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.

Sunday, 05 June 2016 02:51

Long Term Care - Part 1

Long-Term Care Part 1

 

The 65-year-old and over segment of our population is growing, and growing faster than those under 65 years old.  From the year 2000 to 2050, those in the age group of 65 years of age and older will grow by 147%, while those younger than 65 will only grow by 49%.  Moreover, on average, 2 out of every 5 persons 65 years of age or older will need some type of long-term care.  If you don’t have the proper planning in place, the high cost of care can force you out of your own home and into a nursing home.  I think it is fair to say this is a result that none of us want.  Forty percent of us will need some type of long-term care, so all of us should plan.

 

 

What is Long-Term Care?

Long-term care is a variety of both medical and non-medical needs that are performed for us by another.  The needs could include help with cooking, eating, cleaning, dressing, bathing, mobility, or medical care provided by a skilled nurse.  This assistance may be provided either in your own home, or in an assisted living facility, or at a nursing home.     

  

What does Long-Term Care Cost?

 There is no simple answer other than to say it can cost a lot.  The cost will depend on the amount of care required.  Is it just help cleaning and cooking?  Or does the person require 24-hour care?  Towards the lower end, the cost can easily be several thousand dollars per month.  Health insurance and Medicare does not cover long-term care in your home, assisted living facility, or nursing home.

  

How Do I Plan for Long-Term Care?

 The good news is that there are a couple of options available to help us plan for long-term care.  Everyone’s situation is different, so I strongly suggest you consult an attorney to discuss options more fully.  Some options include:

  • Private long-term care insurance
  • “Self-Insurance” or paying out-of-pocket for expenses
  • Life insurance to replace depleted assets used for funding long-term care
  • Utilizing a Trust to provide some asset protection
  • Use up all of your assets and live out your days in a nursing home

 

As you can see, some of these options are more desirable than others, and some may be out of reach.  These and other options will be discussed in future blogs.  Thanks for reading.

 

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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The Longevity Risk – Don’t Outlive Your Money, and Leave Some for the Kids – Part 2

  

What is the Longevity Risk?

 We have discussed what the “Longevity Risk” is in another blog, but it will serve us well to repeat the definition again.  Longevity Risk is the risk of living a long life, but needing so much personal care, such as assisted living or nursing care, that you outlive your money.  When this happens, all of the property and money you were hoping to give to your kids or others may be completely used up and gone. 

 

I Already Have an Estate Plan, Won’t That Protect My Assets?

 Not necessarily.  Many people I’ve run into in San Diego have created some kind of Estate Plan.  Most of the time the Estate Plan will consist of a Pour-Over Will, a Revocable Living Trust, an Advance Healthcare Directive (or ACHD, or AHD), a Durable Power of Attorney (a DPOA or POA), a HIPPA (Health Insurance Portability and Accountability Act) release and some other documents.  That’s great, but that alone doesn’t provide asset protection.  As we get older our needs change.  For most of us our assets also change as we mature.

  

What Can I Do to Protect my kid’s inheritance?

 There are choices available to most of us.  Call me and let’s discuss options and we will see if we can keep the golden years golden.  Please see my Blog for more discussion on the topic of planning for the elderly and asset protection.

 

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

 

Call today and let’s discuss your Estate Planning goals.  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, 21 May 2016 01:02

Standalone Retirement Trust Part 1

Standalone Retirement Trust – Estate Planning for IRA’s

 

Clark vs Rameker

Clark versus Rameker was a case that was heard by the United States Supreme Court and it was a 9 to 0 decision.  The decision was handed down in June of 2014.  The Supreme Court held that inherited IRAs are not “retirement funds” within the meaning of federal bankruptcy law.  The effect of this decision is that inherited IRAs are available to satisfy creditors’ claims if the person inheriting them declares bankruptcy. 

 

Because of this decision, and if you’d like to protect your beneficiary’s inheritance, for the purposes of Estate Planning, we need to take some steps to make sure your beneficiary is protected.

 

In order to protect your beneficiary, a Standalone Retirement Trust (or SRT) should be created instead of just naming a beneficiary on your IRA.  Otherwise, if your beneficiaries have creditors, lawsuit judgments against them, or other predators, the IRA funds can be reached.  Naming a beneficiary on your IRA instead of using a Standalone Retirement Trust means the IRA funds will be given “outright” and gifts given outright are more exposed and generally not as preferred as giving a gift in Trust.  A Trust provides more protection than a gift given outright will ever provide.  Please see my Blog for more on gifts given outright versus gifts given in trust

 

Essentially what happens is that the funds will go to a third party Trust and because the Beneficiary did not create the Trust, did not use his or her own money for the Trust, and cannot modify the Trust, certain protections can be utilized to protect the beneficiary.  The trust must be carefully drafted in order to properly manage the funds and prevent mandatory payouts that will require emptying the IRA in as little as five years.  The Trust must be drafted in such a way as to ensure that the Trust itself qualifies as a “Designated Beneficiary.” The effect of having the Trust as the designated beneficiary means that the Trust will be able to take out what is called “minimum required distributions” (these are minimum dollar amounts that, according to the rules, must be payed out of the IRA) according to the beneficiary’s life expectancy, and not the plan participant’s life expectancy.

 

Please see my Blog for more discussion of Standalone Retirement Trusts and other aspects of Estate Planning.

 

Please feel free to give me a call and we can establish your Revocable Living Trust, Standalone Retirement Trust, Irrevocable Life Insurance Trust (ILIT), or other Estate Planning goals today.  If you have specific estate planning objectives, I can help create solutions. 

 

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

 

Thanks for reading.

 

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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Tuesday, 17 May 2016 02:20

Elder Law and Estate Planning Part One

Elder Law Planning Part 1

 

What is Elder Law?

 

Elder law is simply the legal practice that focuses on the issues that affect the elder or older population.   That is kind of a big answer isn’t it? Well, it is. Elder law is not just cases that involve elder abuse, but any issue that affects the elderly. I am an Estate Planning attorney here in San Diego, and many issues that affect almost all of my clients, young or old, also affect the elderly among us. Estate planning touches almost all of the elder law issues that come to mind first such as:

  • Preventing elder abuse
  • Preventing elder financial abuse
  • Protecting and preserving assets
  • Providing for and planning for incapacity
  • Passing on our property to those we wish to pass it to
  • Managing healthcare costs
  • Managing long term care

 

An Estate Planning Attorney Better Understand Elder Law Issues

 

If estate planning and elder law are not inextricably linked, they are fast becoming more and more blended. With the issues of elder law that cross-over to estate planning, and the growing population of seniors, an estate planning attorney does his or her client a disservice by not addressing these issues with the client, even if the client does not take it upon themselves to ask. The Society of Actuaries has said that the population is aging, and growing faster than the general population. The Society of Actuaries has said that from the year 2000 to 2050, those in the age group of 65 years of age and older will grow by 147 percent, while those younger than that will only grow by 49 percent. You can look at the Society of Actuaries website here.

 

This increase of longevity is concerning because for many of us it presents a “risk” to our financial well-being. It is a risk to our financial well-being because of rising healthcare costs, problems that the Affordable Care Act (or ACA or Obama-Care) created, and because long-term care costs are also going up.

 

 

All of these issues and more will continue to be addressed in my blog.

 

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

 

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.

 

Thank-you for reading.

 

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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