Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, November 24, 2015

Avoiding Unpleasant Surprises With The Inherited Roth Rollover

Adult childrenIn recent years it has become more common for people to inherit the balance of a retirement account. Clients are increasingly looking for information on what they can do with these inherited funds to maximize their future tax savings potential. The rules governing the rolling over of inherited retirement funds into an inherited Roth IRA can be complicated. This tax-savings technique can often be used if the designated beneficiary is the original account holder's spouse. This column discusses some of the pros and cons of converting to an inherited Roth. Understanding these complex rules is important for avoiding unpleasant surprises, so people should consult with an estate planning professional for more information.

See Robert Bloink and William H. Byrnes, The inherited Roth rollover: How to avoid unpleasant surprises, Life Health Pro, November 23, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 24, 2015 in Elder Law, Estate Planning - Generally, Income Tax, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Court Orders Adult Son To Pay For Mother's Care-giving Expenses Despite Claims Of Childhood Abuse

Business_expenseA Pennsylvania Appeals Court has held that under the State's filial responsibility law an adult son is obligated to pay for his mother's health care expenses even though he claimed that he had an abusive childhood. There are a handful of States that have filial responsibility laws that obligate adult children to care for indigent parents. The Pennsylvania Court held in Eori v. Eori that there was no evidence Joshua Ryan was abandoned by his mother for a 10-year period. The full text of the Pennsylvania Appeals Court decision can be read here.

See Son Must Pay for Mother's Care Under Filial Responsibility Law Despite Abusive Childhood, Elder Law Answers, November 24, 2015.

November 24, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Guardianship | Permalink | Comments (0)

Monday, November 23, 2015

Spousal Impoverishment Figures Are Set To Stay The Same For 2016

MedicareIn 2016 spousal impoverishment and home equity limit figures are not going to be changed from their 2015 levels according to the Centers for Medicare and Medicaid Services (CMS). The reason for not changing these figures is because the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) has not increased. The CMS decision means that the community spouse resource allowance, maximum monthly maintenance needs allowance, the income cap, and Medicaid's home equity limits will all remain unchanged. This article provides links to more information about the 2016 policies.  People are going to need to update their budgets and estate plans to factor in the financial impact of the CMS announcement.

See CMS Confirms That Spousal Impoverishment Figures Will Remain the Same for 2016, Elder Law Answers, November 21, 2015.

November 23, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Income Tax, Non-Probate Assets | Permalink | Comments (0)

Wednesday, November 18, 2015

Reducing Tax Liability On Initial IRA Distributions

Tax billWhen a person turns 70 ½ they are required to take out required minimum distributions (RMDs) from their retirement accounts. One thing to be concerned about are the tax implications for the additional income coming from the distributions. It is a good idea to think ahead about the timing of taking out RMDs. Under current tax laws a person gets extra time to take their first RMD. Spreading out the first two RMDs into different years could keep a person out of a higher tax bracket. The rules about RMDs can be complex so it is a good idea to consult with a professional estate planner for further guidance.

See Karen Damato, How to Ease the Tax Bill on Initial IRA Distributions, The Wall Street Journal, October 18, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 18, 2015 in Elder Law, Estate Planning - Generally, Income Tax, Non-Probate Assets | Permalink | Comments (0)

Independence In Old Age Is Achievable But It Needs Proper Planning

Piggy BankOne of the most sought after objectives for retirement is the ability to maintain independence from family and friends in old age. However, this independence is not cheap as late in life care requires huge expenditures ranging from special equipment for the home to the need to have part or full time caregivers that can assist with chores and other necessary daily activities. As a result, clients need to be given the facts of old age care, especially in regards to cost, so that expectations are tempered and match the reality of the situation. Many people manage to set aside $1-2 million for retirement but, spread over several decades, that amount is not as significant as it might seem especially since expenditures will increase in the last years of life. While this goal is not impossible, planning must start early and involve the client's family as they are a source of assistance that could drastically cut cost and help attain a high, if not perfect, level of independence in the twilight years.

See Mary Merrell Bailey, Help Clients Achieve Lifestyle Independence, Wealth Management, November 17, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 18, 2015 in Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Tuesday, November 17, 2015

Avoiding Potential Disputes Among Heirs

Adult childrenIn recent years there has been a growing number of conflicts among heirs over inheritances. There are all sorts of reasons why heirs would fight over an estate. This article provides advice on some of the ways potential disputes between heirs can either be avoided or reduced. One of the most important things that this article stresses is communication. Oftentimes families will fight over an estate because of a failure to communicate. This article discusses many other steps and techniques that can be used to reduce the likelihood of their being a costly probate battle that could split a family apart. There could be certain circumstances when a person might intend to distribute assets unequally and they will need to explain the reasons to their loved ones. It is also a good idea to make a plan for distributing personal possessions that have a sentimental value attached to them.

See Eleanor Laise, Head Off Squabbles Among Your Heirs, Kiplinger, November 17, 2015.

Special thanks to Jim Hillhouse for bringing this article to my attention.

November 17, 2015 in Elder Law, Estate Planning - Generally, Intestate Succession, Trusts, Wills | Permalink | Comments (0)

Monday, November 16, 2015

What To Do When An Employee Refuses To Retire

KeyboardMost workers dream of the day when they can leave their job and live the twilight years of life in idle bliss free from the oppressive tyranny of the time clock. For some, however, their job is the engine that keeps the wheels moving forward which can create a problem when they refuse to leave a job even when production has slipped and the rest of the office is looking to move up the seniority ladder. For management, this can be a thorny issue since forcing out the worker, or even suggesting the worker retire, in favor of a younger employee may lead to age discrimination issues. But all is not lost, older workers, even when their work slips in quality somewhat, are an excellent source for institutional knowledge that might not be available from other sources as well as being ready made mentors for younger workers that might one day move into the same position. In the end, businesses should view workers beyond retirement age as an asset that has much to offer to the community and not attempt to force them out unless good cause exist.

See Karla L. Miller, @Work Advice: Putting the old, gray co-worker out to pasture, Washington Post, November 12, 2015.

Special thanks to Lewis Saret for bringing this article to my attention.

November 16, 2015 in Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Sunday, November 15, 2015

Concerns About California's New Assisted Suicide Law

California capitalThe State of California has recently passed the End of Life Option Act, which is set to go into effect in 2016. The new law will legalize physician assisted suicide for people with terminal illnesses. Not everyone is supportive of the new legislation and there have been some that have voiced concerns. This column expresses some of the concerns that critics have over the new law. There are concerns that this new assisted suicide legislation could lead to more elder abuse. Concerns about the level of oversight are also expressed in this column. People that witness a physician assisted suicide could also experience trauma. As this debate over physician assisted suicide continues people on both sides are going present their arguments for and against the new proposals.

See Margaret Dore, California's New Assisted Suicide Law: Whose Choice Will It Be?, Jurist, October 24, 2015.

November 15, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Guardianship, Wills | Permalink | Comments (0)

Friday, November 13, 2015

Using A QLAC To Reduce Longevity Risk

ElderlyAt the end of the year senior citizens that are 70 ½ or older are going to have to start taking required minimum distributions (RMDs) out of their IRAs. One relatively new method that people are using to hold down their RMDs involves a qualified longevity annuity contract (QLAC). This new method approved by the U.S. Treasury in 2014 lets people exclude the portion of their IRA used to buy the QLAC from the funds used to calculate RMDs in future years. One big issue that senior citizens need to contend with involves managing their longevity risk. If an annuity holder is concerned about passing away before the start date of the QLAC contract they could purchase it with a “return-of-premium (ROP) rider to guarantee that the annuity holder or his/her beneficiary will get at least as much from the contract as was invested in the contract.” Those that are interested in learning more about QLACs or any other retirement planning option should speak with a professional estate planner.

See Dr. Don Taylor, Lowing longevity risk with a QLAC, Bankrate, November 12, 2015.

November 13, 2015 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Pennsylvania Court Restores Pension For Jerry Sandusky

SanduskyA Pennsylvania Court has held that the State must restore a pension to former Penn State assistant football coach Jerry Sandusky that had been taken away from him when he was convicted and sentenced to prison for child molestation. “A Commonwealth Court panel ruled unanimously that the State Employees’ Retirement Board wrongly concluded Sandusky was a Penn State employee when he committed the crimes that were the basis for the pension forfeiture.” In 1999 Jerry Sandusky received a lump sum retirement payment of $148,000 and was to receive an additional payment of $4,900 each month. The Retirement Board stopped making those monthly payments in October 2012 when Sandusky was sentenced to 30 to 60 years in prison for sexually abusing 10 children.

See Jerry Sandusky has pension restored after ruling from Pennsylvania court, USA Today, November 13, 2015.

November 13, 2015 in Current Affairs, Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)