FAQ – Social Security Survivor Benefits
Social Security Survivor Benefits are an important component when establishing a financial plan to help clients with their overall planning goals.
A frequently asked question by many of our clients who are widowed is:
“Do my Social Security benefits change upon the death of my spouse?”
Social Security Survivor Benefits offer a surviving spouse the opportunity to significantly increase his or her benefits based upon the benefits that were payable to the deceased spouse. When advising clients, it is vitally important for you, along with seniors and their loved ones, to understand how to maximize those benefits.
In order to assist you and help your clients to better understand Social Security Survivor Benefits, The Levin Law Firm has prepared a FAQ white paper on this topic.
Our “Social Security Survivor Benefits FAQ” includes the following five (5) sections:
- Most Common Scenarios for Clients
- Options for Surviving Spouses
- Graphical Explanation and Examples
- Impact of Divorce and Remarriage
Key Differences Between Survivor Benefits and Spousal Benefits
If you are interested in obtaining our “Social Security Survivor Benefits FAQ”, for your 
use and to share with selected clients, please click “Reply” and type “SS FAQ” in the subject line.
If you prefer, please send your request to us at: info@levinlawyer.com.
Please feel free to forward this edition of Estate Planning Matters to your friends, family members, and colleagues who may need to establish or update their personal estate plan.
To learn more about how The Levin Law Firm can create an estate plan designed to help your clients achieve their estate planning goals, please contact our office to schedule a Complimentary Consultation with attorney Phil Levin at (610) 977-2443.
As detailed in our September 2014 edition of Estate Planning Matters [click here to read], the U.S. Supreme Court decided, in a landmark 9 – 0 unanimous decision, that inherited IRAs are not protected from the claims of current and future creditors of a beneficiary.
The decision in Clark is another significant reason why designating a qualified trust as beneficiary of an IRA is an important planning strategy for clients who desire both asset protection and income tax-deferral benefits for beneficiaries of their retirement plan accounts.
Clark Decision Webinar:
On Tuesday, April 7th at noon, the Society of Financial Service Professionals (SFSP) will host a webinar detailing the Clark Decision, its impact for your clients, and planning strategies that are prudent and effective. I believe this program will be of value to you. It is free to SFSP members, and for non-members the cost is $19.95.
If you are interested in attending this webinar, please see the attached invitation link and instructions for registering on-line, or call the SFSP to join the program at (800) 392-6900.
This Clark Decision greatly strengthens our long-standing position that an IRA Beneficiary Trust is an excellent wealth transfer planning strategy in order to protect tax-deferred retirement plan assets which transition to the next generation. Of course, these Trusts need to be adroitly drafted, by competent legal counsel, and include the proper discretionary distribution standards.
If you are interested in discussing trust and estate planning strategies, which may be of value to you and your clients, please contact Lauren at The Levin Law Firm to arrange a complimentary consultation.
Estate Planning for Unmarried People
If you suffer an illness or injury, and become incapacitated without a Financial Power of Attorney or Health-Care Power of Attorney in force, a local Court will be required to determine who will have the authority to handle your financial affairs and make health-care decisions for you. The Court may not choose the person you would have chosen, if you had taken the time to select and designate an Agent to serve under the terms of your Financial and Health-Care Powers of Attorney. In addition, going to Court to have a judge appoint a legal guardian on your behalf, to make financial and health-care decisions, is time-consuming and expensive.
However, with proper planning in advance of an illness, you can execute a valid Financial Power of Attorney and Health-Care Proxy, giving people you personally choose the legal authority to act on your behalf. These vital estate planning legal documents are also designed to advise health-care providers exactly what type of care you would like, and would not like, in the event of an end stage illness. Therefore, make sure that your comprehensive estate plan includes your Will, along with both Financial and Health-Care Powers of Attorney.
Single individuals who are widowed or divorced also need to make especially certain that the beneficiary designations of their IRAs, qualified plans, annuities, and life insurance policies reflect their current wishes. If beneficiary designations are not up-to-date, an ex-spouse could easily receive significant funds from these accounts, regardless of what your Will states, because IRAs, qualified plans, annuities, and life insurance distribute by the beneficiary designation on file, not under the terms of your Will.
In a nutshell, an up-to-date estate plan allows you to appoint your Agents for making financial and health-care decisions if you become incapacitated, and to decide who receives your property in the event of your passing.
Therefore, we urge you and your clients to: “Plan Today to Protect Your Estate.”
To learn more about how The Levin Law Firm can create an estate plan designed to help your clients achieve their wealth transfer goals, please contact our office to arrange a Complimentary Consultation at (610) 977-2443.
The first quarter of each year tends to be a busy time for estate planners, as clients follow-up on resolutions to get their estate plans in order. But even if you are not hearing from clients, you should consider being proactive with them; the beginning of the year is a great time to handle many estate planning matters.
Please consider using the following to-do list with your clients to give their estate plans a review and update:
1. MAKE GIFTS EARLY EACH YEAR –
Many clients know that each year everyone can make annual exclusion gifts; the amount of which is still $14,000 per recipient. Married couples can gift $28,000 together per recipient, due to gift-splitting.
What your clients may not know, is that the best possible time to make gifts is at the beginning of the year. That way, if something were to happen to your clients during the course of the year, the value of the gift would already be outside of the estate for estate tax purposes.
Even with very high federal estate tax exemption amounts ($5,430,000 per individual in 2015), annual exclusion gifts can still make sense for many clients, especially those living in states with a state estate tax or inheritance tax.
2. FUND REVOCABLE TRUSTS –
If your client has created a revocable trust, find out whether any assets have been transferred into it. Over the years, I have found that many clients create revocable trusts, but never use them to their full potential. Clients often know that there are benefits to funding their trusts, but they simply never get around to doing so.
Help your clients transfer assets into their revocable trusts in order to help provide quick access to their property in the event of an illness, injury, incapacity or death, and to help keep personal affairs private. Failing to do so can end up costing clients and their loved ones both time and money.
While some attorneys may charge extra to help clients fund their revocable trusts, in my experience many financial advisors include this as part of their services. Helping with the paperwork involved in transferring financial assets to revocable trusts can be an important value-added service, which financial advisors and estate planning attorneys, often provide to their clients.
3. CHECK BENEFICIARY DESIGNATIONS –
One common (and potentially costly) estate planning mistake involves outdated or never-signed beneficiary designation forms. It is extremely important to check periodically to make sure beneficiary designations are correct, especially if a client has gotten divorced or married during the preceding year, or if a previously named beneficiary, such as a parent, child, or sibling, has died.
For many clients, life insurance policies and retirement plan benefits represent some of their most valuable assets. While it costs virtually nothing and takes very little time to fix or change a beneficiary designation during life, dealing with an incorrect named or outdated beneficiary after a death can be very costly and difficult, and very likely, impossible to modify.
4. REVIEW NAMED FIDUCIARIES –
It is critically important to choose the proper fiduciaries in an estate plan — and to review named fiduciaries on a regular basis. Your client may have appointed the right person or financial institution at a certain point in time, but subsequent changes in assets and/or family dynamics could have vastly altered their situation.
Check existing estate planning documents periodically to see who is designated as Executor, Agent under both Financial and Health-Care Powers of Attorney, as well as Trustee under their Will, then arrange a meeting to discuss with your client whether the choice which they made still makes sense today. Ask your client: “Has a former colleague, friend, or family member been appointed as a fiduciary where there is no longer much contact?”
I also find that many times younger adults name their parents as Executors, Trustees, and Agents — who, as they age, may no longer be able to perform the expected tasks for a variety of reasons. Therefore, it is vitally important that you and your clients review the fiduciaries designated in their estate planning legal documents to ensure that clients still have the right person, and if not, arrange to meet with an estate planning attorney to update their plan.
5. GET PROCRASTINATORS TO ACT –
A client recently shared the following bit of humor with me: “I joined a group for procrastinators……but we haven’t met yet.”
For those among us who have clients without an estate plan….which comprise over 70% of Americans, make it a goal for them this year to get one! Many investment and financial advisors tend to forget the fact that most people do not have an up-to-date estate plan — in fact, the vast majority of people still do not have any type of an estate plan at all, let alone one that is adequate for their needs.
While it can be difficult to motivate the unmotivated client, especially those that like to procrastinate making important decisions, an unexpected illness, incapacity, or death is very trying for most families, and is unfortunately not a rare occurrence. Therefore, it is critical to lay out your client’s options and make sure they understand the detriments of not having an estate plan in place — as well as the benefits, and peace of mind, which comes with having a comprehensive and up-to-date estate plan.
The estate planning process does not have to be daunting or complicated; therefore, make sure your clients know that the comfort and stability which comes from having an estate plan in place will be worth their time and effort.
NEXT STEPS FOR YOUR CLIENTS –
Now is an excellent time of year to meet with clients and suggest reviewing and updating their estate plans.
If you have any questions regarding trust and estate planning matters, please e-mail Phil Levin, or call Lauren to arrange a meeting with Phil at (610) 977-2443.
To learn more about the trust and estate planning services which The Levin Law Firm provides to our clients, please visit our website.
In one of its final actions, the 113th Congress passed the Tax Increase Prevention Act of 2014 which the President signed into law on December 19th. This legislation extends for one year a host of popular tax provisions (commonly referred to as “tax extenders”) that had expired at the end of 2013.
One of the tax extenders is the IRA charitable rollover. Persons age 70½ or older can make a qualified charitable distribution (QCD) of up to $100,000 from their IRA and exclude the distribution from their gross income. The distribution must be made directly to a qualified charity by December 31, 2014.
QCDs count toward satisfying any required minimum distributions (RMDs) that the IRA owner would otherwise have to receive from his/her IRA, just as if he/she had received an actual distribution from the plan. IRA owners aren’t able to claim a charitable deduction for the QCD on their federal income tax return.
We hope that this recent news is of value to you and your clients in connection with their financial charitable planning for 2014.
As Winston Churchill said, “We Make a Living by What We Get, but We Make a Life by What We Give.”
The Levin Law Firm wishes you and your family a happy, healthy, and prosperous New Year!
