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May 8 19

How Much Will You Receive From Social Security?

by Phil Levin, Esq.
socialsecuritycards

It can be difficult to predict how much you will receive from Social Security, especially if you are more than a few years away from retirement. But familiarizing yourself with how your benefit will be calculated can help you budget for retirement and even boost your future Social Security payments.

Here’s how to estimate how much you will get from Social Security in retirement.

Consider the averages. The average Social Security benefit was $1,413.37 per month in June 2018. The maximum possible Social Security benefit for someone who retires at full retirement age is $2,788 in 2018. However, a worker would need to earn the maximum taxable amount, currently $128,400 for 2018, over a 35-year career to get this Social Security payment.

Familiarize yourself with the calculation. Social Security payments are calculated using the 35 highest earning years of your career, and are adjusted for inflation. If you work for more than 35 years, your lowest earning years are dropped from the calculation, which results in a higher payment. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments.

Factor in your retirement age. Your age when you start Social Security plays a big role in your payment amount. Your monthly Social Security benefit is reduced if you claim payments before your full retirement age, which is typically age 66 or 67, depending on your birth year. You can boost your monthly payments for each month you delay claiming between your full retirement age and age 70.

Subtract Medicare premiums. Many retirees have their Medicare Part B premiums deducted from their Social Security checks. The standard Medicare Part B premium is $134 per month in 2018, although some retirees pay a different amount. Medicare Part B payments are prohibited by law from decreasing Social Security payments for existing beneficiaries, so a Medicare Part B premium hike can’t be more than your annual Social Security cost-of-living adjustment.

Factor in income tax withholding. Many retirees have to pay income tax on their Social Security payments, especially if they have other sources of retirement income.

Create a My Social Security account. You can get a personalized estimate of your future Social Security benefits at various claiming ages by creating a my Social Security account. These estimates are based on your actual earning history and tend to be most accurate for those approaching retirement age. Your estimates might change from year to year, especially if you have a significant salary change or gaps in your earnings history.

 At The Levin Law Firm, we do not just draft documents; we ensure that you make informed and empowered decisions for yourself and the people you love.It can be difficult to predict how much you will receive from Social Security, especially if you are more than a few years away from retirement. But familiarizing yourself with how your benefit will be calculated can help you budget for retirement and even boost your future Social Security payments.

Here’s how to estimate how much you will get from Social Security in retirement.

Consider the averages. The average Social Security benefit was $1,413.37 per month in June 2018. The maximum possible Social Security benefit for someone who retires at full retirement age is $2,788 in 2018. However, a worker would need to earn the maximum taxable amount, currently $128,400 for 2018, over a 35-year career to get this Social Security payment.

Familiarize yourself with the calculation. Social Security payments are calculated using the 35 highest earning years of your career, and are adjusted for inflation. If you work for more than 35 years, your lowest earning years are dropped from the calculation, which results in a higher payment. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments.

Factor in your retirement age. Your age when you start Social Security plays a big role in your payment amount. Your monthly Social Security benefit is reduced if you claim payments before your full retirement age, which is typically age 66 or 67, depending on your birth year. You can boost your monthly payments for each month you delay claiming between your full retirement age and age 70.

Subtract Medicare premiums. Many retirees have their Medicare Part B premiums deducted from their Social Security checks. The standard Medicare Part B premium is $134 per month in 2018, although some retirees pay a different amount. Medicare Part B payments are prohibited by law from decreasing Social Security payments for existing beneficiaries, so a Medicare Part B premium hike can’t be more than your annual Social Security cost-of-living adjustment.

Factor in income tax withholding. Many retirees have to pay income tax on their Social Security payments, especially if they have other sources of retirement income.

Create a My Social Security account. You can get a personalized estimate of your future Social Security benefits at various claiming ages by creating a my Social Security account. These estimates are based on your actual earning history and tend to be most accurate for those approaching retirement age. Your estimates might change from year to year, especially if you have a significant salary change or gaps in your earnings history.

 At The Levin Law Firm, we do not just draft documents; we ensure that you make informed and empowered decisions for yourself and the people you love.It can be difficult to predict how much you will receive from Social Security, especially if you are more than a few years away from retirement. But familiarizing yourself with how your benefit will be calculated can help you budget for retirement and even boost your future Social Security payments.

Here’s how to estimate how much you will get from Social Security in retirement.

Consider the averages. The average Social Security benefit was $1,413.37 per month in June 2018. The maximum possible Social Security benefit for someone who retires at full retirement age is $2,788 in 2018. However, a worker would need to earn the maximum taxable amount, currently $128,400 for 2018, over a 35-year career to get this Social Security payment.

Familiarize yourself with the calculation. Social Security payments are calculated using the 35 highest earning years of your career, and are adjusted for inflation. If you work for more than 35 years, your lowest earning years are dropped from the calculation, which results in a higher payment. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments.

Factor in your retirement age. Your age when you start Social Security plays a big role in your payment amount. Your monthly Social Security benefit is reduced if you claim payments before your full retirement age, which is typically age 66 or 67, depending on your birth year. You can boost your monthly payments for each month you delay claiming between your full retirement age and age 70.

Subtract Medicare premiums. Many retirees have their Medicare Part B premiums deducted from their Social Security checks. The standard Medicare Part B premium is $134 per month in 2018, although some retirees pay a different amount. Medicare Part B payments are prohibited by law from decreasing Social Security payments for existing beneficiaries, so a Medicare Part B premium hike can’t be more than your annual Social Security cost-of-living adjustment.

Factor in income tax withholding. Many retirees have to pay income tax on their Social Security payments, especially if they have other sources of retirement income.

Create a My Social Security account. You can get a personalized estimate of your future Social Security benefits at various claiming ages by creating a my Social Security account. These estimates are based on your actual earning history and tend to be most accurate for those approaching retirement age. Your estimates might change from year to year, especially if you have a significant salary change or gaps in your earnings history.

 At The Levin Law Firm, we do not just draft documents; we ensure that you make informed and empowered decisions for yourself and the people you love.

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Apr 5 19

Trusts For Privacy

by Phil Levin, Esq.
unnamed (19)

There are many excellent reasons to utilize trusts for estate planning purposes:
Trusts can be designed to completely avoid the costs and delays resulting from probate, which is a public process to change title of assets from a deceased person to the new recipient.
Trusts can also be designed to reduce both inheritance and income taxes.
In the Elder Law arena, our clients often use irrevocable trusts in order to qualify for Medical Assistence.
Trusts are very valuable to manage assets if you suffer an illness, injury, or incapacity, which would completely avoid a “Guardianship” or “life probate.”
Trusts can be designed to be very flexible and continue after death for your beneficiaries to provide a multitude of benefits, including:
Asset Protection. Assets distributed in trust can provide loved ones with asset protection benefits, as long as distributions are in the trustee’s discretion for the health, education, maintenance, and support of your beneficiaries.
Asset Management. A trust can be useful to provide investment advisory services for beneficiaries who are unable or unwilling to manage inherited assets for themselves, such as minor or immature children, and for a spendthrift person.
Divorce Protection. By leaving specific assets in a trust, inherited property will not become comingled with your beneficiary and his or her spouse’s assets. As a result, trusts provide excellent protection in the event that your in-laws become the out-laws, resulting from one or more of your children going through a divorce.
Special Needs Protection. Assets for a beneficiary who has a mental and/or physical disability, and who is currently receiving, [or expected to require public benefits in the future], can be placed into a Special Needs Trust. As a result, property you desire to be earmarked for the benefit of a special needs person will not jeopardize having their public benefits reduced or completely terminated, which often occurs when a person with special needs receives an outright inheritence of property from a parent or another relative.
In addition to each of the above wonderful reasons why clients often establish both Lifetime and Testamentary Trusts, unlike a Will, or dying intestate, without an estate plan, [both of which would fully expose individually owned assets to the probate system], a trust completely avoids the costs, delays, and publicity of a formal probate proceeding with the local Orphans’ Court.
In fact, the privacy which a trust affords is one of the key reasons trusts are used by many people who guard their privacy zealously, including celebrities. For example, when comedian Garry Shandling died in 2016, he left a probate estate with a net value of less than $669,000. However, it is strongly suspected that Shandling left a trust which held the majority of his other assets. Here are links to stories about Shandling’s death and estate. Of course, we will never know how much Shandling left through trusts, because of the privacy that trusts provide, and since trusts are never exposed to the probate process.
If you do not want your friends, neighbors, and all of your family relations to know about the nature and extent of your assets in the event of your passing, along with exactly how much and who will receive your property, a trust may be just the right estate planning strategy to protect your personal privacy, and also make certain that your assets are distributed in the proper manner to your loved ones.

Mar 1 19

Why Beneficiary Designations are not a Substitute for Trusts

by Phil Levin, Esq.
Beneficiary Designations are not a substitute for trusts

TOD (Transfer on Death) designations, POD (Pay on Death) designations, and beneficiary designations for life insurance and annuity contracts are useful in the right circumstances. Each of these tools allows for an automatic transfer or distribution to the named beneficiary at the death of the owner. But these type of designations can have a few shortfalls. First, if the named beneficiary predeceases the owner, thjs type of designation will not be effective to transfer the asset. However, in most cases, the account owner can designate a contingent beneficiary, to ensure that the asset distributed in accordance with the client’s wishes.

But, if there is no contingent beneficiary, or if the contingent beneficiary also predecease the account owner, the asset may end up in the probate estate if the decedent passed away with a valid Last Will and Testament, which in many cases is what the owner was trying to avoid. And if the client died without a valid Will, then the asset would distribute to individuals under the intestate laws of the state where the client was domiciled at the time of their passing. In some cases, the account agreement with the financial institution might specify an alternate disposition, like to the spouse or next of kin rather than the probate estate of the owner, which is often the case when employer provided retirement plan accounts distribute in the absence of a designated beneficiary who survives the account owner.

Other Drawbacks

Joint tenancy of property between a decedent and a surviving beneficiary may also has similar drawbacks. Upon the death of the last surviving joint tenant, the property is included in that owner’s estate. Joint tenancy has an additional hazard during lifetime which can be illustrated by the following example: Mary has only one child, John. Mary wants to transfer all her assets to John at her death. She hears that an easy way to avoid probate is to add John as a joint tenant, so she does that. John gets sued. Unfortunately, Mary’s property held in joint tenancy with John is an asset that can be subject to John’s creditors, including his spouse in the event that John should go through a divorce. As a result, the “easy” estate planning method of transferring property at death became quite costly for John, since the outright receipt of jointly owned property, or distribution by a simple beneficiary designation, provides absolutely no protection for the beneficiary from their current or future creditors.

Another drawback of TOD and POD beneficiary designations, and ownership of property by joint tenancy, is that these types of property ownership do not plan for the incapacity of the account owner. In other words, if the owner becomes incapacitated, the existence of that form of ownership does not provide management of the asset during the owner’s life.

A Better Solution

A Revocable Living Trust is typically a much better solution for clients, and avoids all of the drawbacks detailed above, including management of assets in the event that the client suffers an illness, injury, or incapacity during their life.

More specifically, the disposition of property at death can be much more flexible, which Trust can include multiple contingent beneficiaries upon the lassing of a client. In addition, the Trust can include specific provisions to ensure that specific assets distribute in the right manner, and at the appropriate time, to designated beneficiaries. In addition, by including appropriate provisions in the Trust, assets which fund the Trust are not exposed to the beneficiary’s potential creditors, whichbos not th case with joint tenancy of property between a decedent and individual beneficary.

Finally, through inclusion of Successor Trustee provisions, a Trust can easily provide management of assets during an owner’s illness, injury, or incapacity. While a Durable Financial Power of Attorney could also accomplish asset management objectives, POAs are often not as readily accepted due to the reluctance by financial institutions’ to rely solely on these documents due to many incidents of fraud. Our experience reveals that a Revocable Living Trust is much more readily accepted by a wide variety of banks, brokersge firms, and other financial institutions.

As detailed above, while joint tenancy, TOD, POD, and beneficiary designations are simple, and can work in some circumstances, these type of beneficiary designations often have their drawbacks.

Feb 1 19

How to Avoid a Guardianship

by Phil Levin, Esq.
Guardianship

Let me get straight to the point: A Guardianship Proceeding, held before an Orphans’ Court Judge in the County where you reside, can be a very costly, stressful, and embarassing public proceeding.

Fortunately, Guardianship hearings can be completely avoided by having valid, well-designed Financial and Health-Care Powers of Attorney that are drafted in accordance with state laws and signed while the Principal is legally competent and acting on their own free volition.

Guardianships are Court sanctioned proceedings where any interested person can Petition the Orphans’s Court to enter an Order of Court which declares another person to be incompetent and incapable to manage his or her own personal health-care and financial affairs.

After a Guardianship Hearing, if the person is deemed incompetent, the Judge will appoint the Guardian. In some cases, the Guardian may be a trusted family member. However, Orphans’ Court Judges have broad discretion to appoint an independent third party to serve a Guardian.

In fact, in many cases, the Guardian appointed may not be a family relation, especially when there are no family members who desire to become the Guardian,bwhen there one or more parties contests the appointment of a Guardian, and where the Guardian’s ability to care for the person is,seriously questionable. But one thing is for certain — once a person is deemed “incompetent”, he or she has no control over who the Guardian will be currently or in the future. Such action is not acceptable to most people, since the vast majority of individuals desire to have control over their personal, health-care, and financial affairs.

For example, imagine someone you have never met is now completely controlling your estate — including all of your financial resources, your health-care decisions, and where you will live. Further, imagine your Guardian having the power and authority to decide when your family, friends, and loved ones can see you, if they are allowed to visit you at all.

Check out the name “Gloria Byars” on Google, and you will find several articles during this past year. Ms. Byars was the Court appointed Guardian for more than 100 individuals, yet had a long criminal record of committing fraud. With little oversight, Guardians, like Byars preyed (and still prey) upon the elderly, who often engage in unscrupulous activities, and who defraund or dissipate the assets of individuals who are declared incompetent by a Judge.

Recently, Pennsylvania legislature has signed into law new rules that take effect for Orphans’ Court Judges to follow when ruling in Guardianship cases. These new rules are intended to make the requirements for serving as a Guardian more stringent. In effect, the new law is designed to reduce, or weed out, some of the bad apples, but the system is slow to change and fsr from perfect. Therefore, it is very wise for you, and your loved ones, to completely avoid a Guardianship proceeding, whenever possible.

Therefore, do not procrastinate, by waiting until it’s too late for you and your family members to have a competent estate planning attorney design and implement valid Powers of Attorney for you. These core and comprehensive estate planning legal documents include your:

– Durable Financial Power of Attorney

– Health Care Power of Attorney, and

– HIPAA Waiver Authorization.

These are the three (3) legal documents that allow you to completely avoid a Guardianship Proceeding, by appointing one,or more people who you decide to step into your shoes and take care of your personal, financial, and health-care affairs, in the event that suffer an illness, injury, or incapacity, whereby you are unable to make important financial and health-care decisions for yourself.

With valid and up-to-date Financial and Health-Care Powers of Attorney in force, you can have peace of mind, and sleep well at night, by knowing exactly who will oversee your investments, and make prudent financial decisions on your behalf, in the event that you suffer a temporary or permanent disability.

Select your own Financial Agent and Health-Care Agent to serve under your Powers of Attorney, by personally deciding who are financially responsible individuals who you trust now to protect you, if something happens tomorrow, when you are not in a position to make extremely important decisions for yourself.

The Levin Law Firm regularly works with individuals to design and implement Powers of Attorney which are appropriate for our clients, in addition to drafting other vitally important trust and estate planning documents.

Since procrastination is the enemy, the best time to act is now, while the purpose and benefits of estate planning legal documents are fresh in your mind.

Jan 1 19

Naming a Trust as Beneficiary of an IRA

by Phil Levin, Esq.
IRA

With IRAs and Qualified Plans, after the death of the “Participant” (the lifetime owner), there are required minimum distributions based on the life expectancy of the beneficiary. Often, people think that an individual must be named as the beneficiary of the retirement assets in order to use the beneficiary’s life expectancy and to prevent a forced faster distribution. But, that isn’t the case. A trust may be designated as the beneficiary. As long as the trust meets a few technical requirements, the IRS will look through the trust to its beneficiaries and use their life expectancies.

One of those requirements is that the trust must be irrevocable by the death of the Participant. So, for example, if you name somebody else’s revocable trust as the beneficiary and that person survives you, that won’t work. But, if you (the Participant) name your own revocable trust, that would work because your trust becomes irrevocable at your own death.

Why might you want to name a trust as beneficiary? A trust isn’t necessary in every circumstance, but they can provide benefits. Here are a couple of the benefits a trust can provide:

Asset Protection. During the Participant’s lifetime a Qualified Plan has unlimited protection in bankruptcy and an IRA has protection up to $1 million. However, a recent Supreme Court case found those bankruptcy protections don’t apply to an inherited IRA or Qualified Plan. A trust can provide an asset protection envelope for inherited assets which otherwise would not be protected, including IRAs and Qualified Plans. In most jurisdictions, if a trust has a third-party trustee and a fully discretionary standard, it provides asset protection.

Asset Management. If a beneficiary lacks the maturity or discretion to manage their own assets, a trust may be ideal. Depending upon how the trust is drafted, it still may use the beneficiary’s life expectancy when determining required minimum distributions, which determine how long you can keep the money in the plan and keep the tax advantages of the IRA or Qualified Plan.
If your beneficiaries could benefit from the asset management or asset protection advantages of a trust, consider naming a trust for their benefit as the beneficiary of your IRA or qualified plan. Naming a trust as beneficiary of an IRA or Qualified Plan doesn’t need to be scary.