Wills, Trusts & Estates Prof Blog

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

Thursday, November 26, 2015

Will More Americans Be Able To Work Into Their 70s?

Senior workingThere are an increasing number of Americans that are delaying their retirement and continuing to work into their 70s. This article discusses many of the concerns senior citizens have about the impact that work will have on their health. A growing number of baby boomers are expressing concerns about the wear and tear that working into their 70s will have on their bodies. This article presents statistical data and resources that show how education and other socioeconomic factors can impact the percentage of seniors with disabilities. As the average life expectancy continues to increase and more people enter into their retirement years society is going to have to make policy adjustments to adapt to the changes.

See Chris Farrell, Will You Really Be Able to Work Into Your 70s?, Next Avenue, November 25, 2015.

November 26, 2015 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

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)

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)

Court Rules Against California Woman Over Use Of Frozen Embryos

GeneticsA California court has ordered the destruction of embryos created for a woman with her then husbands sperm when she was facing loss of fertility due to chemo therapy. However, the embryos became the center of controversy when the woman divorced and her ex-husband requested the embryos be destroyed under the agreement the couple signed concerning their use after a seperation. The court stated that the consent form was valid and, as a result, there was nothing that could be done to allow the use of the embryos even though they were the women's last chance to procreate. In recent years, several cases along these lines have been decided with most of them reaching a similar conclusion. In the event a client is considering the preservation of fertilized eggs, make sure they understand the consequences divorce may have on the use of the embryos and check to see if they want a clause to allow for post separation use.

See Azeen Ghorayshi, A Judge Just Ruled That This Woman’s Frozen Embryos Must Be “Thawed And Discarded”, Buzzfeed, November 21, 2015.


November 23, 2015 in Current Affairs, Current Events, Non-Probate Assets, Science | Permalink | Comments (0)

Sunday, November 22, 2015

Considerations To Keep In Mind While Deciding To Defer Social Security

Social SecurityRetirees are faced with the choice to start taking distributions from Social Security or delay and take advantage of the yearly growth in benefits that deferment creates. However, there are many considerations that need to be taken into account when making the decision including the following:

  • The state of a retirees health is of primary importance. Poor health makes taking the earlier distribution a better option since it provides extra income to pay medical bills and ensures that some benefits are gained before death.
  • Since the increase to Social Security is %8 per year, it makes sense to take the earlier distribution if the retiree is able to beat that number through investment. However, this is a strategy that should be taken carefully as Social Security is offering a guarantee while the market can easily take away any gain made with the early distribution.
  • If the retiree intends to be active in early retirement it will make sense to take the early distribution to over cost of the busy lifestyle and essentially enjoy the money while they can.

See Donna Fuscaldo, 4 Reasons You May Not Want To Delay Social Security Payments, Investopedia, November 17, 2015.

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

November 22, 2015 in Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0)

Thursday, November 19, 2015

What Happens To Debts When A Person Dies?

Dying debtsOne estate planning issue that many people might want to think about is how any debts they have will impact their estate after they pass away. When a person dies their debts are generally paid out of their estate. If the estate does not have any money then the debt typically dies with the person. An exception to what this article refers to as a dying debt that dies with a person is an undead debt that can exist if a person was a co-signer or guarantor of a loan. During life it is practically impossible to get out of any student loan debt but when a person dies the debt tends to die with them. This article discusses certain steps that people can take to protect their estate from debts.

See Patrick Chism, What Happens to Your Debt When You Die?, Zing!, November 19, 2015.

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

November 19, 2015 in Estate Planning - Generally, Intestate Succession, Non-Probate Assets, Trusts, Wills | Permalink | Comments (0)

Wednesday, November 18, 2015

How Communication Can Build Trust

Building trustThis journal column discusses an article written by Robert F. Hurley that was published in the September 2006 issue of Harvard Business Review titled “The Decision to Trust.” There are a number of different factors that relate to whether people will trust one another. These factors are the result of a complex mix of personality, culture, and experience. The individual person or situation is another factor that can influence trust. A current research survey of 1,000 clients of financial advisers led by Julie Littlechild shows that there is a very high level of trust. There are a number of things that advisers can do and communication techniques they can use to move the needle on trust. There are a wide range of positive outcomes that are associated with a high level of trust.

See Marie Swift and Julie Littlechild, Building Trust Through Communication, Journal of Financial Planning, November 17, 2015.

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

November 18, 2015 in Estate Planning - Generally, Non-Probate Assets, Professional Responsibility | Permalink | Comments (0)

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)

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)