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Will Getting Married Affect an Older American’s Social Security Benefits?

When you are thinking about getting married, Social Security retirement benefits are probably the last thing on your mind. If you are not fresh out of college, however, you need to think about this question: Will getting married affect an older American’s Social Security benefits?

Marriage could affect the amount of Social Security benefits you might get one day, depending on whether it is your first marriage and your age when you marry. Many people discover this fact too late, and then have to live with the consequences.

First Marriages and Social Security Retirement Benefits

If this is your first marriage, you can go back to thinking about the caterer, the cake and who to seat next to whom at the reception. Your first marriage does not change the amount of Social Security retirement benefits that you will eventually collect.

The Social Security Administration (SSA) will calculate the amount of your monthly Social Security check, by using the earnings from your 35 highest-earning years. Your spouse’s benefits will go through the same calculation process.

The only difference that the first marriage makes is that you could have two people in the same household who each get a Social Security retirement check one day, instead of one person, if you stayed single and lived alone. When you qualify for retirement benefits because of your work record and earnings history, the amount is the same, regardless of your marital status.

How Remarriage Can Affect Your Eligibility for Social Security Retirement Benefits

You could marry 12 times, and it would not change the amount of Social Security retirement benefits you will get based on your work record and earnings history. On the other hand, if you are counting on getting benefits because of your previous spouse’s work record and earnings history, you might be in for a shock if you remarry.

If your previous marriage ended because of death or divorce, you can usually start to collect survivor benefits when you turn 60, or at age 50 if you are disabled. A person in this situation who remarries before age 60 (or 50 if disabled) loses the right to get those survivor benefits. The only way to become eligible again under your previous spouse’s work record, is if your current spouse dies or you get divorced.

If you wait until after you turn 60 (or 50 if you are disabled) to remarry, you can still collect benefits using a deceased previous spouse’s work record. So, if you are, for example, 59 years old and not disabled (or 49 and disabled), you might want to wait a year before getting married again.

The rules are different, if your former spouse is still alive and your marriage ended by divorce. You lose the Social Security retirement benefits from the former spouse’s work record, if you marry at any age. You can become eligible again, if the subsequent spouse dies or you divorce. In other words, if you marry again when you are 99 years old, in this situation, you will lose your benefits linked to the former spouse.


AARP. “How does marriage affect Social Security benefits?” (accessed February 18, 2019)



How Trusts Help Estate Planning

The reason the revocable living trust is so appealing is in its name: it can be changed by the grantor at any time. The revocable trust lets you determine exactly how you want your estate to be distributed to beneficiaries upon your death, and can be used to put some assets out of reach of probate, says Barron’s in the article “Why a Trust is a Great Estate Planning Tool – Even if You’re Not Rich.”

Many people want to try to avoid probate, the legal process by which a will is deemed to be valid. The problem of probate is that in some states, it can take a long time, and court fees can mount up quickly. Depending on where you live and how complex your estate is, it could potentially add about 5% to the value of your estate.

There are a number of ways to avoid probate, including owning property jointly, using payable-on-death (POD) accounts, or payable-on-death transfers. Many people use trusts to solve this problem. An estate planning attorney will review assets and determine which ones should be assigned to the trust. Some people chose to put all of their probatable assets into the trust. That may include brokerage accounts and real estate, jewelry, art collections and other valuables.

Retirement accounts, insurance policies and any other assets with beneficiaries are not included in the trust, because they do not go through probate.

The revocable trust allows you to control the trust, including making changes or revoking it completely.

There is a trade-off, however. Since the trust is considered part of your estate, it does not offer tax benefits or asset protection. An irrevocable trust is used by estate planning attorneys to remove assets from the estate, but they are difficult to change or cancel.

Another benefit of a trust is to provide you with clarity and control. A trust can be used to outline exactly how you want heirs to receive their inheritance. You can specific the ages and conditions for heirs. That may include completing college or reaching a milestone in life.

In families with special needs individuals, a Special Needs Trust is used to protect an individual’s ability to receive government benefits. Special Needs Trusts are designed, so that disbursements can take place to cover costs for health or comfort that may not be paid for by Social Security, Medicare or other programs.

In blended families, trusts clarify which assets should go to a surviving spouse and which should go to the children of a first, second or even third marriage.

An estate planning attorney will be able to review your personal situation and make recommendations for the type of trust that will work best for you and your family.

Reference: Barron’s (Feb. 23, 2019) “Why a Trust is a Great Estate Planning Tool – Even if You’re Not Rich”



How Did Designer Karl Lagerfeld Arrange for His Cat in His Estate Plan?

When Karl Lagerfeld died in February at age 85, he was mourned in the fashion world. Lagerfeld had a unique image, and part of that image was his ever-present Birman cat, Choupette.

Forbes’ recent article, “Why One Of Karl Lagerfeld’s Legacies Might Be Estate Planning For Your Pet.” reports that as an arbiter of style, Karl Lagerfeld was always clear and concise in his wishes. That can be seen in how he often spoke about his death. In April 2018, in an interview with Numero he stated, “There will be no burial. I’d rather die … I’ve asked to be cremated and for my ashes to dispersed with those of my mother… and those of Choupette, if she dies before me.”

After Lagerfeld’s death, Choupette continues to be a star. She has become an icon in her own right, because of the love lavished upon her by her owner. With an Instagram following, a coffee table book and a modelling career, this cat will likely continue her pampered existence. However, the designer’s death raises a key concern in estate planning today: the care of a pet when someone dies.

Like Lagerfeld, many people see their dogs, cats, and other animal friends as members of the family. Therefore, it’s only natural that they be part of the estate plan. Since Choupette lived a lavish lifestyle while Lagerfeld was alive, it’s presumed that he likely made the necessary arrangements for his kitty in his estate planning.

A pet trust is pretty straightforward: in your estate plan, you can create a trust that coordinates the care and maintenance of your pet. Like all trusts, there will be a trustee who manages the funds and a caretaker who takes care of the pet. The custodian can request money and the trust specifies the client’s hope that those funds be used by the custodian for the benefit of the pet.

A complicated facet of a pet trust is to consider the care and maintenance of the pet. In Choupette’s case, she lived a life of extravagance, so Lagerfeld probably funded the trust at a level to make sure this lifestyle can continue.

However, for most, there needs to be some formula to fund the trust. This amount often is based on the type of animal and its past and projected future needs. Some pet owners consult with their veterinarian to determine an appropriate amount for the future care needs for their dog, cat or other pet.

In addition to the monetary needs, many people know that there’s a need for the pets to see family members they knew. Some pet owners have planned for visitation of the pet by adult children and sought assurances from their children and other caretaker beneficiaries that they’ll follow instructions to care for the pets for the rest of their natural lives.

When the pet finally dies, the trust ends and the caregiver can be the beneficiary of the remaining funds for taking care of the pet so well.

Reference: Forbes (February 20, 2019) “Why One Of Karl Lagerfeld’s Legacies Might Be Estate Planning For Your Pet”



What Are The Details on Bernie Sanders Estate Tax Bill?

Senate Bill 309 was introduced by Senator Bernie Sanders in January. It is also called the “For the 99.8 Percent Tax.” The proposed legislation would establish a tax of 45% of the value of estates valued between $3.5 million and $10 million.

Rubber & Plastics News reported in “Bernie Sanders introduces bill to re-establish estate tax threshold” that the 77% tax rate would be assessed only on estates worth more than $1 billion, according to the bill. The rate would be 50% for estates assessed between $10 million and $50 million, and 55% for estates between $50 million and $1 billion.

“At a time of massive wealth and income inequality, when the three richest Americans own more wealth than 160 million Americans, it is literally beyond belief that the Republican leadership wants to provide hundreds of billions of dollars in tax breaks to the top 0.2 percent,” Sanders said in a statement accompanying the introduction of S. 309.

“Our bill does what the American people want, by substantially increasing the estate tax on the wealthiest families in this country and substantially reducing wealth inequality,” he said.

Since 2017, the estate tax exemption has been $11.4 million for individuals and $22.8 million for couples. However, that rate is scheduled to expire at the end of 2025.

Sanders’ bill seeks to limit estate planning techniques that help small business owners keep their businesses in the family, such as gifts of interest in a family business to younger family members, says opponents.

The bill would also be inherently unfair to small businesses, even more so than current estate tax law, one association said.

Senate Bill 309 was introduced after the Death Tax Repeal Act of 2019 was introduced. That bill would totally repeal estate taxes. Senate Majority Leader Mitch McConnell (R-Ky.), Senate Majority Whip John Thune (R-S.D.), and Senate Finance Committee Chairman Chuck Grassley (R-Iowa) were the co-sponsors, joined by 26 other Senate Republicans.

Reference: Rubber & Plastics News (February 25, 2019) “Bernie Sanders introduces bill to re-establish estate tax threshold”



Can A Cell Phone Video Become a Will?

What if a grandmother made a statement, while in an intensive care unit, that she wanted everything she owned to go to a grandchild and a brother-in-law? What if that statement was captured on a cellphone as a video? The question was a real one, posed by a reader of My San Antonio in the article “Can a video be used as a Will?”

There are two reasons why a cellphone video is unlikely to be accepted as a will by any court. One is that the cellphone video does not follow the formality of how a will is created and executed. Another is the statue of frauds, which basically says that to be lawfully valid, certain promises must be in writing.

Not only does a will need to be in writing, it must show clear intent to dispose of assets after death. The writing must be dated and signed by the person who is making the promise (the testator). If the will is written by the testator in his or her handwriting, it is known as a “holographic” will. If the will is typed or in someone else’s handwriting other than the testator, which is known as a “formal will,” then it must also be signed by two independent witnesses and must be notarized. The person who is having the will created (again, the testator), must also have legal capacity for the will to be valid.

In some states, including Texas, there was a time when a spoken will, known an a “nuncupative will” could have been recognized. However, that is no longer the case and a verbal will is no longer valid. Even when a nuncupative will was accepted, it was only accepted for inexpensive personal effects, not large assets or real property.

Some states, including Florida and Nevada, now allow a person to make a will online or on their computer and never have it transferred to paper. These are called “digital” or “electronic” wills. In these cases, e-signatures are allowed to be used. Other states have considered bills allowing digital wills, but the bills did not pass. The Florida law allows the digital will to be e-signed, but it must be witnessed by two independent individuals and it must be e-notarized. It should be noted that the will process is not permitted to be used by a person, who is in an end-stage illness or who is legally considered a “vulnerable adult.”

In the state of Texas, the grandmother in the example above is considered to have died without a will, meaning that she died “intestate.” Texas law will determine how her assets are distributed, and that will depend on her relationships and her survivors. If she was married and all children are from that marriage, her assets go to her spouse. If she was married and had children from a prior marriage, her assets are split unevenly between those children and her spouse. If there is no spouse, assets go to her children. There is a tremendous burden placed on the heirs of those who die without a will, since it does take a long time to figure out who their heirs are.

If she had a properly executed legal will, all these issues would be moot. Anyone who owns a home needs to have a will, and this should have been something that was taken care of, long before she became ill.

Reference: My San Antonio (Feb. 18, 2019) “Can a video be used as a Will?”



How Do I Leave My Home to My Family?

Figuring out what will happen to your assets after you pass away, is an unpleasant but necessary task. This ensures that your assets are distributed to the people you want. The publication, the day, recently published a story, “Planning to leave your home to your heirs,” that reminds us that it’s best to begin your estate planning, as soon as possible.

Death can unexpectedly impact young or middle-aged families, and your family may not be sufficiently prepared, if you don’t have a will. Estate planning can make certain that your wishes are clearly stated and executed.

Real estate is frequently given to an adult child, grandchild, or is divided among several heirs. Once you know who will receive the property, discuss your plans with these people to keep them apprised of your plans and avoid any unpleasant surprises.

If you include your home in the will, you can stipulate precisely who should benefit from it. You can also say if you want the home to stay in the family or be sold.

Dividing the interest in a property evenly among beneficiaries might seem fair, but it can also create some unexpected complications. If one beneficiary wants to move into the home and another wants to sell it and split the proceeds, things could get dicey. Discuss this issue with your beneficiaries to resolve this potential conflict in advance. One beneficiary could buy out the other beneficiaries’ shares in the property to take sole possession of it. However, you may need a life insurance policy to be sure that the cash is there for a buyout.

A will is also used to delegate responsibilities to certain heirs. You select an executor to oversee the disposition of your estate after your death.

An outstanding mortgage balance can cause some trouble, when passing on a property. Any debts you have at the time of your death, need to be paid before your estate can be settled. If you were still making mortgage payments, be sure your beneficiaries have a plan to avoid a default. Beneficiaries, a surviving spouse, the executor of estate, or any other party can continue to make payments to your bank to avoid a foreclosure process. There are several ways that your beneficiaries can resolve a mortgage, after they take possession of the home. In addition to just selling the property, they can refinance the loan or pay off the mortgage with any assets they have or receive from your estate. That way, they would own the home free and clear.

Review your will regularly to keep it up to date. Make a change if a beneficiary dies, if your own circumstances change, or if your relationship with an heir goes bad.

You can also transfer your home to a living trust. This lets you use and benefit from the asset while living and then transfer it to beneficiaries upon death. This will avoid the probate process and save heirs time and money. The trust document identifies beneficiaries and determines how the estate will be distributed after death. It can also name a trustee to oversee this process and avoid conflict among beneficiaries.

One downside of a living trust is that any outstanding debts must be taken care of before the home and any other assets in the trust can be transferred to beneficiaries.

If a beneficiary is comfortable with assuming some responsibility for owning your home, you can also update the deed to include them. This can be especially helpful, if your spouse isn’t currently on the deed. This will make transfer of the home easier. If the deed says: “transfer on death,” you own the home outright until your death, then it passes to any beneficiaries you name in the deed. When the deed includes the words “joint tenant with right of survivorship,” ownership of the home automatically transfers to any other co-owners on the deed, when you pass away.

Reference: the day (February 15, 2019) “Planning to leave your home to your heirs”



Power of Attorney, Living Wills: Before a Crisis Strikes

The last thing you want to be doing at three in the morning when you are heading to the hospital to meet up with your frail mother-in-law, is wondering if anyone has signed a health care directive.  However, all too often, this is how the scenario unfolds, says Expert Click in the article “How to Get Power of Attorney for Aging Parents.

A medical power of attorney permits another individual to make medical decisions, when a person is unconscious or unable to make a medical decision. Other documents that are often completed in a hospital setting are the MOLST (Medical Order for Life Sustaining Treatment) or POLST (Physician Orders for Life-Sustaining Treatment). This is also often the time the adult child is asked, if there is a living will.

Both the living will, and the medical and financial power of attorney documents should be created and executed well in advance of the emergency trip to the hospital. However, unfortunately, this is not always the case.

Planning for unexpected medical situations, by having the power of attorney and living will in place in advance is better. Even young people need these documents, since accidents happen.

The problem of having these documents for elderly people, is that they are sometimes resistant to having them created. You may need to have more than one discussion before they agree to complete the forms. While you are working on getting these documents for your parents, have them prepared for yourself and for your adult children.

No one plans to become sick, or to be in an accident. However, the reality is, even if we are lucky enough to avoid accidents or illness, we all age. By having these documents in place, we can be assured that when help is needed, decisions can be made by someone you choose.

The power of attorney and living will require more than just signing off on a piece of paper. They need to include the person’s understanding of what the documents mean, finding the right person to appoint and discussing the medical and financial desires of the person, so the power of attorney agent agrees to fulfill that person’s wishes and has no qualms about following their directions.

Sometimes the person named on these two important documents is not a family member, but a respected and trusted friend or even a professional. Family members are often overcome by emotion at the time of a medical crisis and are unable to make critical decisions. You know your family best: will they be able to act in a time of crisis? If not, you’ll want to name someone else in these documents.

These decisions should be done in conjunction with preparing a will, so the estate plan is in place. An estate planning attorney can take you and your family through the process and will be able to answer any questions you or your aging parent may have.

Reference: Expert Click (Feb. 12, 2019) “How to Get Power of Attorney for Aging Parents.



Using Trusts to Maintain Control of Inheritances

Trusts, like estate plans, are not just for the wealthy. They are used to provide control, in how assets of any size are passed to another person. Leaving an inheritance to a beneficiary in a trust, according to the article from Times Herald-Record titled “Leaving inheritances to trusts puts you in control,” can protect the inheritance and the asset from being mishandled.

For many parents, the inheritance equation is simple. They leave their estate to their children “per stirpes,” which in Latin translates to “by roots.” In other words, the assets are left to children according to the roots of the family tree. The assets go to the children, but if they predecease you, the assets go to their children. The assets remain in the family. If the child dies after the parent, they leave the inheritance to their spouse.

An alternative is to create inheritance trusts for children. They may spend the money as they wish, but any remaining assets goes to their children (your grandchildren) and not to the surviving spouse of your child. The grandchildren won’t gain access to the money, until you so provide. However, someone older, a trustee, may spend the money on them for their health, education and general welfare. The inheritance trust also protects the assets from any divorces, lawsuits or creditors.

This is also a good way for parents, who are concerned about the impact of their wealth on their children, to maintain some degree of control. One strategy is a graduated payment plan. A certain amount of money is given to the child at certain ages, often 20% when they reach 35, half of the remainder at age 40 and the balance at age 45. Until distributions are made to the heirs, a trustee may use the money for the person’s benefit at the trustee’s discretion.

The main concern is that money not be wasted by spendthrift heirs. In that situation, a spendthrift trust restricts payments to or for the beneficiary and may only be used at the trustee’s discretion. A lavish lifestyle won’t be funded by the trust.

If money is being left to a disabled individual who receives government benefits, like Medicaid or Supplemental Security Income (SSI), you may need a Special Needs Trust. The trustee can pay for services or items for the beneficiary directly, without affecting government benefits. The beneficiary may not receive any money directly.

If an older person is a beneficiary, you also have the option to leave them an “income only trust.” They have no right to receive any of the trust’s principal. If the beneficiary requires nursing home care and must apply for Medicaid, the principal is protected from nursing home costs.

An estate planning attorney will be able to review your family’s situation and determine which type of trust would be best for your family.

Reference: Times Herald-Record (Feb. 16, 2019) “Leaving inheritances to trusts puts you in control”



Spare Your Family From a Feud: Make Sure You Have a Will

If for no other reason than to avoid fracturing the family, as they squabble over who gets Aunt Nina’s sideboard or Uncle Bruno’s collection of baseball cards, everyone needs a will. It is true that having an estate plan created does require us to consider what we want to happen after we have died, which most of us would rather not think about.

However, whether we want to think about it or not, having an estate plan in place, and that includes a will, is a gift of peace we give to our loved ones and ourselves. It’s peace of mind that our family is being told exactly what we want them to do after we pass, and peace of mind to ourselves that we’ve put our plan into place.

A recent article from Fatherly, “How to Write a Will: 8 Tips Every Parent Needs to Know,” starts with the basic premise that a will prevents family squabbles. Families fight, when they don’t have clear direction of what the deceased wanted. That’s just one reason to have a last will and testament. However, there are other reasons.

A will is one way to ensure that your property is eventually distributed as you wish. Without a will, your estate is administered as an “intestate estate,” which means the state’s laws will determine who receives your assets after you pass. In some states, that means your spouse gets half of your estate, with your parents getting the rest (if there are no children). If the parents have died and there are no children, the rest of the estate may go to your siblings.

Most people—some studies say as many as 60% of Americans—don’t have a will. It’s hard to say why they don’t: maybe they don’t want to accept their own mortality, maybe they don’t understand what will happen when they die without a will, or perhaps they want to wreak havoc on their families. However, having a will is essential.

Don’t delay. If you don’t have a will in place, stop putting it off. Creating a will gives you the opportunity to effectuate your wishes, not that of the state. What if you don’t want your long-lost brother showing up just to receive a portion of your estate? If you don’t want someone to receive any of your assets, you need to have a will. Otherwise, there’s no way to know how the distribution will play out.

Be thoughtful about how you distribute your assets. If you have children and your will gives them your assets when they reach 18, will they be prepared to manage without blowing their inheritance in a month? A qualified estate planning attorney will be able to help you create a plan for distributing your wealth to children or other heirs in a sequence that will match their financial abilities. You may want to create a trust that will hold the assets, with a trustee who can ensure that assets are distributed in a wise and timely manner.

Every family is different, and today’s families, which often include children from prior marriages, require special planning. If you have remarried and have not legally adopted your spouse’s children from a previous marriage, they are not your legal heirs. If you want to make sure they inherit money or a specific asset, you’ll need to state that clearly in your will. If you are not married to your partner, they will not have any rights to your estate, unless a will is created that directs the assets you want them to inherit.

Parents of young children absolutely need a will. If you do not, and both parents pass away at the same time, their future will be determined by the court. They could end up in foster care, while awaiting a court decision. Battling grandparents may create a tumultuous situation. The court could also name a guardian who you would never have chosen. A will lets you decide.

Speak with an estate planning attorney to make sure you have a will that is properly prepared and follows the laws of your state. You also want to have a power of attorney and a health care agent named. Having these plans made before you need them, gives you the ability to express your wishes in a way that can be legally enforced.

Reference: Fatherly (Feb. 6, 2019) “How to Write a Will: 8 Tips Every Parent Needs to Know”



What Can You Do If Your Dad Leaves Your Out of His Will?

If your father divorces your mother to marry a younger woman, it’s not unlikely that your step-mother will make your dad change his will. The step-mother may then stand to inherit everything. Is there anything the disinherited child can do?

Unless there were some specific circumstances concerning the dad, there’s probably nothing the child can do, says in the recent article “My step-mother changed my dad’s will. I got nothing. What can I do?”

In the U.S., for the most part, a person has the right to leave his or her property and assets to whomever he or she chooses. It’s called “freedom of disposition.” However, even in the United States, some classes of beneficiaries have the right to take ‘against’ the will.” For instance, a surviving spouse can claim an elective share of an estate if he or she is disinherited. The rules for granting an elective share are complicated. However, the thought behind the law is that a spouse has the obligation to provide for the support of his or her spouse and by disinheriting the spouse, they’re violating this duty.

In the U.S., adult children typically don’t have any right to inherit from a parent.

To overcome this, a child would need to prove that his father didn’t act of his own free will. The child would need to show that his stepmother “unduly influenced” his father to change his prior will and leave everything to her. If successful, the father’s property would be distributed according to his last valid will, or if there is no will, according to the intestacy statute.

Proving undue influence can be quite difficult to do. The child would have to show that the step-mother was in what is known as a “confidential” relationship with the father and that there are suspicious circumstances. If so proved, the burden of proof shifts to the step-mother to show that she didn’t unduly influence the father.

This process can become very technical, and each case is very fact specific. If the father was working at his job at the time of his death, it will be extremely difficult to prove he lacked free will. However, if he’d stopped working and had diminished capacity, it would be easier to show undue influence.

Talk to an experienced estate planning attorney about pursuing this type of action.

Reference: (February 8, 2019) “My step-mother changed my dad’s will. I got nothing. What can I do?”