The Social Security Administration has finally gone online with earnings and benefits information for taxpayers, which is now available at www.ssa.gov/mystatement/.

To access your information, you’ll first need to register on the site, where you’ll be asked a series of security questions and answer multiple choice questions that make you aware how much the government really knows about you.

Once you register, you’ll be able to view your earnings history, which may be good for a laugh or two as you see what you earned your first few years of employment.  But there’s a serious side to checking this data as well.  If there are some earnings years missing from your record, you could get shortchanged on benefits – or worse, if inaccurate reporting has inflated your earnings, you could get stuck with a bill from Social Security.

The website also calculates your estimated benefits in three ways:  early retirement at 62, full retirement age and benefits if you wait until you turn 70.   You’ll be able to see clearly how waiting impacts your benefits – in most cases, taking early benefits can cost you up to one-third over your lifetime versus waiting until you reach full retirement age.

In determining the best time to take Social Security benefits, other factors carry weight as well, including your health (if you have a serious illness or a family history of short life expectancies, taking benefits early may be best), your marital status (delaying your benefits could boost your monthly income significantly and mean a larger survivor benefit for your spouse) and whether or not you plan to keep working and won’t need your benefits until much later.

An even better source of information could be a California estate planning attorney, who can help you with the big picture when it comes to retirement, not just one piece of the puzzle.

In a decision handed down last week, a Pennsylvania appeals court found a son liable for his mother’s $93,000 nursing home bill under that state’s filial responsibility law.

Currently, 30 states have filial responsibility laws on the books, and California is one of them.  The California Family Code Sec. 4400 reads:

Except as otherwise provided by law, an adult child shall, to the extent of his or her ability, support a parent who is in need and unable to maintain himself or herself by work.

While these cases are still fairly rare, more may be coming to the fore because of The Deficit Reduction Act of 2005, which made it more difficult for the elderly to qualify for Medicaid long-term care coverage.  This federal rule change has resulted in more nursing homes using filial responsibility laws to pay the bills, as in the recent Pennsylvania case cited above (Health Care & Retirement Corp. of America v. Pittas) .

If you have an elderly parent who is financially dependent on you – or could become so – you may want to consider the following:

Estate planning.  If you have an aging parent who is financially dependent on you, they should all have at least a simple estate plan.  Even if you have to pay for it, taking this step can save you in terms of probate or litigation.

Asset protection planning for Medicare/Medicaid assistance.  This can help a parent who may need extensive Medicare/Medicaid coverage avoid losing their assets to the state, but you need to do it now – this must be done at least five years before the need arises.

Life insurance.  Look into purchasing life insurance for elderly parents; the benefits could be used to pay final long-term care bills.

Long-term care coverage.  If you have elderly parents who count on you for care, buying long-term care coverage may help reduce what can be a substantial cost.

Review elderly parents’ health care coverage.  Review your elderly parents’ health care coverage and fill the gaps so your own financial future is not impacted by unexpected costs.

Our California asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

A California appeals court has ruled that intentional interference with an expected inheritance is a valid cause of action in Beckwith v. Dahl, becoming the first California Court of Appeal to do so.

In the case, a dying man named Marc MacGinnis drafted a will that left half his estate to his partner, Brent Beckwith, and half to his sister, Susan Dahl.  MacGinnis drafted the will on his personal computer and showed the draft to Beckwith.  While seriously ill and awaiting surgery, MacGinnis instructed Beckwith to print out the will so he could sign it.  Beckwith could not find the will, so he drafted a new one using online forms.  Beckwith then showed the draft will to Dahl.  Dahl, who knew that absent this new will she would inherit the entire estate, told Beckwith not to have MacGinnis sign the will and that she would instead have an attorney draft a more tax-advantaged trust.  Dahl never had the trust drawn, and MacGinnis died a few days later.  Because MacGinnis died with no will, Dahl inherited the entire estate.

Beckwith then sued Dahl for his share of the estate and citing the facts of the case, the Fourth Appellate District California Court of Appeals ruled that “it is time to officially recognize” intentional interference with an expected inheritance (IIEI).  The court laid out the five elements necessary for a plaintiff to bring a valid cause of action using IIEI:

1. An expectation of receiving some beneficial interest via inheritance;
2. Causation, meaning that there must be reasonable proof that the bequest would have been in effect at the testator’s death if there had not been an interference;
3. Intent, meaning that a defendant knew of the plaintiff’s expected interest and deliberately interfered with it;
4. The interference must be independently tortuous;
5. The plaintiff must allege damage by wrongful interference.

The Court also set limitations on IIEI action, including that a plaintiff must have no other remedy in probate, the defendant’s tortuous action must be the reason that probate does not offer an adequate remedy, and the plaintiff must show with reasonable probability that he would have received the inheritance if there had been no interference.

Our Newport Beach asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

Sunday is Mother’s Day, and finding just the right gift to fully express our appreciation can be difficult.  Earlier this week, a Reuters article listed the top 3 legal issues a son or daughter should handle for an aging mother that relate to her long-term care and her peace of mind:

1.  Estate Planning.  Helping your mother plan her estate – or review and update her estate plan if it’s been several years since she has done so – is a thoughtful and generous gift that will keep giving.  The first step is to help Mom make a list of her assets — including possessions, stock and bank accounts and retirement plans – and then take her to discuss an estate plan with a California estate planning attorney.

2.  Choosing a Long-Term Care Facility.  Discuss a long-term care plan with your Mom, for when she is unable to manage on her own.  Whether you plan for her to move in with you, hire in-home help or find an elder care facility she would enjoy, the sooner you make a plan, the easier the transition will be when the time comes.

3.  Protecting Mom From Scams and Abuse – The elderly are frequent targets of financial scams and abuse.  Help prevent her from becoming a victim by informing her of the latest news on these scams.  You may also want to get identity protection services for her, as well as install a security and video monitoring system in her home, which can be especially helpful if she has or plans to get a caretaker.

The gift of a more stress-free life would probably be a welcome one for any mother; helping her handle these legal issues can contribute a great deal to her quality of life.

Our Newport Beach asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

It is currently estimated that Americans have more than $5 trillion invested in IRAs, and much of this wealth will pass to their heirs.  To ensure that it does, be sure you are not committing one of these five costly errors:

1.  The Missing Form – if your family doesn’t know where to find your IRA beneficiary form, then they will be stuck with the default provisions of your plan – which may mean the IRA assets go to your estate, which is not where you want them to go.  Be sure you get an acknowledged copy of your IRA beneficiary form from your plan administrator and keep it with your other important estate planning documents.

2.  The Out-of-Date Form – you should review your IRA beneficiary form after major life changes, like a divorce, marriage, birth of a child, etc.  Even if you include a beneficiary for your plan in your will, the form still rules.  You could inadvertently disinherit a loved one, or worse – have your IRA assets go to the wrong person.

3.  No Back-up Beneficiary – if you do not name a back-up beneficiary, a probate court will decide where the assets will go.  If you only name your spouse and your spouse dies before you do, then the assets will likely be liquidated and taxed, with the remainder going to your estate.  If you name a child as beneficiary, remember that you cannot name a minor!  If your children are not yet 21, you can set up a trust with instructions for distribution.

4.  Not Taking Advantage of the Stretch – setting up your beneficiary designation to stretch IRA payments over the lifetime of a beneficiary can grow those assets significantly over time, tax-deferred.  Unfortunately, this is often undone by beneficiaries who want to cash out immediately – in fact, the IRS says this happens 90 percent of the time.  You can prevent this with an IRA Stretch Trust.

5.  Not Using Creditor Protection – you can protect your child’s inheritance from creditors, bankruptcy, divorce, business failures of just plain poor money management by using a Castle Trust.  These trusts have special asset protection features that help preserve wealth and safeguard assets.

Our Newport Beach asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

A report by Fidelity Investments released today projects that newly retired couples will need an estimated $240,000 to cover their health care costs throughout retirement, according to an Associated Press article.

The projections are based on a 65-year-old couple retiring in 2012 with Medicare coverage, with a life expectancy of 85 for the wife and 82 for the husband.  Fidelity recalculates the projections every year; this year’s projection of $240,000 is an increase of four percent, from $230,000 last year.  The company said that this year’s estimate could change significantly, depending on the upcoming Supreme Court decision on the 2010 health care law, which lowered the projections since it passed.

Fidelity also noted that for the long term, retirees’ cost savings from the 2010 health care law will not be enough to offset other factors that are driving health care expenses up, including new medical technologies, more diagnostic testing and greater use of health care services.

The Fidelity estimate does not include long-term care or dental costs.  Most people do not have significant enough assets to pay for long-term care for one or both spouses, but still have too much to qualify for Medicaid.   While you can “spend down” your assets five years before you anticipate needing Medicaid benefits to qualify, this goes against the grain for most people who have saved their whole lives.

California is one of several states that offers long-term care partnership programs that allow residents to purchase enough insurance to cover the assets you want to protect.  The California Partnership for Long-Term Care is an alliance between the State of California and a select group of private insurers that provides long-term health care policies that allow you to keep a dollar’s worth of assets for each dollar your partnership policy pays out for long-term care, thus enabling you to still maintain your ownership of your assets.  In effect, you purchase a partnership policy that is equal to the amount of asset protection you want.

A partnership policy also allows you to pass assets to a spouse, children or other family members because it exempts protected assets from Medi-Cal Estate Recovery.

You owe it to yourself and your family to consult with an Orange County estate planning attorney about partnership policies and planning for your health care needs during retirement.

Choosing the right fiduciary – the executor of your estate, the trustee of a trust, a financial power of attorney – makes a huge difference in how efficiently, or not, your estate or trust is administered, or how your property is handled in case of your incapacity.

Most people tend to choose a child or other relative to fill this role, since it obviously needs to be someone you can trust unconditionally to carry out your wishes.  However, this can create problems if you have more than one child since:

• It can be extremely difficult for children to be objective.
• It is not unusual for children to disagree over how things should be handled, no matter whom you have designated to do it.
• Oftentimes children have a hard time communicating with each other, especially if they live far apart and/or were never that close growing up.

One alternative is to hire a professional fiduciary, which can be a CPA, a trust company or the trust department of a bank.  A California estate planning attorney can help you find a professional fiduciary as part of the process of creating your California estate plan.  While a professional fiduciary will cost a fee, this may be money well spent since they are usually more skilled in managing assets, which will contribute to the growth of your estate.

You can include a provision that the professional fiduciary can be discharged if family members do not feel he or she is doing a good job.   This allows your family to ensure the estate is being handled properly without actually having to do it themselves.

Our Newport Beach asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

The wedding season is fast approaching, and if you are planning to remarry this year, you need to first examine your estate plan carefully before that march down the aisle.  To ensure your interests are fully protected, be sure to:

Inventory assets.  Both you and your soon-to-be spouse need to make a list of your assets and debts and share it with each other.  This includes retirement plans and life insurance policies.

To combine or not to combine?  Decide with your partner whether or not you want to combine assets once you marry or keep them separate.

Make a plan for your assets.  You and your future spouse need to decide where your assets will go when one of you dies.  Children from a previous marriage can complicate estate plans, because you have no guarantee that if you die first, your spouse will provide for your children.  You can create a trust or purchase a life insurance policy to take care of children, or even provide them with joint ownership of property.

Consult with an estate planning attorney.  If either of you have children from previous marriages, consulting with an estate planning attorney is a must.  Even if you do not have significant assets, you will need to update your will, powers of attorney, health care proxy designations, and more.  An estate planning attorney can also help you figure out if trusts are a good idea for protecting assets for children.

Change beneficiaries.  You will probably want to change beneficiaries on your retirement, pension and life insurance plans if your divorce decree allows it.

Consider a prenuptial agreement.  Especially in situations when one spouse brings significantly more assets to the marriage, a prenuptial agreement can be helpful in protecting assets.

Our Orange County asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

A new study from Ameriprise Financial says that baby boomers are providing financial support for family members in spite of their own uncertain financial futures.

The Money Across Generations study found that boomers are getting squeezed from both ends — 93 percent have provided financial support to their adult children, and almost 60 percent have helped aging parents financially.  In addition, the study found that more than half have allowed their adult children to move back in with them rent-free.

Most boomers are failing to realize the impact all this financial support is having on their retirement goals, with only 10 percent reporting that helping parents has slowed down their retirement savings and 34 percent saying the same for helping adult children.

Ameriprise recommends that boomers ask themselves four questions before providing financial support to a family member:

1. Is this a want or a need? When it comes to living expenses, there is an important difference between a true need and a perceived need. If the expense isn’t a basic need, or if you’ve assisted with the same expense in the past, ask yourself if you are enabling irresponsible financial behavior.

2. Is this a loan or a gift? Consider whether your family member’s circumstances or past behavior indicate that they’ll actually be able to repay you. Also ask yourself whether you’ll be okay – financially and emotionally – if they don’t.

3. What are my motivations and expectations? Consider your own feelings and ask yourself if you’ll resent your decision – or your family member – in the future.  If your expectations aren’t met, will you be disappointed? If so, it may be better to say “no” than risk damaging your relationship.

4. Will this affect my own financial well-being? It’s crucial to take a look at your short- and long-term goals and ask yourself if you can really afford to help. It’s natural to want to provide support, but don’t let a struggling family member jeopardize your own financial security, especially if you’re approaching retirement. By prioritizing your own financial goals and stability, you may even have the ability to comfortably help family members in the future.

Our Orange County asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.

The House GOP freshman class has released an open letter to Speaker John Boehner urging him to bring a repeal of the estate tax bill to the floor for a full House vote, according to a news report.

The Death Tax Repeal Permanency Act of 2011 was introduced more than a year ago and has 206 House co-sponsors, ensuring an easy passage in the House.  In the Senate, John Thune (R-SD) introduced a version of the same legislation in March, and that bill currently has 36 co-sponsors.

In the letter to Boehner, Republican freshman class president Austin Scott (R-GA) wrote that Congressional Republicans “are eager to present a clear cut choice to voters: Support the Republican plan to bury the death tax or support Democrats’ plan to hike the death tax to a crushing 45 percent rate, or higher.”

Scott also noted that a majority of Americans – 60 to 70 percent – have consistently indicated in polls that they support the permanent repeal of the estate tax.

Currently, the estate tax rate is 35 percent on estates worth more than $5 million ($10 million for married couples).  In 2013, the rate is scheduled to go to 55 percent on estates worth more than $1 million ($2 million for couples).

Our Orange County asset protection and estate planning law firm has been a trusted source for estate planning, asset protection and business transactions for more than 35 years.  Contact us today for asset protection and estate planning strategies to meet your unique needs.