneficiary provided. See if any assets have been transferred to a trust. These answers will determine how easily you can access the assets after your spouse’s passing.

A Trust Assessment. Any assets that are currently in a trust or will pass into a trust at death will be controlled by the trust document. See who the beneficiaries are, how distributions are made and who will control the assets.

Probate Prep. If there’s property solely in your spouse’s name with no transfer on death beneficiary, those assets will pass according to his or her will. Review the will to make sure you understand it and whether probate will be needed to settle the estate.

Beneficiary Designation Check. Make certain that beneficiaries of your retirement accounts and life insurance policies are current.

If changes need to be made, an experienced elder law or estate planning attorney can counsel you on how to best do this.

Reference: Wealth Advisor (Jan. 26, 2021) “Your Spouse Is Dying: 5 Ways To Get Your Estate In Order Now”

Read more related articles at:

How to get your affairs in order if your spouse is dying

Planning During Terminal Illness

Caring for someone with a terminal illness: Planning for deterioration and death

Also, read one of our previous Blogs at:

Surviving Spouse Needs An Estate Plan

Click here to check out our On Demand Video about Estate Planning.

 

 

Farmers-Dementia

Do Farmers Have a Higher Chance of Getting Dementia?

Do Farmers Have a Higher Chance of Getting Dementia?

With traits such as hearing loss, depression and social isolation seen in both agriculture workers and those who suffer with dementia, University of Iowa College of Public Health assistant professor, Kanika Arora sought to determine if there was a connection.

In the first of its kind to the U.S. study, researchers used previous data from the Health and Retirement Study to discover that agriculture workers scored lower on tests related to memory, attention, and processing speed, according to CBS 2 Iowa’s recent article entitled “Recent study shows agriculture workers have a greater chance of having dementia.”

The Iowa study shows that agricultural workers have lower resistance against the effects of dementia, compared to people in professional or technical jobs. Although the onset of the disease may be delayed due to higher resistance to damage to the brain among professional and technical workers, the rate of decline may be faster due to the greater accumulation of brain pathology, Arora explained.

The University of Michigan Health and Retirement Study is a longitudinal panel study that surveys a representative sample of approximately 20,000 people in America, supported by the National Institute on Aging and the Social Security Administration.

With hundreds of farmers calling Iowa home, and many working past the age of standard retirement, it raised concerns for a possible delay in a dementia diagnosis.

“As far as Iowans are concerned, this is important for two reasons. How to remain productive on the farm and how to maintain safety given memory loss, language problems and other unpredictable behaviors that come with dementia,” said Arora.

Researchers cannot directly examine the role of pesticide exposure to dementia, but previous studies on the amount of exposure to agricultural workers show the same test scores. Arora hopes future research is done on this connection.

The results of the study, recently published in the peer-reviewed Journal Gerontology: Social Sciences, can help researchers develop effective interventions to protect older farmers.

The researchers could not attribute the association to hearing impairment or depression—factors independently linked to both agriculture and dementia—the impact of pesticide exposure among agricultural workers may warrant further study, they said.

Reference: CBS 2 Iowa (Jan. 31, 2021) “Recent study shows agriculture workers have a greater chance of having dementia”

Read more related articles at:

Rural dementia: We need to talk

Study shows working in agriculture poses higher risk of developing dementia

Also, read one of our previous Blogs at:

What Do Farmers Need to Create an Estate Plan?

Click here to check out our On Demand Video about Estate Planning.

Larry King Will

What Is Status of Larry King’s Handwritten Will?

What Is Status of Larry King’s Handwritten Will?

Larry King’s widow Shawn is set to go to court over a recently discovered hand-written will that cuts her out of a share of his fortune.

Fox News reports in the article entitled “Larry King’s widow Shawn King plans to contest star’s will in court” after King’s handwritten will was discovered. The will is said to say that his $2 million estate would be divided among his five children.

The document is said to have been drafted on October 17, 2019—just two months after Larry filed for divorce from Shawn. The new will doesn’t mention her at all and also lists his now-deceased children Chaia and Andy as beneficiaries. This will was written a few months before the loss of 65-year-old Andy and 51-year-old Chaia, who died within weeks of each other.

Larry’s three remaining children — Larry King, Jr., 59, Cannon, 20, and Chance, 21 — were also named. Cannon and Chance are King’s children with Shawn. However, Shawn contends that there was already a plan in place between she and King that wasn’t reflected in the alleged document.

“We had a very watertight family estate plan,” she told Page Six of a plan she and her husband drew up “as a couple” in 2015.

“It still exists, and it is the legitimate will. Period,” she remarked. “And I fully believe it will hold up, and my attorneys are going to be filing a response, probably by the end of the day.”

The handwritten will is complicated by the deaths of his children in 2020; in addition, Larry also told Page Six before his death that he and Shawn had once again become close. However, it is not known if the divorce was still moving forward.

Shawn also said that she and her husband spoke daily and claimed she was never made aware of an amendment to his will.

“It beats me!” she said when asked why she thinks Larry drafted the new document.

Their two sons were also “shocked” to hear about the change, she said, and claimed they “are not happy about this.”

Shawn also said she thinks someone exerted influence over the broadcast legend to have him write the new will, although offered no additional evidence of this contention.

“Based on the timeline, it just doesn’t make sense,” she said, noting that she doesn’t believe he would have cut her out due to the filing of divorce papers.

According to People magazine, Larry King allegedly wrote in the document, “This is my Last Will & Testament. It should replace all previous writings. In the event of my death, any day after the above date, I want 100% of my funds to be divided equally among my children Andy, Chaia, Larry Jr., Chance & Cannon.”

It looks like under the current will, Shawn would likely get around $300,000 after the $2 million estate was divided among King’s sons and presumably the survivors of his late children. However, she says it’s the principle.

Larry King’s attorney said that while the firm has no comment on Shawn’s position, they feel that “the will, which we will be asking the court to admit to probate on March 25th, reflects Larry’s intent to divide his estate equally among his children.”

Reference: Fox News (Feb. 15, 2021) “Larry King’s widow Shawn King plans to contest star’s will in court”

Read more related articles at:

Larry King’s wife, son on opposite sides in court battle over late talk-show host’s handwritten will

Larry King’s widow disputes handwritten will

Also, read one of our previous Blogs at:

Did Larry King have an Estate Plan?

Click here to check out our On Demand Video about Estate Planning.

Newest Alzheimer's Treatment

The Latest Treatments for Alzheimer’s Disease

The Latest Treatments for Alzheimer’s Disease

A two-year study monitored 272 people, whose brain scans showed Alzheimer’s. They discovered that patients who took the drug had a 32% slower rate of decline than those who were given a placebo, according to AARP’s recent article entitled “The Alzheimer’s Drugs Showing Early Promise.”

“It’s very encouraging because this is the first time a drug of its kind has had positive results in early-stage trials,” says Lon Schneider, M.D., Della Martin Chair in psychiatry and neuroscience at the Keck School of Medicine of the University of Southern California.

The drug, known as a monoclonal antibody, works by attaching to the hard plaque in the brain made from amyloid (a protein associated with Alzheimer’s).

While these initial findings are promising, Schneider says more data is required. “It may have been everyone just had a small cognitive decline, in which case the results aren’t as significant,” he says.

However, this is not the only news from Alzheimer’s researchers.

“There are several new drugs either close to getting FDA approval, or in development, that promise to really change the playing field when it comes to treatment of Alzheimer’s disease,” says Marwan Sabbagh, M.D., director of the Cleveland Clinic Lou Ruvo Center for Brain Health in Las Vegas.

Here are some of the most promising drugs in trials:

  • Aducanumab: This drug is seeking FDA approval. It is another monoclonal antibody similar to donanemab that binds to the hard amyloid plaques. “It will be a game changer if it’s approved, because this will be the first drug shown to actually slow down the progression of Alzheimer’s disease,” Sabbagh remarked.
  • Pimavanserin: This antipsychotic drug is already approved to treat hallucinations and delusions in people with Parkinson’s disease, but it is now under FDA review for the treatment of some of the behavioral and psychological symptoms of all dementias. “Research shows that it’s very effective also in treating dementia-related psychosis or hallucinations,” Sabbagh says. “This is important because these sorts of episodes are the main reason patients with Alzheimer’s get placed in memory care facilities. If caregivers can manage these symptoms, more people will be able to stay at home.”
  • Atuzaginstat: Studies show that the bacteria P. gingivalis (the cause of gum disease) can impact the brain and cause Alzheimer’s disease. This drug is in clinical trials to determine if it can stop gingipains—the toxic proteins the bacteria release—which can damage healthy brain cells.
  • NDX-1017: This is administered as a daily injectable. It is a small molecule that improves the activity of hepatocyte growth factor (HGF), a protein found in your body’s tissues, including your brain. HGF hopefully will strengthen the synapses or connections between your brain cells, thus reversing some of the damage caused by Alzheimer’s. Research shows that it works quickly, making an impact in as little as eight days.
  • ALZ-801: This medication is taken orally rather than as an injection. Unlike monoclonal antibodies, which latch onto amyloid plaques and eliminate them, ALZ-801 attacks earlier in the process, blocking the amyloid from ever forming.
  • Lenalidomide (Revlimid): This is used to treat leukemia or multiple myeloma but is now being studied for its potential to treat Alzheimer’s.

Reference: AARP (Jan. 22, 2021) “The Alzheimer’s Drugs Showing Early Promise”

Read more related articles here:

Alzheimer’s Treatments: What’s on the Horizon?

A new Alzheimer’s drug: From advisory panel to FDA — what’s at stake here?

New approaches to symptomatic treatments for Alzheimer’s disease

Also, read one of our previous Blogs at:

New Blood Test May Make Alzheimer’s Diagnosis Easier

Click here to check out our On Demand Video about Estate Planning.

Scariest issues of Retirement

What are the Scariest Statistics for Retirement?

What are the Scariest Statistics for Retirement?

Think Advisor’s recent article entitled “11 Scariest Retirement Statistics: 2020” says that there is a lack of preparation, savings difficulty and general uncertainty that American retirees are facing. Here are those scary stats:

  1. Just a quarter of Americans are on a trajectory to maintain their lifestyles in retirement. The other 75% will need to work longer, move to lower-cost housing and cut spending to maintain their standard of living, largely due to the coronavirus downturn.
  2. The Social Security trust funds would be empty by 2023, without the payroll tax. While President Trump let employers temporarily defer the employee portion of payroll taxes, he said the deferred taxes could later be forgiven, or the cut made permanent. When he signed the order, he vowed to “terminate the tax,” if reelected. Republican lawmakers subsequently debuted a plan to fund any shortfalls from the Treasury.
  3. Social Security benefits will be decreased by 21% if the trust fund runs out. Congress will have to intercede, or it could happen 10 years from now, if not sooner.
  4. Those born in 1960 will have a big problem because of the complicated formula the Social Security Administration uses to calculate benefits. Pre-retirees born in 1960 will see a nearly 15% cut to their lifetime benefits from Social Security when it’s time to collect. If the pandemic suppresses the economy into 2022, those cuts will impact more pre-retirees. The impact to their Social Security benefits will also be permanent.
  5. The 2021 Social Security cost of living adjustment, or COLA, will be just 1.3%. Retirees should note that rising health care costs and a potential 6% increase in Medicare Part B premiums may absorb that benefit increase.
  6. More than 50% of Americans think the economy is worse now than in 2008, with 51% of Americans seeing the COVID slowdown as worse than the 2008 recession. A survey from Edelman Financial Engines also found that 26% had withdrawn money from retirement or savings for living expenses.
  7. About 60% of retirement savers have fallen behind, according to a TIAA study. Among these, 30% said it was directly due to the pandemic.
  8. Internet searches for “move out of the U.S.” have increased 16 times. International Living magazine says it had seen the jump in search traffic around the phrase since May. A total of 20% of respondents in a survey it conducted also said they wanted to move due to the pandemic. However, just 45% cited a desire to save money.
  9. Approximately 42% of investors sold stock, and most of them (88%) of them regretted it. In response to the drop in stocks in mid-March last year, 42% of investors in a survey by MagnifyMoney sold at least one stock and 24% sold all their holdings. About 69% of those who sold stock at the start of the pandemic greatly regretted it, and 19% said they were somewhat regretful.
  10. Roughly 80% of older Americans don’t understand retirement planning and don’t know the basics of how to successfully plan for a financially secure retirement, according to a study by The American College of Financial Services. The survey also found only 30% of respondents had a plan in place to fund long-term care needs, and just one in four actually had long-term care insurance.
  11. About 3 million workers may have been driven into early retirement due to the pandemic. From March to August of 2020, 2.8 million older workers might have been pushed out of their jobs prematurely, with economic turmoil and poor health making it hard for them to resume their careers elsewhere, according to by the Schwartz Center for Economic Policy Analysis at the New School. The report found that 38% of unemployed older adults stopped looking for work and left the workforce, and an additional 1.1 million were expected to do likewise.

Reference: Think Advisor (Oct. 30, 2020) “11 Scariest Retirement Statistics: 2020”

Read more related articles at:

Scary Statistics on Retirement Readiness

15 Scary Retirement Statistics

Also, read one of our previous Blogs at:

How Do I Include Retirement Accounts in Estate Planning?

Click here to check out our On Demand Video about Estate Planning.

credit cards

How Do I Cancel a Loved One’s Credit Cards and Manage Their Points, After They Die?

How Do I Cancel a Loved One’s Credit Cards and Manage Their Points, After They Die?

First, you should get legal advice before you start delving into the deceased person’s estate. Contact an experienced estate planning attorney. Typically, the executor of the deceased’s estate will be in charge of these tasks.

Insider’s recent article entitled “How to cancel a loved one’s credit cards and manage their points after they die” provides some general tips on the steps to take to cancel credit cards and manage loyalty points, after a family member or close friend passes away.

Review the situation and gather documents. After a death, there’s a lot to do. Once you receive a death certificate, the executor must begin managing the deceased’s finances.

First, you want the credit bureaus to note the death in the deceased’s credit report and to get a list of all credit cards they owned. You can contact one of the three nationwide credit bureaus (Equifax, Experian, or TransUnion) to tell them about the death and get a copy of their credit report. The Social Security Administration usually notifies the credit bureaus of the death. However, personally contacting them will make certain that a death notice is entered in their credit report. This will decrease the risk of identity theft. When noted, lenders will see that the individual is dead and won’t issue credit. You only need to contact one bureau because they will automatically notify the others.

How to close the deceased’s credit cards. After you get the credit report, identify all open credit cards and contact each one to notify them of the death. Each issuer will have a different procedure for closing the card, but most will ask you to send a copy of the death certificate. Lenders may also automatically close cards when they see the death notice on the credit bureau report.

Paying off credit card debt after death. The CARD Act of 2009 set the rules for credit card debt after death. Once the lender is notified, it will close the credit card and provide a final bill to the estate within 30 days. While the estate is being settled, they can’t impose additional late fees, annual fees, or over-limit fees. However, the interest on the debt continues to accrue. Note that if the estate pays the debt within 30 days of receiving the final bill, there’s no additional interest charged.

Credit card rewards after death. Every credit card has its own rules for managing points after death. For instance, American Express Membership Rewards has a process to take ownership of an account, and Chase Ultimate Rewards terms state that “If we’re notified of your death, your points will be automatically redeemed for cash in the form of an account statement credit.” The miles and points earned with an airline or hotel are subject to the terms of that program. Review the rules of each credit card, airline and hotel loyalty program to understand how points will be managed.

How to simplify life for your family. You can make things easier for your loved ones, if you make a plan to handle your points, miles and credit card rewards. Similar to other assets, you should explain how you want your points to be used in your will. Ask an experienced estate planning attorney to help you.

Reference: Insider (Feb. 1, 2021) “How to cancel a loved one’s credit cards and manage their points after they die”

Read more related articles at:

How to cancel credit cards for someone who is deceased

6 steps to take when a credit card holder dies

Also, read one of our previous Blogs at:

Does My Mom Have to Pay My Dad’s Credit Card Debt after He Dies?

Click here to check out our On Demand Video about Estate Planning.

timeshare

Can You Be Forced to Inherit a Timeshare?

Can You Be Forced to Inherit a Timeshare?

Ask anyone who ever purchased a timeshare and changed their mind about it. Getting rid of a timeshare can be problematic. However, imagine if your parents purchased a timeshare and left it to you, with all the financial obligations? Some timeshare companies are now trying to make people continue to pay after they have died, warns a cautionary article “How to Avoid Inheriting a TImeshare You Don’t Want” from KSL-TV

One woman’s parents loved their timeshare. They travelled to one for skiing, another to relax in the sun, and others according to availability and their travel plans. The entire family went on trips and all enjoyed the flexibility. However, when both parents passed away just a few months apart, the timeshare company started sending letters demanding payment. The siblings didn’t want any part of it.

There had not been any discussions with their parents about what would happen to the timeshare. One of the daughters decided to put the monthly fee onto her credit card to be paid automatically, thinking this would be a short-term issue. When the timeshare company did not respond to the children’s attempt to contact the company to shut down the account, she had the automatic payments stopped. A collection notice showed up and demanded payment immediately.

However, is the family legally obligated to pay for the parental timeshare?

If you die owning a timeshare, it does become part of your estate and obligations are indeed passed onto the next-of-kin or the estate’s beneficiaries. However, they do not have to accept it, in the same way that anyone has the right to refuse any part of an inheritance. No one is legally obligated to accept something just because it was bequeathed to them. This is known as the right to disclaim, but it’s not automatic.

A local estate planning attorney will know how your state governs the right to disclaim. Generally speaking, a disclaimer of interest must be filed with the probate court, stating that you reject the timeshare. There are time limits–in some states, you have only nine months after the death of a loved one to file.

When the next-of-kin rejects the timeshare, it may go to the next heir, and the next, and the next, etc. Every family member must file their own disclaimer. If the timeshare is disclaimed by all heirs, it is likely that the timeshare company will foreclose on the timeshare. There may be leftover debts for unpaid fees, and the estate may have to fork over those payments.

A few tips: if you are planning on refusing a timeshare, you cannot use it. Don’t try it out, let a friend use it or go one last time. If you wish to disclaim something, you cannot receive any benefit of the thing you are disclaiming. Once you receive a benefit, the opportunity to disclaim it is gone.

Unwanted timeshares usually sell for far less than the original purchase price. Selling a timeshare involves a market loaded with scammers who promise a quick sale, while charging thousands of dollars upfront.

If possible, speak with your parents and their estate planning attorney to head the problem off in advance.

Reference: KSL-TV (Jan. 25, 2021) “How to Avoid Inheriting a TImeshare You Don’t Want”

Read more related articles at:

How Not to Inherit Mom’s Timeshare

How to legally refuse a timeshare inheritance

Also, read one of our previous blogs at:

Is My Dad’s Timeshare Part of His Estate?

Click here to check out our On Demand Video about Estate Planning.

per stirpes vs per capita

What’s the Difference between Per Stirpes vs. Per Capita in Estate Planning?

What’s the Difference between Per Stirpes vs. Per Capita in Estate Planning?

When creating an estate plan, one of the basic documents you need is a will. In estate planning, it’s important to distinguish between per stirpes and per capita distributions. These are two terms you are likely to come across when creating your estate plan, says Yahoo Finance’s recent article entitled “Per Stirpes vs. Per Capita in Estate Planning.”

Per stirpes is Latin and means “by branch” or “by class.” When this term is used in estate planning, it refers to the equal distribution of assets among the different branches of a family and their surviving descendants. This lets the descendants of a beneficiary keep inherited assets within that branch of their family, even if the original beneficiary passes away. The assets would be equally divided between the survivors. Per stirpes distributions essentially create a “trickle-down” effect: assets can be passed on to future generations if a primary beneficiary passes away.

In contrast, “per capita” is also a Latin term that means “by head.” When you use a per capita distribution method for estate planning, any assets you have would pass equally to the beneficiaries who are still living when you pass. The share portions would adjust accordingly, if one of your children or grandchildren were to die before you.

Whether it makes sense to use a per stirpes or per capita distribution in your estate plan can depend for the most part, the way in which you want your assets to be distributed after you’re gone.

Per stirpes allows you to keep asset distributions within the same branch of the family and eliminates the need to amend or update wills and trusts when a child is born to one of your beneficiaries or a beneficiary passes away. This method can also help to minimize the potential for infighting among beneficiaries, since asset distribution takes a linear approach. However, an unwanted person could take control of your assets.

With per capita, you can state precisely who you want to name as beneficiaries and receive part of your estate. The assets are distributed equally among beneficiaries, based on the value of your estate at the time you pass away.

Per stirpes and per capita distribution rules can help you determine how your assets are distributed after you die.

Talk with an experienced estate planning attorney to fully understand the implications of each one for your beneficiaries, including how they may be affected from a tax perspective.

Reference: Yahoo Finance (Jan. 7, 2021) “Per Stirpes vs. Per Capita in Estate Planning”

Read more related articles at:

Per Stirpes vs Per Capita Estate Distributions

Per Stirpes vs. Per Capita in Estate Planning

Also, read one of our previous Blogs at:

Are My Beneficiary Designations Trouble for My Heirs?

Click here to check out our On Demand Video about Estate Planning.

Power of Attorney

When Does a Power of Attorney Fail to Do Its Job?

When Does a Power of Attorney Fail to Do Its Job?

A power of attorney is an essential component of a comprehensive estate plan. However, there are at least two important situations when the power of attorney (POA) will not be recognized and followed.

The IRS and Social Security Administration don’t recognize traditional POAs, explains Forbes’ recent article entitled “Two Times When Your Power Of Attorney Isn’t Going To Work.”

The IRS requires the use of its Form 2848, “Power of Attorney and Declaration of Representative” before it will let anyone act on your behalf. This form is required when an agent, even a relative, tries to handle your tax matters, when you are not able to so.

One of the requirements of Form 2848 is that it requires you to state the tax matters and years for which the agent is authorized to act. Form 2848 also requires you to list the type of tax, the IRS form number and the year or periods involved. That is different from a traditional POA to handle financial matters, which frequently has a blanket statement allowing the agent to take a broad range of actions on your behalf in certain matters.

For a married couple that files joint tax returns, each spouse must also separately complete and sign a form. They cannot simply execute a joint form.

Technically, the IRS could accept other POAs, as indicated by the instructions to Form 2848. However, as you can see a POA must meet all the IRS’ requirements to be accepted.

The Social Security Administration is much the same. When you need someone to manage your Social Security benefits, you contact the Social Security Administration and make an advance designation of a representative payee.

This lets you name one or more people to manage your Social Security benefits. The Social Security Administration then is required to work with the named individual or individuals, in most cases.

A person who already is receiving Social Security benefits may name an advance designee at any time. A first-time claimer can also name the designee during the claiming process.

This designee can be changed at any time.

If you do not name any representatives, the Social Security Administration will designate a representative payee on your behalf, if it determines that you need help managing your money. Relatives or friends can apply to be representative payees, or the Social Security Administration can select someone.

Reference: Forbes (Jan. 28, 2021) “Two Times When Your Power of Attorney Isn’t Going to Work”

Read more related articles here:

How to Handle Sibling Disputes Over a Power of Attorney

The Top Misconceptions About a Power of Attorney

Also, read one of our previous Blogs at:

Can You Amend a Power of Attorney?

Click here to check out our On Demand Video about Estate Planning.

Join Our eNews