The Importance of filling out Beneficiary Designation Forms

Ruiz v Publix Super Markets, Inc.

 

Whether you have any Estate Planning in place or not, you need to understand this recent case

 

There was a case decided in a Florida Federal District Court in March of 2017 called Ruiz vs Publix Super Markets regarding an improperly filled out Beneficiary Designation Form.  

 

The employee was a participant in the company’s retirement plan and had filled out a beneficiary designation form.  These forms are used to tell the Plan Administrator who to give the money to, if there is any left, after the employee “participant” passes away.  The employee had done so, but down the road had decided to change the beneficiary.  Well, the plan documents provide very specific instructions on how to fill out the beneficiary designation forms.  On this occasion, even though the employee called the administrator, the employee filled the form out incorrectly.  The administrator refused to give the death benefits to the new beneficiary and instead gave them to the original beneficiary.

 

The Federal District Court held that the plan administrator had acted properly because substantial compliance is not enough and that the U.S. Supreme Court has stated that the plan administrator must act in accordance with the plan documents.  Further, the court stated that there was no justification to inquire into the expression of intent that does not comply with the plan documents.

 

So, as you can imagine, even if you don’t have any estate planning in place, the proper filling out of your plans beneficiary designation forms is important.  Likewise, if you do have a Revocable Living Trust, or perhaps a Stand Alone Retirement Trust, it is equally important to have your forms filled out correctly.  If you’d like to read about the advantages of estate planning, see my blog about Revocable Living Trusts, and Stand Alone Retirement Trusts.

 

See a lot of helpful estate planning information on my website at: www.myestate-plan.com

 

My most important job is to listen to your wishes then suggest solutions.  Call today and let’s start planning!  I always answer my own phone, and I even make house calls!

 

Thanks for reading!

 

Dan Powell

 

1-619-980-2297

 

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

Trump’s 2017 Tax Plan

 

On Wednesday, April 26, 2017 President Trump presented a proposal to overhaul the Tax Code.  The proposal was very brief – just one page.  Of the seven items, I wish to discuss only two because they most influence Estate Planning, and those are the proposed changes to Capital Gains, and the Federal Estate Tax.

 

Proposed Changes to Capital Gains:

Proposed to be reduced from 23.8% to 20%

 

 

Proposed Changes to the Federal Estate Tax:

 

Complete elimination of the Federal Estate Tax.  It is indexed for inflation, and as of 2017 it is:

Individual – $5.49 million, and for married couples it is $10.98 million (double what it is for a single person)

 

 

What are Capital Gains?

 

When you buy something and it goes up in value by the time you sell it, you’ve realized a Capital Gain, and you are supposed to pay taxes on that gain.  Many people think this only applies to rich investor types, but in-fact, it applies to a single silver coin, your Samsung TV, or whatever!

The 3.8% reduction represents the 3.8% surtax that was added by President Obama during his administration to help fund Obama Care (or the Affordable Care Act).

 

 

What is the Federal Estate Tax (or sometimes “Federal Estate Tax Exclusion”, or “Federal Inheritance Tax”, or “Federal Death Tax”)?

 

This is the amount that can be passed to your beneficiaries free of any tax imposed at the federal level.  Luckily for most of us, this tax never kicks in and gets applies to our estate.  As a matter of fact, it only applies to less than 1% of the population.  I said “luckily”… perhaps we’d all like some of that luck!

 

See my Blog for a more detailed discussion of Federal Estate Tax and see my discussion of how the Marital Deduction plays a part in the Federal Estate Tax.

 

Estate planning is more than just saving on taxes (at any level).  If you need help, please feel free to give me a call.  I always answer my own phone.

 

 

Conclusion

Well, for now there is no conclusion.  We will keep our eye on things and see what happens.  These were just proposals after all.  Stay tuned!

My most important job is to listen to your wishes then suggest solutions.  Call today and let’s start planning!

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Thanks for reading!

 

Dan Powell

 

1-619-980-2297

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

Recent Law Soon to Allow Disabled Persons to Create Their Own Special Needs Trust

 

What is a Special Needs Trust?

Disabled persons who receive means-tested public benefits like Supplemental Security Income (SSI) and Medicaid must have no more than $2000 in countable assets in order to qualify (among other requirements).  A Special Needs Trust is used to prevent disabled persons from being disqualified from receiving means-tested public benefits if they are to receive the benefits of trust assets or a personal injury award.  

 

Types of Special Needs Trusts

There are three types of Special Needs Trusts – first-party special needs trust, third-party special needs trust, and pooled trust special needs trust.  For this blog, we will only be discussing first-party and third-party special needs trusts. A pooled trust is a group trust that is administered by a nonprofit for many beneficiaries.

The main – and most important difference – between the two types of trusts is that a third-party special needs trust cannot hold funds belonging to the beneficiary (the person with special needs).  So, if a person (under 65) with special needs wins a personal injury award, or inherits money directly, and not thru a bequest directly to a third-party special needs trust, they will need to have a first-part special needs trust established.  Another key difference between a first-party and third-party special needs trust is that because a third-party special needs trust holds assets that never belonged to the beneficiary, the government is not entitled to reimbursement from trust assets after the beneficiary passes unlike a first-party special needs trust.  Thus, a third-party special needs trust can pass assets on to other family members after the beneficiary with special needs passes.  Also, a third-party special needs trust can be established for the benefit of a person with special needs by anybody other than the beneficiary.  A first-party special needs trust must be established by the person’s parent, grandparent, guardian, or the court – but keep reading below for recent changes to this law.

 

Recent changes to Special Needs Trust Law

As it stands this very minute, the law presumes that a person with disabilities lacks the capacity to establish their own first-party special needs trust, and therefore a parent, grandparent, guardian, or the court must establish it for him or her.  This is about to change.  In December of 2016 the house passed H.R. 34, which includes the Special Needs Trust Fairness Act and makes a simple modification to 42 U.S.C. 1396p(d)(4)(A).  The president has promised to sign this into law.  The significant change that this law brings about is that it allows a disabled person with mental capacity to establish his or her own first-party special needs trust.   

 

So, to summarize:

  • A Special Needs Trust is used to prevent disqualifying a person receiving Medicaid and/or Supplemental Security Income (SSI)
  • A first-party special needs trust holds assets that will belong to the beneficiary (such as a direct inheritance, or lawsuit award)
  • A third-party special needs trust holds assets that never belonged to the beneficiary (such as an inheritance that is being given to the special needs trust directly)
  • A first-party special needs trust can soon be established by a disabled person under 65 years old with mental capacity instead of needing a parent, grandparent, guardian, or courts intervention
  • A third-party special needs trust can be established by anybody except the person with special needs
  • The government can seek reimbursement from a first-party special needs trust after the beneficiary dies, whereas this does not happen with a third-party special needs trust

 

If you have any questions, or need to establish a Special Needs Trust, please call me today and let’s start planning.

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

 

William Daniel Powell (Dan)

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and on my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Monday, 04 July 2016 22:01

Happy Fourth of July 2016

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Happy Fourth of July 2016

 

The Fourth of July is probably my favorite holiday other than Christmas.  It is a great time for all of us to reflect upon the founding of this great nation, this wonderful republic, this great experiment. 

 

It sounds kind of strange to think of the founding of this nation as an experiment, but it certainly was.  Never in the history of the world has a nation founded on the principals that the United States was founded on been tried.  As a matter of fact, it is the manner in which we were founded that allows us to create an estate plan in the first place.  We have property rights in this country.  These property rights allow us to manage and dispose of our property how we see fit.  That sounds basic and simple to us, but please remember that this is the EXCEPTION to the way it was in most of the world. 

 

You can read my blog on the Constitution and the Declaration of Independence here.

 

I thank God that I was born an American.  I believe America is exceptional.  I believe our best days are ahead of us.

 

 Please feel free to give me a call today and we can review your situation and other Estate Planning goals.  Everyone’s situation is different, and I can help create solutions. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

William Daniel Powell (Dan)

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Sunday, 08 May 2016 16:15

Happy Mother's Day 2016!

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Happy Mother’s Day 2016!

 

Happy Mother’s Day to all of you mothers out there!  I hope you are spoiled today.  My mom and dad moved out of California last year, so this year was a call, mailed gifts and a call. 

 

Moms are great aren’t they?  Who makes the best potato salad in the world?  Well, my answer is “my mom of course”, and your answer is likely the same!  Isn’t that something?  Someone else’s potato salad is always just a little off, isn’t it?  It’s strange how my grandma’s potato salad was also the best… something I must ponder.

 

Well, enjoy your day.  Get spoiled, or demand to be spoiled you mom’s out there.  Go spoil your mom’s those that can, and if mom is gone, sit and spend some time remembering.

 

I love you mom!

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Wednesday, 04 May 2016 01:29

Prince Dies Without a Will or Trust

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Prince Didn’t Have any Estate Plan!

 

I am always surprised to hear about people that die without any estate plan in place.  I am especially surprised to hear when people with large estates pass away with no plan in place.  This was the most recent case with Prince.  Price died with no Will, and no Trust.  Yesterday a special administrator was appointed.  Now everything that transpires, because the estate will have to be probated, will be public record.  Moreover, a Will is not private, and is easier to contest (generally) than a Trust.  Michael Jackson died with a Will and provided for his children via testamentary trusts, but still this is a public transaction that could have been avoided with a proper estate plan perhaps utilizing a Living Revocable Trust, Irrevocable Trust, or other means.

 

Upon hearing that people die without estate plans in place make me wonder why.  I wonder if they think they are too young to die, or if they think they are too young to plan.  Perhaps they don’t prefer to contemplate their own demise.  No matter the reason, we all know and need to come to grips with the fact that we could die at any age, that having a plan is far better than not planning, and planning for our demise is one of the best gifts we can give to those we love.  A Revocable Living Trust, an Advance Healthcare Directive and other proper estate planning methods can take tremendous stress off of your family.  It can also minimize fighting among family member (not always, I’ll give you that!) and insure that your hard earned assets are given to those you desire to provide for.

 

I believe you are never too young to plan, no estate is too small to prevent providing some peace of mind, and planning is an excellent way to show that you care and that you are remembered.  Please feel free to give me a call and we can establish your Living Revocable Trust or other estate plan objectives.  If you have specific estate planning goals in mind, I can help create solutions you may not be aware of. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Saturday, 23 April 2016 00:37

Same-Sex Couples and Estate Planning

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U.S. v Windsor

 

U.S. v Windsor was an estate tax case.  A same-sex couple were married in Canada and lived in New York.  One of the parties died in 2009 and gave her entire estate to the other named Edith Windsor.   She tried to claim the federal estate tax marital deduction and was denied by the IRS on the grounds of the DOMA provisions.  DOMA is the Defense of Marriage Act and stated that the definition of “marriage” and “spouse” for the purposes of federal law only included persons of the opposite sex.  Mrs. Windsor took the case to the Supreme Court of the United States and DOMA was held unconstitutional. 

 

After the U.S. Supreme Court decision, the IRS announced it would recognize for federal tax purposes the validity of a same-sex marriage that was valid in the state in which it was entered into, and it was not important where the couple is domiciled.  There has also been an expansion to include qualified retirement plans.  The decision in this case was on June 26, 2013.  A lot has transpired since this decision and on June 26, 2015 in Obergefell v. Hodges, the United States Supreme Court has declared that same-sex marriage is legal in all 50 states. 

 

 

The Effects of Windsor and Obergefell

Prior to the decisions in these two cases, a same-sex couple could not take advantage of the federal estate tax marital deduction, portability, and other deductions.  Post Windsor, estate planning for same-sex couples was complicated in that the couple could take advantage of federal level deductions, but perhaps encounter state level tax implications.  Since Obergefell, estate planning has become less complicated for same-sex couples. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

I would love to help you create your estate plan and help you provide the kind of gift that you want to give to your beneficiaries.  Call me today and we can get it done!

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here.

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Monday, 18 April 2016 19:44

Tax Day 2016

Written by

Well folks, it is Tax Day 2016.  It was extended to the 18th this year because of Emancipation Day.  This is a holiday that is usually only observed in Washington D.C.  Man, I wish I had all the holidays that the government gets!  Sometimes when Tax Day falls on the weekend, the date for filing gets moved back, but this year it was due to Emancipation Day which fell on Friday April 15.

 

Perhaps it is fitting that we file taxes in April.  Did you ever stop to think about how long you have to work before you are “working for yourself”?  For example, if you pay 25% in taxes, then you work from January 1st to March 31st just to pay taxes.  On April 1st you start working for yourself.  Wow, that’s a long time!

 

Will my Beneficiaries have to Pay Taxes?

The answer to this question is “it depends”.  Some gifts will trigger a taxable event, and other gifts given in a particular manner will do the same.  Taxes are usually a big concern for someone that wants to plan their estate.  Fortunately for most of us, federal estate tax is not usually an issue that we need to concern ourselves with.  Depending, however, on the size of your estate some specific planning may be in order.  Also, for many of us our IRA or retirement plan is a substantial asset, and may represent a large percentage of our estate.  Care must be taken with such assets to prevent a “taxable event”.  Keep in mind that it is almost always better to give something in Trust than it is to give it outright.  Providing a gift in Trust helps provide some layer of protection to the beneficiary from creditors, predators, bad marriages, and sometimes from the beneficiary him or herself. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

I would love to help you create your estate plan and help you provide the kind of gift that you want to give to your beneficiaries.  Call me today and we can get it done!

 

Thanks for reading my blog.

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

****************

This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

Has California (and especially San Francisco) Made it Harder for Young People to Find a Job?

 

California’s New Minimum Wage Law

Recently, California’s Governor Jerry Brown signed a new law that will raise California’s minimum wage to 15 dollars an hour by 2022.  Mr. Brown was quoted as saying that “economically, minimum wages may not make sense."  Wow.  Then why did he sign it?  Jerry said “this is about economic justice”. 

Find Mr. Brown’s quote here:

https://www.gov.ca.gov/home.php

For a full text of the bill, look here:

http://leginfo.legislature.ca.gov/

 

San Francisco just passed a law requiring 6 weeks of leave for parents that give birth or adopt a child.  This leave is given at 100%, and not a reduced amount making San Francisco the first city in the United States to require businesses to provide 100% of the employee’s salary.

 

On Monday, April 11, 2016, Jerry Brown signed California’s new expanded family-leave law in which men or women are paid 70% of their wages for up to six weeks, with those earning more up to 60% of their wages. 

 

I think it’s pretty safe to assume that most Americans have never started nor run their own business.  I think it’s even more likely that most politicians have never done so either.  Many politicians have never even held a normal job.  I think they are disconnected to say the least.  I have started a few businesses in my life.  The most dangerous time in a new business is when you expand, and when you hire employees.  The slightest misstep can spell the end.  Every time government adds a law or regulation, it costs businesses money.  It also has the effect of causing many businesses from expanding or hiring.  Politicians do thing for groups of people that they can point to and say “see these people?  I helped them”.  A politician will rarely help a group that cannot be shown.  The real minimum wage is zero.  There is a group that will be expanding as time passes, and that is the group that can’t get a job in the first place.  Minimum wage jobs are a stepping-stone, not a destination.

 

That’s my two cents.  What do you think?

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

My most important job is to listen to your wishes then suggest solutions.  Call today and let’s start planning!

Thanks for reading!

 

Dan Powell

 

1-619-980-2297

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

****************

This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

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