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Power of Attorney

The Second Most Powerful Estate Planning Document: Power of Attorney

The Second Most Powerful Estate Planning Document: Power of Attorney.  All too often, people wait until it’s too late to execute a power of attorney. It’s uncomfortable to think about giving someone full access to our finances, while we are still competent. However, a power of attorney can be created that is fully exercisable only when needed, according to a useful article “Power of attorney can be tailored to circumstances” from The News-Enterprise. Some estate planning attorneys believe that the power of attorney, or POA, is actually the second most important estate planning document after a will. Here’s what a POA can do for you.

The term POA is a reference to the document, but it also is used to refer to the person named as the agent in the document.

Generally speaking, any POA creates a fiduciary relationship, for either legal or financial purposes. A Medical or Healthcare POA creates a relationship for healthcare decisions. Sometimes these are for a specific purpose or for a specific period of time. However, a Durable POA is created to last until death or until it is revoked. It can be created to cover a wide array of needs.

Here’s the critical fact: a POA of any kind needs to be executed, that is, agreed to and signed by a person who is competent to make legal decisions. The problem occurs when family members or spouse do not realize they need a POA, until their loved one is not legally competent and does not understand what they are signing.

Incompetent or incapacitated individuals may not sign legal documents. Further, the law protects people from improperly signing, by requiring two witnesses to observe the individual signing.

The law does allow those with limited competency to sign estate planning documents, so long as they are in a moment of lucidity at the time of the signing. However, this is tricky and can be dangerous, as legal issues may be raised for all involved, if capacity is challenged later on.

If someone has become incompetent and has not executed a valid power of attorney, a loved one will need to apply for guardianship. This is a court process that is expensive, takes several months and leads to the court being involved in many aspects of the person’s life. The basics of this process: three professionals are needed to personally assess the “respondent,” the person who is said to be incompetent. The respondent loses all rights to make decisions of any kind for themselves. They also lose the right to vote.

A power of attorney can be executed quickly and does not require the person to lose any rights.

The biggest concern to executing a power of attorney, is that the person is giving an agent the control of their money and property. This is true, but the POA can be created so that it does not hand over this control immediately.

This is where the “springing” power of attorney comes in. Springing POA means that the document, while executed immediately, does not become effective for use by the agent, until a certain condition is met. The document can be written that the POA becomes in effect, if the person is deemed mentally incompetent by a doctor. The springing clause gives the agent the power to act if and when it is necessary for someone else to take over the individual’s affairs.

Having an estate planning attorney create the power of attorney that is best suited for each individual’s situation is the most sensible way to provide the protection of a POA, without worrying about giving up control while one is competent.

Reference: The News-Enterprise (Feb. 24, 2020) “Power of attorney can be tailored to circumstances”

Read More About this subject at:

9 Things You Need To Know About Power Of Attorney/Forbes

Power of Attorney/AmericanBarAssociation

Also read our previous Blogs at:

Why Do I Need a Power of Attorney?

C19 UPDATE: If You Have Not Yet Named Someone with Medical Power of Attorney, Do It Now

What Is the VA’s Plan for Long-Term Care for Baby Boomers?

What Is the VA’s Plan for Long-Term Care for Baby Boomers?  Teresa Boyd, Assistant Deputy Undersecretary for Health at the Veterans Health Administration recently told House Veterans Affairs Subcommittee on Health members they would have to wait another few weeks before the VA’s “Elderly Strategic Plan” will be ready for release. Even so, lawmakers asked the VHA official about issues found in a recent Government Accountability Office report.

Military.com’s recent article entitled “Lawmakers Scrutinize VA’s Plans to Provide Long-Term Care for Aging Baby Boomers” reports that there are currently about 3.2 million veterans aged 65 years or older using VA health care services. The GAO found that the VA anticipates the amount of long-term care provided to veterans with service-connected disabilities will increase by 18% from fiscal 2017 to 2037, plus another 5% to provide the services to post-9/11 veterans.

The government watchdog report identified three issues facing the VA, as it prepares for a generation of aging Baby Boomers:

  1. Staffing shortages
  2. Access to specialized providers; and
  3. Trouble getting to vets in rural areas.

Boyd said that the VA’s plan will address the concerns listed by the GAO.

Despite the VA’s ongoing improvements to scholarship and student loan payback programs to attract more staff, Representative Conor Lamb, D-Pennsylvania, wasn’t as optimistic. He’s concerned the current administration’s actions against VA unions will detract those the VA is trying to court. The Trump administration had cut a type of pay union representatives receive, while pursuing grievances on behalf of bargaining units and requiring union staff to pay for office space.

“The type of people who are going to take a home health aide or assistance job are often the people who need that sort of protection and support the most,” he said. “And I think for us to recruit the best of the best in that category for the next generation, you want the people who are already there telling their friends, ‘Hey, VA’s a great place to work. They stick up for us; they pay us well; they take care of our needs if we get sick … ‘”

Lamb asked the VA to consider this, as it looks at the obstacles found in the GAO report.

Meanwhile, Brownley and other lawmakers advocated for more investments in the VA’s in-home, long-term care programs.

“In recent years, stakeholders have largely focused on VA’s community care and caregiver programs. While these are essential areas for VA to get right, the scale of the silver tsunami is something VA cannot afford to get wrong,” Brownley said. “Millions of veterans and their families are relying on us to ensure their later years are as dignified and healthy as possible.”

Boyd agreed that many seniors want to remain in their own homes as long as possible, rather than moving to a facility for their long-term care. Boyd reported that the results of one of the VA’s in-home programs, Choose Home, have played a role in developing the strategic plan to be released in the next few weeks.

Reference: military.com (March 9, 2020) “Lawmakers Scrutinize VA’s Plans to Provide Long-Term Care for Aging Baby Boomers”

Check out more related articles at :

The 2030 Problem: Caring for Aging Baby Boomers

Long-term Care Planning for Baby Boomers: Addressing an Uncertain Future

You can also read one of our previous Blogs at :

Do I Need Long-Term Care and Why?

What is the Difference between Guardianship and Power of Attorney?

What is the Difference between Guardianship and Power of Attorney? Protecting yourself or a loved one can take many different forms, since aging takes a toll on the ability to handle financial and medical decisions. In most situations, guardianship or a power of attorney does the trick, says the article “Guardianships vs. Powers of Attorney” from the Pittsburgh Post-Gazette.  How to know which is the best one to use?

A guardianship is a court-authorized assignment of surrogate decision-making power for the benefit of a person who has lost the ability to make informed decisions on their own, often described as a person who has become incapacitated. The decisions that another person can make on their behalf can be very broad, or they can be very specific.

If a person becomes incapacitated, either through a slowly progressing illness like dementia or quickly, as the result of an accident, a judge will appoint a person or sometimes an organization to handle health care and financial decisions. The court-appointed guardian or organization could be a person or agency you have never heard of and would not know your family or anything about you.

Yes, that is scary. However, guardianship takes place when families do not plan in advance to appoint a surrogate decision maker, also known as an “agent.”

Here’s even more scary news: once the court has appointed a guardian, that relationship may continue for the rest of the incapacitated person’s life. That means annual accountings and involvement with the court, legal fees and other professional fees the guardian or court deems necessary.

There are some guardians who have made headlines for stealing money and making care decisions that the individual and their families did not want.

Meeting with an estate planning attorney to prepare for incapacity as part of an overall estate plan is a far better way. Why don’t more people do it?

  • They aren’t aware of the importance of power of attorney.
  • They don’t want to spend the money.
  • They don’t know who to choose as their power of attorney
  • They don’t want to think about incapacity or death.

In contrast to a court-supervised lifetime guardianship, a properly drafted power of attorney can provide for an agent to make a variety of financial and medical decisions. The person named as a power of attorney (the agent) can serve for the person’s lifetime, just like a guardian.

This is the most fundamental estate planning document, after the last will and testament. Once it’s prepared, you can always change your mind and you or your agent never need to go to court. Hopefully this shed some light  on what the difference between a Guardianship and a Power of Attorney is.

Reference: Pittsburgh Post-Gazette (Feb. 24, 2020) “Guardianships vs. Powers of Attorney”

Read other articles pertaining to this subject at : THE DIFFERENCE BETWEEN POWERS  OF ATTORNEY AND GUARDIANSHIPS/AARP

                                                                                                          Power of attorney and guardianship: What’s the difference?/care.com

You can also read some of our previous Blogs at :

Will Florida’s New Legislation Help Seniors in Guardianships?

When Do I Need a Power of Attorney?

Young Family

Estate Planning Is For Everyone

Estate planning is something anyone who is 18 years old or older needs to think about, advises the article “Estate planning for every stage of life from the Independent Record. It includes much more than a person’s last will and testament. It protects you from incapacity, provides the legal right to allow others to talk to your doctors if you can’t and takes care of your minor children, if an unexpected tragedy occurs. Let’s look at all the ages and stages where estate planning is needed.

Parents of young adults should discuss estate planning with their children. While parents devote decades to helping their children become independent adults, sometimes life doesn’t go the way you expect. A college freshman is more concerned with acing a class, joining a club and the most recent trend on social media. However, a parent needs to think about what happens when the child is over 18 and has a medical emergency. Parents have no legal rights to medical information, medical decision making or finances, once a child becomes a legal adult. Hospitals may not release private information and doctors can’t talk with parents, even in an extreme situation. Young adults need to have a HIPAA release, a durable power of medical attorney and a power of attorney for their finances created.

New parents also need estate planning. While it may be hard to consider while adjusting to having a new baby in the house, what would happen to that baby if something unexpected were to affect both parents? The estate planning attorney will create a last will and testament, which is used to name a guardian for any minor children, in case both parents pass. This also includes decisions that need to be made about the child’s education, medical treatment and even their social life. You’ll need to name someone to be the child’s guardian, and to be sure that they will raise your child the same way that you would.

An estate plan includes naming a conservator, who is a person with control over a minor child’s finances. You’ll want to name a responsible person who is trustworthy and good with handling money. It is possible to name the same person as guardian and conservator. However, it may be wise to separate the responsibilities.

An estate plan also ensures that your children receive their inheritance, when you think they will be responsible enough to handle it. If a minor child’s parents die and there is no  plan, the parent’s assets will be held by the court for the benefit of the child. Once the child turns 18, he or she will receive the entire amount in one lump sum. Few who are 18-years old are able to manage large sums of money. Estate planning helps you control how the money is distributed. This is also something to consider, when your children are the beneficiaries of any life insurance policies. An estate planning attorney can help you set up trusts, so the monies are distributed at the right time.

When people enter their ‘golden’ years—that is, they are almost retired—it is the time for estate plans to be reviewed. You may wish to name your children as power of attorney and medical power of attorney, rather than a sibling. It’s best to have people who will be younger than you for these roles as you age. This may also be the time to change how your wealth is distributed. Are your children old enough to be responsible with an inheritance? Do you want to create a legacy plan that includes charitable giving?

Lastly, update your estate plan any time there are changes in the family structure. Divorce, death, marriage or individuals with special needs all require a different approach to the basic estate plan. It’s a good idea to revisit an estate plan anytime there have been major changes in your relationships, to the law, or changes to your financial status.

Reference: Independent Record (March 1, 2020) “Estate planning for every stage of life

Read more relevant articles at:   ESTATE PLANNING IS FOR EVERYONE/globalwealthadvisors

You’re never too Young to Estate Plan

Also Read our previous gs at :  Creating an Estate Plan Should Be a New Year’s Resolution

                                                          Am I Too Young to Think About Estate Planning?

 

 

 

COVID 19 AND SMALL BUSINESSES

C19 UPDATE: Small Businesses Hurt by COVID-19 May Qualify for SBA Disaster Relief Loans

C19 UPDATE: Small Businesses Hurt by COVID-19 May Qualify for SBA Disaster Relief Loans.  It’s estimated that some 30 million US small businesses may fall victim to the coronavirus through closures, cancellations and other revenue losses. With no clear end in sight, the Small Business Administration (SBA) is offering eligible businesses low-interest disaster relief loans to cover operating expenses.

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%. In order to keep payments affordable, they are offering long-term repayments, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.

For more information on areas currently eligible for SBA disaster relief and to apply for a loan, visit the SBA website at https://www.sba.gov/disaster-assistance/coronavirus-covid-19 or call the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail  disastercustomerservice@sba.gov.

Resources: SBA Disaster Assistance in Response to the Coronavirus.

Read Related Articles at :

SBA to Provide Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)

SBA Updates Criteria on States for Requesting Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)

Also read one of our previous Blogs at:

C19 UPDATE: Paying for Covid-19 Testing and Treatment if You Have a High Deductible Insurance Plan

C19 UPDATE: Emergency Estate Planning Decisions to Make Right Now

Ozzy and Sharon estate Plan

Ozzy Osbourne and Sharon Osbourne Have an Estate Plan

Ozzy Osbourne and Sharon Osbourne Have an Estate Plan.  Heavy metal rock star Ozzy Osbourne and his talk show host wife, Sharon Osbourne say that they have a plan to pass the lion’s share of their estate to their children.

Ozzy rose to fame during the 1970s as the lead vocalist of the heavy metal band Black Sabbath, and Sharon became a household name more recently, thanks to her role in the MTV reality show “The Osbournes” and her job as a daytime talk show host.

Sharon explained the couple’s plan on The Talk, while reacting to news that the late Kirk Douglas bequeathed most of his $80 million fortune to charity when he died in February 2020 at age 103, reports I Heart Radio’s recent article entitled “Ozzy, Sharon Osbourne’s Children Will Determine The Fate Of Their Fortune.”

“Everybody is different,” Sharon said. “And I just know that my husband’s body of work, that he’s written, and kept us all in the lifestyle that we love, goes to my children.”

The children will also be entrusted with determining what will happen to Ozzy’s image and likeness, Sharon also said.

“I don’t want someone that never met my husband owning his name and likeness and selling T-shirts everywhere and whatever. No, it stays in the Osbourne family.”

Ozzy’s latest solo album, Ordinary Man—which is his 12th overall—already ranks as his highest-charting solo debut ever in the United Kingdom.

Between Ozzy’s equity in Black Sabbath, the solo recordings that he and Sharon have worked so hard to control and the hours of television in which the two have starred, it’s not hard to see the fruits of the couple’s labor benefitting several future generations of Osbournes.

Estate planning is important in every field and for everyone. However, it’s particularly important in the entertainment business, where will contests and questions about inheritances frequently are publicized in the press. To that end, the estates of celebrated artists like Frank Zappa, Kurt Cobain, Prince, Tom Petty, Chris Cornell and many others have been the subject of public battles in recent years.

Even if you are not about to release your latest solo album, you still need to work with an experienced estate planning attorney to make certain that your plans for your assets and property are carried out after your death.  That probably is why Ozzy Osbourne and Sharon Osbourne Have an Estate Plan.

Reference: I Heart Radio (March 2, 2020) “Ozzy, Sharon Osbourne’s Children Will Determine The Fate Of Their Fortune”

Read more about this at:    OZZY OSBOURNE Will Leave His ‘Body Of Work’ To His Children, Says SHARON OSBOURNE

Also this might be interesting :   15 Kids Who Won’t Inherit A Dime From Their Celeb Parents (And 5 Who Are Already Millionaires)

Read about other Celebrities and their Estate planning from one of our previous Blogs: The Latest on Kirk Douglas’ Estate

How Can Celebrities’ Estate Planning Be Impacted by Alzheimer’s?

Medicare premiums

Can I Appeal More Expensive Medicare Premiums?

Can I Appeal More Expensive Medicare Premiums?  The standard monthly premium for Medicare Part B is $144.60 in 2020, but some beneficiaries pay as much as $491.60. If your income varies from what the Social Security used to calculate whether you’re subject to those surcharges, there is a way to request the agency to reconsider.

CNBC’s recent article entitled “Here’s how to appeal higher Medicare premiums” explains that the annual income of older Americans could decrease substantially from one year to the next for many reasons, such as retirement, the death of a spouse, or the sale of your business. However, it can take Medicare — which charges higher earners more for premiums — several years to adjust when your income drops below the threshold.

If you’re paying more than the standard premiums for Medicare Part B (outpatient services) and Part D (prescription drugs) through income-related monthly adjustment amounts, or IRMAAs, the difference can mean hundreds of dollars per month. The surcharge is also frequently derived from your tax return from two years before, which may not accurately reflect your current financial situation. When this happens, seniors must contact Social Security and prove that they’re not earning that amount any longer.

For individuals, IRMAAs are triggered if your modified adjusted gross income is greater than $87,000, and for married couples filing joint tax returns, IRMAAs begin above $174,000.

The process to show that your current income is lower, requires you to ask the agency to reconsider its assessment. You also have to complete a form and attach supporting documents. Everyone’s situation is different, but in many cases, suitable proof may include a more recent tax return, a letter from your former employer stating that you retired, more recent pay stubs or something similar showing that your income has dropped.

The form includes a list of “life-changing” events that qualify as reasons for reducing or eliminating the IRMAAs. These include marriage, the death of a spouse, divorce, the loss of pension, or that you stopped working or reduced your hours. If you satisfy one of the qualifying reasons, it usually gets adjusted. If it doesn’t, you can appeal the decision to an administrative law judge. However, that process can be time consuming and you must keep paying the surcharges in the meantime.

The SSA reevaluates your situation every year. This means the IRMAAs (or whether you pay them) could change annually, based upon the volatility of your income.

You should also be aware that the SSA’s decision could leave you financially vulnerable, if your long-term health unexpectedly changes or a one-time health event requires prescription drugs. You also could be hit with late-enrollment penalties, if you don’t qualify for an exception. The same is true for enrolling late in Part B. This should help explain if you can  Appeal More Expensive Medicare Premiums?

Reference: CNBC (February 25, 2020) “Here’s how to appeal higher Medicare premiums”

Read more about this at :         Medicare perscription drug coverage appeals/medicare.gov

                                                               Medicare part B Premium Appeals/HHS.gov

You can also read one of our previous Blogs at :  The High Cost of Medicare Mistakes

 

Princes brother

How Does the Death of Prince’s Brother Impact the Late Rock Star’s Estate?

How Does the Death of Prince’s Brother Impact the Late Rock Star’s Estate?  Alfred Jackson was one of six of Prince’s siblings who were heirs to their brother’s fortune worth at least $100 million. But they sold 90% of his estate rights last year to Primary Wave, a well-funded and growing entertainment company that invests in music publishing and recording rights. Prince’s sister Tyka Nelson also struck a deal with Primary Wave, and was given cash up front as the estate proceedings drag on.

The StarTribune’s recent article entitled “Death of Prince heir complicates estate settlement even more” reports that because of these moves, about a third of Prince’s assets could wind up being controlled by parties who were not related to him—which adds to the tough job of settling the late rock star’s estate.

Just a few hours after signing with Primary Wave in August of 2019, the sixty-six-year-old Jackson succumbed to heart disease, while at his home in Kansas City. However, unlike Prince, he had signed a will. Jackson did not have a wife or children. However, in another twist, rather than leaving his estate to his siblings, he bequeathed all his assets to a friend, Raffles Van Exel, who claims to be an entertainment consultant. However, he’s best known for hanging out with Whitney Houston in her final days, as well as Michael Jackson’s family. Exel was also a creative force behind O.J. Simpson’s notorious “If I Did It” book project.

Primary Wave’s deal with Jackson is being reviewed by his own family, at least his siblings who aren’t related to Prince. They aim to contest his will.

Prince’s accidental death by fentanyl in 2016 created one of the largest and most complicated probate court proceedings in Minnesota history. That’s because the rock star failed to draft a will. The value of his estate is somewhere between $100 million to $300 million estate and is comprised of potential music royalties.

Prince’s heirs are unable to get their money from his estate until it is settled. Because the probate proceedings are dragging on, Primary Wave offered Prince’s heirs the chance to raise cash by selling their estate rights. These heirs are all approaching 60Jackson wanted to enjoy life now, rather than wait for the process to be finalized. The siblings, by that time, may be too old, sick or dead to enjoy their inheritance.

Primary Wave tried to get at least three of Prince’s siblings — Sharon, Norrine, and John Nelson, to sell their estate rights. However, the three refused and said in a recent court filing that they are concerned that Primary Wave will use its deep pockets to their detriment. The company’s involvement would only lead to more delays and tensions, the siblings said in a letter directly to the probate judge. With the case draining their “limited resources,” the three explained that they are unable to pay legal counsel in this case and are representing themselves.

The terms of Primary Wave’s deals with Tyka Nelson and Alfred Jackson are private. However, the company has been asserting its rights in Prince’s probate case. A 2019 court filing said that the company says it “stands in the shoes” of the two heirs. That is How  the Death of Prince’s Brother Impacts the Late Rock Star’s Estate.

Reference: StarTribune (February 22, 2020) “Death of Prince heir complicates estate settlement even more”

Read more related articles at: 

Death of Prince heir complicates estate settlement even more

Prince’s Posthumous Year In Business Was Full Of Weirdos And Chaos

Read about other Celebrity Estate stories on one of our previous Blogs at:

Luke Perry’s Estate Planning – How Well Did He Do?

Why is Angelina Jolie Leaving Her Total Estate to Just One of Her Kids?

 

What are the Penalty-Free IRA Withdrawals?

What are the Penalty-Free IRA Withdrawals?

What are the Penalty-Free IRA Withdrawals? Traditional and Roth IRA distributions can bring about a 10% penalty, if you take them too soon. However, there are several early-withdrawal exceptions that will let you avoid the fine.

Investopedia’s recent article entitled “9 Penalty-Free IRA Withdrawals” examines some IRA withdrawals that can be made during retirement.

The IRS will hit you with a 10% penalty on an early IRA withdrawal to motivate you to keep your retirement savings intact. However, you may be able to get around the penalty in some situations. Here are nine circumstances where you can take an early withdrawal from a traditional or Roth IRA without being penalized.

  1. Unreimbursed Medical Expenses. If you don’t have health insurance, or you have out-of-pocket medical expenses that aren’t covered by insurance, you may be able to take penalty-free distributions from your IRA to pay for these expenses. To be eligible, you must pay the medical expenses during the same calendar year you make the withdrawal. Further, your unreimbursed medical expenses must the more than 10% of your adjusted gross income (AGI).
  2. Health Insurance Premiums During Unemployment. If you’re unemployed, you may take penalty-free distributions from your IRA to pay for health insurance premiums. For the distributions to be eligible for the penalty-free treatment, you must satisfy these conditions:
  • You lost your job
  • You received unemployment compensation for 12 consecutive weeks
  • You took the distributions during either the year you received the unemployment compensation or the next year; and
  • You received the distributions no later than 60 days after returning to work.
  1. Permanent Disability. If you become permanently disabled and can no longer work, you can withdraw money from your IRA without the 10% penalty. You can use the distribution for any reason. Just remember that your plan administrator may need you to provide evidence of the disability, prior to approving a penalty-free withdrawal.
  2. Higher-Education Expenses. You may be able to avoid the 10% penalty, when you use IRA funds to pay for qualified education expenses for you, your spouse, or your child. These qualified education expenses include tuition, fees, books, supplies and equipment required for enrollment. Room and board are also approved for students enrolled at least half-time.
  3. An Inherited IRA. If you’re the beneficiary of an IRA, your withdrawals aren’t subject to the 10% early withdrawal penalty. However, this exception doesn’t apply if you’re the spouse of the original account holder, you are the sole beneficiary and you elect a spousal transfer (rolling over the funds into your own non-inherited IRA). In this instance, the IRA is handled as if it were yours, to start, which means the 10% early withdrawal penalties still are applicable.
  4. To Buy, Build, or Rebuild a Home. You can withdraw up to $10,000 (which is a lifetime limit) from your IRA without penalty to buy, build, or rebuild a home. To be eligible, you must be a “first-time” homebuyer, (which means that you haven’t owned a home in the previous two years). However, you could have been a homeowner in the past and still qualify as a first-time homebuyer today. If you’re married, your spouse can add an additional $10,000 from his or her IRA. You can also use the money to assist your child, grandchild, parent, or other family members, as long as they meet the first-time homebuyer definition.
  5. Substantially Equal Periodic Payments. If you need to make regular withdrawals from your IRA for several years, the IRS lets you to do so penalty-free, if you meet certain requirements. Therefore, you withdraw the same amount—determined under one of three IRS-pre-approved methods—each year for five years or until you turn 59½, whichever one comes later. This is referred to as taking substantially equal periodic payments (SEPPs) from your IRA.
  6. An IRS Levy. If you have unpaid federal taxes, the IRS can use money in your IRA to pay the bill. The 10% penalty won’t apply, if the IRS levies the money directly.
  7. Active Duty. Qualified reservist distributions aren’t subject to the 10% penalty. In some instances, you may be able to repay the distributions, even if the repayment contributions exceed annual contribution limits. However, you are required to do so within two years of the end of active duty.

While if the circumstances discussed here are exempt from the early-distribution penalty, they still may be subject to federal and state tax. To claim the early-distribution penalty exception, you may be required to file IRS Form 5329 along with your income tax return, unless your IRA custodian reports the amount as being exempt on IRS Form 1099-R.  That explains What the Penalty-Free IRA Withdrawals are.

Reference: Investopedia (Jan. 20, 2020) “9 Penalty-Free IRA Withdrawals”

Read more about this at:      11 Ways to Avoid the IRA Early Withdrawal Penalty/USNews

 Traditional IRA Withdrawal Rules /charles Schwab

And read one of our previous blogs at:    Making an IRA Part of the Estate Plan

Walt Disney and his Grandchild

What are Walt Disney’s Heirs Worth?

What are Walt Disney’s Heirs Worth?  It’s not known just how much the Disney family is worth. GOBankingRates estimated the company’s net worth to be roughly $130 billion. Roy O.’s grandson, Roy P., said at one point that the family owns less than 3% of the company. Even so, that would put their fortune around $3.9 billion (not counting any investments in addition to Disney holdings).

Wealth Advisor’s recent article entitled “Disney Family Feud As Heirs Battle For $400 Million Trust Fund” says that in 1925, Walt married Lillian Bounds, a studio inker. Eight years later, she gave birth to Diane, and the couple later adopted their daughter Sharon as a baby.

Walt Disney is said to have adored his 10 grandchildren. When he died in 1966 of lung cancer, he left numerous trusts and family foundations for his family and heirs.

Walt’s younger daughter, Sharon, adopted one child, Victoria, with her first husband, Robert Brown. She then had twins, Brad and Michelle, with her second husband, Bill Lund. She died from breast cancer in 1993 at age 56. Michelle has never had a job and owns three homes, spending a lot of time in Newport Beach, CA according to Gardner.

Victoria reportedly lived an extravagant lifestyle that included $5,000-a-night suites at the Royal Palms in Las Vegas. One report notes that she once went on a Disney cruise ship and destroyed her suite to such a degree that Michael Eisner, then-CEO of the company, had to ask the trustees to pay for the damages. Her share of the family fortune was added to Brad’s and Michelle’s after she died in 2002 from health complications. However, Sharon’s twins later became embattled in a years-long feud over their $400 million trust fund. That inheritance was supposed to be distributed in annual payments and lump sums at five-year intervals at ages 35, 40, and 45. However, the trustees dispersed the payments to Michelle and withheld Brad’s.

Michelle and the trustees argued that Brad wasn’t able to take care of his share because of a “chronic cognitive disability” and that Bill, their father, was taking advantage of this to gain money, according to NBC News.

Bill said that the trustees were manipulating his daughter Michelle. Bill was previously a trustee but resigned after an allegation that he used trust money to gain more than $3 million in kickbacks from a real-estate deal. He reportedly agreed to an annual settlement of $500,000.  So we truly do not know what the Walt Disney’s Heirs Worth.

Reference: Wealth Advisor (Feb. 11, 2020) “Disney Family Feud As Heirs Battle For $400 Million Trust Fund”

Read some related articles at:                  The Disney’s, not the happiest family on Earth. /nbcnews.com

Disney Family Networth: Meet the family behind the media empire/businessinsider.com

Also Read one of our previous Blogs:                Are You Considering the Impact of Your Estate Plan on your Heirs?

 

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