Wills, Trusts & Estates Prof Blog

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

Wednesday, May 4, 2016

Using Social Security In A Post File-And-Suspend Era

File and suspendThe file-and-suspend technique for Social Security has recently been done away with and that is causing people to scramble to find a new strategy.  Under the previous rules married couples could take advantage of this technique.  “Upon reaching full retirement age, typically 66, the beneficiary could file to claim Social Security, but then immediately suspend it, or ask to stop receiving the regular monthly income. Having filed, he made his spouse eligible for a "spousal benefit" that was half of the beneficiary's benefit.”  This article offers advice for couples who are navigating in a post file-and-suspend era.  There are different Social Security options that senior citizen couples have available to them.  Careful and prudent Social Security planning can help people increase their income and live a more comfortable life.

See Jeff Brown, How to Use Social Security After the File-and-Suspend Rule Ends, U.S. News & World Report, May 4, 2016.

May 4, 2016 in Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Ways To Combat Elder Financial Abuse

Check writingElder financial abuse is becoming an epidemic, and the problem is only going to get worse as the elderly population continues to grow.  This article discusses some ways to combat the scourge of con artists taking advantage of senior citizens.  It is important to protect personal information like Social Security or Medicare numbers, and seniors should not give this information out over the phone unless they initiated the phone call.  It is also important to read the fine print of anything ordered online, and to be wary of pushy marketers.  People should also use the caller ID feature on their phone and avoid answering phone calls from unknown numbers.  These are just some of the pieces of advice that this article offers to help senior citizens avoid elder financial abuse. 

See John Wasik, How To Beat The Elder Financial Abuse Epidemic, Forbes, May 4, 2016.

May 4, 2016 in Elder Law, Estate Planning - Generally, Web/Tech | Permalink | Comments (0)

Monday, May 2, 2016

Scenarios To Consider Before Making Social Security Decisions

Knowing social securityThis article provides important information that people need to know about Social Security.  People need to be aware of the fact that the full retirement age is changing, and this article offers a chart that shows the ages which the changes will effect.  The age that a person claims matters for how much benefits they will receive from Social Security, and the maximum age a person should start claiming is 70 or older.  The benefits that a person receives are based on 35 years of working.  It is also important for people to be aware of widow and survivor benefits.  Married couples should coordinate their Social Security planning with each other.  Being informed about Social Security techniques and when to claim can save people a lot of money.

See Casey Fleser, What You Don’t Know About Social Security Could Cost You, The Motley Fool, May 2, 2016.  

May 2, 2016 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Sunday, May 1, 2016

There Are Growing Concerns About The Sustainability Of Social Security

File and suspendThere are more than 40 million Americans who receive monthly benefits payments from Social Security.  This article discusses a growing concern that Social Security may be facing some financial difficulties in the future, and this would be devastating for the many Americans who depend on the program.  “Based on the latest estimates from the Board of Trustees, Social Security's Old-Age, Survivors and Disability Trust (OASDI) is slated to burn through its excess cash reserves by 2034.” This column tries to explain some of the reasons why Social Security is burning through its cash reserves.  Lawmakers will need to be proactive about tackling the issues that this article discusses before major problems arise.  People who are planning for their retirement will also need to factor the possibility of major Social Security policy changes into their estate planning. 

See Sean Williams, This Scary Social Security Trend Can’t Be Ignored Any Longer, Fox Business, May 1, 2016.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

May 1, 2016 in Elder Law, Estate Planning - Generally | Permalink | Comments (0)

Friday, April 29, 2016

Are All The Good Social Security Strategies Gone?

Social security mythsCongress has recently made many changes to Social Security.  This article wonders if there are any good Social Security strategies left that people can still use.  The file and suspend technique was done away with at the end of this month of April.  Another loophole being done away with is the “deemed filing” loophole which “allowed married couples to claim just a spousal benefit at their full retirement age, while allowing their own benefit to grow and accumulate delayed retirement credits until age 70.”  This article discusses some alternative Social Security strategies that married couples might be able to use.  “One strategy that could work well for married couples is to have the lower earner apply for benefits on time, while the higher-earning spouse waits and lets their own retirement benefit grow.”  There are also more policy changes that will likely be made in the future as congress attempts to fix Social Security funding issues. 

See Matthew Frankel, Did Congress Kill All the Good Social Security Strategies?, My San Antonio, April 29, 2016.

April 29, 2016 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

What Should People Do If They Missed The File And Suspend Deadline?

Social securityThe file and suspend strategy that spouses use with Social Security was done away with in the Bipartisan Budget Act of 2015.  Today is the last day that file and suspend will be available as an option.  “This option allows filers to apply for their benefits and then immediately suspend them and allow them to grow into a larger benefit in the future and collect spousal or other family benefits in the meantime.”  Those who have been caught unprepared and failed to use the file and suspend strategy by today’s April 29 deadline may still be able to use a Form 795 to buy an extra six months to get the actual filing done.  In order to qualify the person should be at least 66 years old and must file the Protective Filing Statement using Form 795 by today. 

See Mark P. Cussen, Late to File and Suspend? File Form 795 for an Extension, Investopedia, April 28, 2016.

April 29, 2016 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Living With Friends In Retirement

Senior housingThis article examines the growing trend of senior citizens living with friends in their old age.  There are two events coming up that this article mentions.  “April 30 is National Cohousing Open House Day, when more than 90 cohousing communities around the country will welcome visitors for tours and Q&A sessions. Then on May 20 and 21, a national cohousing conference, Aging Better Together, will take place in Salt Lake City.”  Cohousing is becoming a more attractive and affordable option for senior citizens who are looking to cut down on expenses.  This is a new developing industry that will likely expand in the upcoming decades.  This article attempts to provide accurate information to dispel many of the popular misconceptions that people have about cohousing. 

See Denise Logeland, The Pros And Cons Of Living With Friends In Older Age, Forbes, April 29, 2016.

April 29, 2016 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Thursday, April 28, 2016

Judge Rules That Sumner Redstone’s Competency Trial Will Remain Open To Public

Sumner redstoneA California judge ruled on Wednesday that the trial over Sumner Redstone’s advance healthcare directive will remain open to the public.  The lawsuit brought by Mr. Redstone’s ex-girlfriend, Manuela Herzer, centers around the 92-year-old billionaire’s mental competency.  Herzer claims that Mr. Redstone lacked the mental capacity to remove her from his advance healthcare directive, and she is asking to be reinstated as the person in charge of the media mogul’s healthcare.  This case is set to be tried on May 6.  Los Angeles Superior Court Judge David Cowan did leave open the possibility that some testimony could still be shielded from the public.  Mr. Redstone’s medical records will have to be carefully examined and the information entered into evidence will be limited. 

See Lisa Richwine, Judge rejects Redstone bid to close part of competency trial, Mediacorp News Group, April 28, 2016.

April 28, 2016 in Current Affairs, Elder Law, Estate Planning - Generally, Film, Trusts | Permalink | Comments (0)

Tuesday, April 26, 2016

Tax Consequences Dealing With The Early Termination Of A Generation-Skipping Taxable Marital Trust

Irs2An IRS ruling recently held that a surviving spouse was the beneficiary of two marital trusts that were established under the late spouses revocable trust agreement.  One of these trusts was exempt from the generation-skipping transfer tax (GST) while the other was not.  “The provisions of each marital trust provided for the surviving spouse to receive all income during life and granted to the surviving spouse a testamentary general power of appointment (POA) over the assets in the GST taxable trust.”  This article discusses Revenue Procedure 2001-38 which sets forth a rule “that a qualified terminable interest property (QTIP) election is treated as null and void when the election isn’t necessary to reduce the estate tax liability to zero.”  They held that a release of a general Power of Attorney (POA) created a taxable gift under IRC Section 2514(b). 

See Andrew M. Nerney and Andrew B. Seiken, IRS Rules on Tax Consequences Associated With Early Termination of a Generation-Skipping Taxable Marital Trust, Wealth Management, April 25, 2016.

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

April 26, 2016 in Elder Law, Estate Planning - Generally, Generation-Skipping Transfer Tax, Gift Tax, Income Tax, Trusts | Permalink | Comments (0)

How Surviving Spouses Should Deal With Inherited IRAs

Surviving spouseSurviving spouses are the only beneficiaries who can roll over a deceased spouses IRA into their own IRA, but this might not always be the best option.  Whether rolling over an IRA is a good idea will depend on the circumstances.  It is important to remember “that if you roll it into your own IRA, it is treated as if it were always yours. If you are under age 59½ and roll the money into your IRA, you will have the 10% early distribution penalty to contend with should you want any cash.”  There are circumstances when it might be better to just leave the money in the inherited IRA.  It is a good idea to speak with an experienced estate planning professional about whether rolling over an IRA is a good decision.

See Dan Moisand, Spouses have special powers when inheriting IRAs, Market Watch, April 22, 2016.

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

April 26, 2016 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)