Sign Up For and Check Your Social Security Digital Account

If you have not signed up for an online Social Security account, you really should. If you have signed up but are not checking the information at least annually, you really should do that, too. 

As a cost-cutting measure, in recent years the Social Security Administration has reduced the number of paper statements it mails. It has encouraged people to create online accounts. Today, 42 million have a digital Social Security account.

However, creating an account and actually using it are different. A recent study by the agency revealed that less than half of those with digital accounts logged on to review their accounts in the preceding 12 months. If you are in that group, you are missing an opportunity to check the accuracy of your statements. You're also missing out on information about future benefits that can help you plot your financial future. 

Even if you are still receiving paper statements, it’s a good idea to establish an online Social Security account. Scammers are a nonstop threat, using every trick in the book to pry personal information from individuals and from businesses. Remember the Equifax breach? It exposed the personal data of 143 million people. Social Security numbers are the grand prize for fraudsters. If someone gains access to your number, he/she could then register for your account online - before you get around to it - and direct payments for direct deposits to their own financial institutions. By claiming your own account, you put an extra layer of protection between yourself and identity thieves.

Another advantage of setting up an online account is that it allows you to conveniently accomplish a number of common tasks, such as requesting a replacement card, changing your bank for direct deposits, etc. This is more convenient than a  trip to the Social Security office or hours spent on hold.

To set up your personal Social Security digital account, use this link: https://www.ssa.gov/myaccount/

Social Security Underpaying Some Widowed Spouses

In my July 2017 post I addressed why it is important to educate yourself about Social Security benefits, and to not rely solely on advice from the agency. A recent report from the Inspector General provides fresh support for this notion.

If you can delay taking benefits, the rewards can be substantial: According to the Social Social Security Administration, you will get 132% of your monthly benefit if you wait until age age 70 to collect. However, the Inspector General's audit revealed that Social Security staff often fail to inform widowed spouses that they can claim survivor benefits yet still delay taking their own benefits until age 70. As a result, the audit estimates that 82% of widowed spouses who are entitled to receive benefits are being underpaid. 


The report states, in part: “We did not find any evidence SSA had informed claimants of the option to delay their retirement application when they applied for benefits, as required. We also found that SSA did not have systems controls in place to alert its employees when they should inform [widows] of their option to delay their applications for retirement benefits.”

You can read the original report from the Inspector General  here.  

Some helpful resources to learn about Social Security benefits are:

Official Social Security site calculators

Consumer Financial Protection Bureau

AARP

Financial Engines Social Security Retirement Calculator 

  E$Planner 

Maximize My Social Security

Boston College Center for Retirement Research 

Social Security Solutions

Be your own Social Security advocate

About 10,000 Americans turn 65 each day, according to the Pew Research Center. Social Security offices are fielding massive numbers of inquiries as the Baby Boomers head into their benefits-collecting years. Unfortunately, studies show that office staff do not consistently provide the most complete or accurate information. This can result in an applicant unknowingly leaving dollars in rightful benefits on the table.


I first reported on this problem in my September 2016 post on the General Accounting Office's study. That study led to additional training for Social Security personnel. However, a June 2017 Kiplingers article reveals that deficiencies persist, particularly involving these issues: 

• When to start collecting: Some people will need to collect before full retirement age because of health, financial or other issues. But studies show that others collect early simply because they do not understand the monetary value of waiting. 
• Spousal Benefits: David Frietag of the MassMutual Financial Group notes that single people have 9 different ways to claim benefits, but married couples have 81 options, making their choices far more complicated. There is no-one- size-fits-all plan for optimizing a married couple's Social Security benefits. Each spouse's age, life expectancy and earnings must be considered. Additional rules apply when there has been a divorce and/or remarriage. Social Security agents do not always do the in-depth analysis required for married couples to choose wisely. 
• Working and collecting benefits: If you collect benefits before your full retirement age but keep working and earn more than $16,920, Social Security deducts $1 from every $2 in benefits - but only until full retirement age is reached.

Social Security agents certainly mean well. But they are working in a very complex system, fielding a high volume of inquiries. Moreover, every applicant has individual circumstances and goals that need to be analyzed in order for Social Security benefits to be maximized. Therefore, when it comes to Social Security, you must be your own advocate. There are many resources available online and at your local library.  Here are some helpful ones:

Official Social Security site calculators

Consumer Financial Protection Bureau

AARP

Financial Engines Social Security Retirement Calculator 

  E$Planner 

Maximize My Social Security

Boston College Center for Retirement Research 

Social Security Solutions

Steps to take when a Social Security recipient dies

Despite all the trauma that accompanies the death of a loved one, certain tasks must be attended to without too great a delay. If the decedent was receiving Social Security benefits, one of the tasks is notifying the Social Security Administration. Explaining the myriad of related details and possible scenarios is beyond the scope of this post, but here are some basics to familiarize you with what to expect with regard to Social Security issues.

Notification of the Social Security Administration may NOT be done online. Nor can you apply for survivors' benefits online. To report the death, you must call the Social Security Administration's general number, 800-772-1213, or contact your local office. You can find your local office here.  

It is important to understand that a benefits check represents the prior month's benefits. An individual must be alive for the entire month in order to receive benefits for that month. For example, if someone died in June, the check received in July would be an overpayment, and therefore would have to be returned. Returning an overpayment can be arranged through the financial institution if the recipient's payments were direct-deposited. If the decedent was receiving paper checks, the check must not be cashed and must be mailed back to the Social Security Administration. It's a good idea to send it back by certified mail so you get a receipt. You may also take a check back to your local office. Again, be sure to get a receipt.

Survivors of the deceased beneficiary may be entitled to receive a one-time, lump-sum death benefit of $255. This is awarded to the spouse who was living with the decedent at the time of death, or if living apart, was receiving payment based on the deceased beneficiary's Social Security account. If there is no surviving spouse, a child who was receiving benefits based on the decedent's Social Security earnings may also be entitled to a lump sum payment.   

Monthly survivors' benefits may be available to some family members following the death of the Social Security recipient. Among possible recipients are:

• A widow or widower age 60 or older, or if disabled, age 50 or older. 
• A widow or widower of any age if caring for a child of the decedent who is under age 16 or disabled 
• An unmarried child of the decedent who is under age 18, or up to 19 if enrolled in school full time; or a child over 18 if disabled, provided the disability developed prior to age 22. 
• Parents over age 62 who had been dependent on the decedent for at least half of their support.

For more information on Social Security issues when a loved one dies, check out his Social Security Administration publication. 

The Karp Law Firm's Florida estate administration lawyers can help personal administrators, trustees and loved ones of decedents handle the many legal, financial and administrative tasks that require attention following a death. You do not have to go it alone. Contact us here or call us at 561-625-1100.

 

Do your Social Security homework before you apply for benefits

If you are relying solely on the Social Security Administration staff or its website to help you determine when and how to take benefits, you should probably do a little more research.

The General Accounting Office just released its analysis of how effectively the Social Security Administration advises applicants. The report, provided to the Senate Special Committee on Aging, shows the agency could do better. After observing several staff-applicant interactions at field offices and studying the agency's website, the GAO concluded that claimants do not always get accurate advice. This can lead to potentially missing out on thousands of dollars in available benefits.

Social Security rules are anything but simple. Many people do not understand how monthly benefits are calculated; the dollar value of delaying benefits; the retirement earning test; and how to best coordinate benefits with a spouse. The GAO found that agency staff do not reliably discuss these critical issues with applicants, or provide accurate information when they do. Apparently, some staffers find the rules befuddling, too - or perhaps are sometimes too pressured to get down in the weeds with claimants. (I recently visited a local Social Security office to take care of some business and found people waiting many hours to speak with someone. And these were the people who had called ahead for appointments.)

People who apply online get better information, the GAO found. But even the online process does not effectively guide claimants to their best choices. For example, the GAO found that the impact of longevity on benefits is not properly factored into the online calculations. Nor does the online process inform users that benefits are based on the highest 35 years of earnings.

As in all things, you have to be your own advocate. My advice is to gather information from other sources; then, you will have a better idea of what you should be asking about when you do go to the Social Security Administration. There is some excellent software available to help you do this. Some of it is free, some not. Here are some suggestions from around the web:

AARP

Financial Engines Social Security Retirement Calculator 

 

E$Planner 

Maximize My Social Security

Social Security Solutions

And of course, there is always the local library.

New Social Security scam looks real but don't fall for it

The email's subject line says "Get Protected," but following its instructions will do anything but protect you. The sender appears to be the "Social Security Administration," but it's not.

It's a new and devious phishing scam. The real Social Security Administration is warning consumers about it because the email looks very authentic. The email claims that the Social Security Administration has new features that will alert you to unauthorized use of your Social Security number and help you monitor your credit reports. The email even refers to a piece of legislation called the "S.A.F.E. Act of 2015" - which doesn't exist.

If you get a phishing email like this in your inbox, don't click! If you do, malware will immediately get installed on your computer. And don't click on any links in the email. Those links will send you to a fake Social Security website that will prompt you for personal information.

Instead, forward the email to spam@uce.gov. Then delete it. You might also want to warn your family and friends about this new scam.

Spouses lose two Social Security-maximing strategies

Some say the federal budget passed in October closes Social Security loopholes that needed closing. Others say it cuts off a necessary financial lifeline for married seniors who rely on Social Security benefits to get by. Either way, the bottom line is that Social Security is now eliminating two techniques that in the past allowed married couples to leverage their benefits: 

After April 30, 2016 "File and Suspend" will no longer be available. Since the technique will soon be defunct, l will provide just a brief description of how it works (or worked): The higher wage earner, Spouse A, files for benefits upon reaching full retirement age. That allows the other spouse, Spouse B, to begin collecting spousal benefits based on A's earnings history. Spouse A then suspends benefits payments. The net effect: both spouses delay their retirement benefits so their earnings can continue to grow, allowing them to collect a larger benefit upon reaching age 70. You can read more about file and suspend here.

Note: Effective April 30, 2016, workers can still file and suspend, but their spouses cannot collect spousal benefits during the suspension period.

Restricted applications are eliminated for some, effective January 1, 2016. Right now, a married person at full retirement age can apply for spousal benefits, and then, at age 70, switch over to receiving his/her own benefits. This allows the person to take advantage of delayed retirement credits on his/her own earnings history. But effective January 1, 2016, the Social Security Administration will no longer permit restricted applications if the married person is less than 62 years old by the end of 2015. However, that individual can file a restricted application at any time after Janary 1, 2016, provided he/she is 62 or over before January 1, 2016. 

Happy birthday Social Security - but no COLA gift for seniors in 2016

Happy 80th birthday, Social Security! President Roosevelt signed the groundbreaking program into law on August 14, 1935. While celebrating the profound improvement the program has made in the lives of millions of older Americans, there is one piece of not-so-great news just ahead: It looks like there will be no COLA increase next year. The final announcement will be made in October, but unless there is a dramatic uptick in the Consumer Price Index soon, seniors' checks will remain unchanged next year.


Some argue that tying Social Security increases to the Consumer Price Index shortchanges beneficiaries. Among them is U.S. Rep. Alan Grayson of Florida. He contends that the CPI factors in prices for goods such as gasoline that don't have that much of an impact on most seniors. Instead, Grayson wants Social Security to base cost-of-living increases on the Consumer Price Index for the Elderly (CPI-E), a statistic that puts greater weight on items such as health care that figure more importantly in seniors' lives.

Of course, this is not Social Security's only problem. With an election months away, the system is under more intense scrutiny than usual. Nearly 10,000 Americans turn 65 every day. With fewer workers to keep the system solvent, and retirees living longer than President Roosevelt could have imagined back in 1935, the system is under immense strain. Its problems will be resolved. They must be. The real question is, how?

Part B Deductible Coverage to end as part of new "doc fix" legislation

The so-called Medicare "doc fix" (officially the Medicare Access and CHIP Reauthorization Act of 2015) was signed into law by President Obama on April 16. A rare instance of congressional bipartisanship, it replaces the 1997 law that caps Medicare payments to physicians. Each year since 1997, that law sent Congress scrambling to prevent doctors' reimbursements from being slashed. Under the new law, payments to participating doctors will increase by .5% each year, through 2019. The projected cost over the next 10 years is $200 billion.

Not surprisingly, some of that cost - about $70 billion - will come from seniors' pockets. Here's what you can expect: 

If you sign up for Medicare starting in 2020, you will no longer be able to get a Medigap policy offering coverage of the Medicare Part B deductible (the current deductible is $147). Those who are currently covered by Medigap policies, and new enrollees up to the year 2020, will not be affected. Proponents of the legislation argue that this provision will save the government money by providing seniors with a financial incentive to seek outpatient care only when it is truly medically necessary. Critics claim that seniors will put off getting needed care, costing Medicare more money in the long run. 

If your adjusted gross income exceeds certain limits, you will also have to pay higher Part B premiums.  Starting in 2018, if you have a modified adjusted gross income between  $133,000 and $160,000 you will be required to pay 65% of Part B premiums (current payment is 50%). If your income is between $160,000 and $214,000, you will pay 80% of the Part B premium (current payment is 65%).

Read more about the law and how it will affect Medicare beneficiaries here and here.

By the way, the doc fix law also fixes something else, and it's good news for everyone concerned about identity theft: Social Security numbers will no longer be displayed on Medicare cards. We do not know the exact date new cards will be issued, but the date must be within four years of the passage of the law (in other words, by April 16, 2019). New Medicare beneficiaries will receive cards that don't display the number, and current beneficiaries will be issued updated cards.

Personal service contracts needed for paid family caregivers so that Medicaid eligibility not jeopardized

A recent article in US News and World Report, Five Ways to Ease the Financial Strain of Caregiving, notes that 43 million Americans provide some form of caregiving  to a person over age 50. The challenges that accompany caregiving are not limited to the emotional and physical; they are often financial, too.  For example, a child may be forced to trim work hours to attend to a parent, or leave the workforce entirely. The reduced income can impact a caregiver's immediate finances, as well as his/her ability to save for retirement. 

It is no surprise, then, that increasing numbers of parents are actually paying their adult children for help. Payment can help cushion a child's financial losses. However, in order to avoid jeopardizing the parent's future eligibility for Medicaid benefits for long-term care, payments must be well documented through a formal personal services agreement. A personal services contract must be structured carefully, conform to Florida Medicaid law, and have complete integrity. The caregiver must actually furnish the specified number of hours and scope of help as required by the contract. The caregiver must declare the income on his income tax return. Self-employment tax must also be paid. 

The recent case of Widley David v. Louisiana Department of Health and Hospitals is instructive. Widley David was unmarried and had no children. He entered a nursing home in 2008. For the following three years his nephew and his nephew's wife provided him with substantial assistance, driving him to doctor's appointments, visiting daily, paying his bills, and purchasing food, clothing and other items for him. The assistance was so extensive that the nephew quit his job to better attend to his uncle's needs. To compensate him, Mr. David wrote six checks to his nephew over the three-year period, for a total of $49,100.  However, no formal personal services agreement was ever established.

When Mr. Widley applied for Medicaid benefits in 2010, Medicaid deemed the payments to the nephew to be gifts, i.e., transfers for less than fair market value. The case went to court and eventually, Medicaid prevailed. A penalty period of fourteen months was imposed on Mr. Widley, during which time he was ineligible for benefits.

Would-be caregivers should also consider how their own Social Security benefits may be impacted if they receive payment for their assistance. For instance, I was consulted last year by a 51-year-old woman and her elderly father, who asked me about drawing up a personal services contract. They were surprised when I advised them that her Social Security Disability income would be lost if her father paid her. More recently, I spoke with a 62-year-old woman who was contemplating retiring from her job to care full-time for her frail mother. She thought it would be the perfect answer for both of them - until I pointed out that for  every two dollars over $15,720 (the 2015 cap) she would earn from caring for her mother, she would lose $1 in Social Security income. (If you have attained full retirement age, there is no limit on your earnings, however.)
 
Paying a relative for caregiving can ease the financial burden on the caregiver as well as provide the best possible care for a loved one. However, these arrangements always require careful planning and a thorough consideration of all the ramifications. Contact our law office for assistance. 

Do you need to give your doctors your Social Security number?

Anthem, the nation's second largest health insurance company, was recently hacked. Cyber-thiefs got away with millions of Social Security numbers, employment information and other personal data. Anthem is the umbrella for insurers including Blue Cross/Blue Shield, Amerigroup and Healthlink. 

Every day, with every new corporate data breach, there is more reason to be genuinely concerned about the integrity of our personal data. Most troubling of all is the theft of Social Security numbers, for they are truly the "key to the kingdom" for anyone who wants to steal your identity.

How ironic, then, that doctors' offices and other health care providers still routinely ask patients to supply their Social Security numbers. HIPAA (the Health Information Portability and Accountability Act) sets forth protocols that providers must follow to protect patient privacy, and most offices adhere zealously to those rules. In fact, I always include a HIPAA waiver in certain documents because without it, an individual's authorized agents can hit a brick wall if they need to get the client's medical information from health care providers.

Why then do so many doctors and other providers still ask for your Social Security number? According to a recent article in Consumer Reports, there's no logical reason. Consumers advises that you don't give it out. If your health care provider pressures you to do so, politely inform the office that you will do so only if there is a compelling legal reason it is needed.

Of course, if you are a Medicare recipient, you don't have that option, since your Medicare number IS your Social Security number. Your health insurer, too, has a right to the number, since it must be reported to the federal government in order to combat fraud and duplicate payments.

Let's hope that as the months and years roll on, security controls start keeping pace with our ever-expanding technologies. Until then, you cannot be too careful. 

Retirees with student debt: Social Security benefits may be compromised

It's no secret: There's a student debt crisis in this country. But who imagined that student debt is a growing problem for the senior population?

While few households headed by individuals 65 or older carry student loans, there has been a dramatic uptick in the amount of student debt held by seniors overall, skyrocketing from $2.8 billion in 2005 to to $18.2 billion in 2013, according to a recent report from the General Accounting Office. (You can read the full GAO report here.)

While carrying student debt into retirement is obviously undesirable, the bigger sticking point is the default rate, which is far higher for seniors than for their younger counterparts. According to the GAO, the default rate for those ages 25 to 49 is 12%; among those ages 65 to 74, 27%; and for those 75 and up, 51%. Unlike other forms of debt, student loan debt usually cannot be discharged in bankruptcy. Aggravating the situation even more, the law permits Social Security benefits to be garnished to repay student debt. According to the Treasury Department, in 2013 152,000 Social Security beneficiaries had their checks garnished to repay defaulted student debt, triple the number in 2006.

How did these seniors get into this situation? The GAO study reveals that 80% of those loans were originated to fund the borrower's education, perhaps to get a college or advanced degree, or to obtain retraining. Those hoped-for jobs may not have panned out, or ill health may have reduced borrowers' ability to repay the loan. The other 20% were incurred to cover educational expenses for the borrower's children or other dependents. And given the tenuous economy, children for whom loans were taken out are not always able to repay their parents.

It's hard enough to recoup financially when you are young. In retirement or approaching retirement, second chances are harder if not impossible to come by. States the GAO: "As the baby boomers continue to move into retirement, the number of older Americans with defaulted loans will only continue to increase. This creates the potential for an unpleasant surprise for some, as their benefits are offset and they face the possibility of a less secure retirement."

There's not much seniors can do if they are stuck with old student loans. But if you are getting on in years, think long and hard before borrowing money for your or your children's education. Student debt can quite literally haunt you forever, and even reduce the Social Security benefits you may be depending on to help finance your golden years.

Paper Social Security benefits statements make partial comeback

As a budget saving measure, the Social Security Administration ceased mailing paper benefits statements in 2011. The statements provide updated projections about benefits based on a worker's earnings, and age at which benefits are claimed. If you have signed up to view your statements online as the agency suggested, you are among just 6% of workers who did.  Analysts believe that among those who did not, a high percentage lack internet access. Ironically, these are the people for whom Social Security will likely be the most important source of retirement income, and therefore, are the people most in need of the information about future benefits.

To fix this information gap, the Social Security Administration will resume mailing paper benefits statements to individuals who are not signed up for internet access. Statements will not be annual as in the past, but will be mailed every 5 years. If you have not signed up to view your statements online, you will receive paper statements at age 25, 30, 35, 40, 50, 55 and 60.

Still, it is more convenient, and certainly kinder to the environment, to view your statements online. To sign up, click here.

Social Security Compassionate Allowance list expanded

Early-onset Alzheimer's Disease is just one of several hundred conditions that the Social Security Administration includes in its "Compassionate Allowances" list. If an applicant for Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) suffers from one of the conditions on this list, the Social Security Administration says it will process the application in weeks, not the months or even years a typical application may require. Obviously it can be enormously helpful to the applicant, the family and caregivers to get funds sooner rather than later.

Social Security Disability Insurance (SSDI) is designed to assist those who have paid into the Social Security Trust Fund during their working lives. Supplemental Security Income (SSI) is for those age 65 or older, or blind or disabled persons of any age who have limited income and resources. 

Recently the Social Security Administration expanded its Compassionate Allowance list to include several additional conditions. For a full list, check out the SSA website.

Veterans: Free access to Social Security benefits analysis on Veterans Day

The youngest wave of Vietnam veterans is now approaching Social Security age. On Veterans Day, to assist these and other military veterans determine the best time to start taking Social Security benefits, Kiplingers is offering veterans free access to its online Social Security benefits analysis tool. Kiplingers and Well Fargo are co-sponsoring the one-day offer, which is also free to active and retired veterans and their widows and widowers.

Determining when to take Social Security benefits can be befuddling. When you start collecting, whether you continue working, whether you are married and when your spouse begins collecting, all impact on how much you can collect. In addition, having been on active duty for certain periods can provide additional benefits. This and other information will be available at the Kiplingers site, and the information is sorely needed: according to one recent study, most veterans are not aware of the differential in benefits that occurs when collecting early rather than waiting. The vast majority begin collecting at the earliest possible age, 62.

To use the Kiplingers online tool, you must have your estimated Social Security benefits at full retirement age. You can find this on your account statement, or get the statement at the government's official Social Security site. Then log on to the Kiplingers veterans site and enter the requested information. After you run through the numbers, you can download your analysis benefits report (which usually costs $49.95).

For information about other kinds of benefits available for elderly or disabled veterans, and to access our law firm's booklet on V.A. pension benefits, click here. 

Florida residents: how the Defense of Marriage Act ruling may affect you and your loved ones

The Supreme Court last week struck down the 1996 federal Defense of Marriage Act, which defined marriage as a union solely between a man and a woman. The 5-4 ruling found DOMA unconstitutional because it denied same-sex couples equal protection under the Fifth Amendment of the U.S. Constitution. The ruling means that same-sex legally married couples should be entitled to all the same rights and benefits under federal law as opposite-sex married couples. That's 1000+ rights and benefits. 

For couples who were married in and reside in the District of Columbia or one of the twelve states that currently recognize gay marriage, the situation is a clear-cut and positive development. The situation is less clear for same-sex couples who reside in Florida and have been legally married in another state, because Florida does not recognize the legality of same-sex unions. The Florida Constitution, as amended, bans same-sex marriage and expressly does not recognize same-sex marriages from other jurisdictions.

In this post I clarify what we now know, and still have yet to learn, about the impact of DOMA's reversal on same-sex couples residing in Florida who have been married elsewhere, with emphasis on estate planning, life planning and long-term care planning issues. I also point out how the Supreme Court ruling may affect anyone planning his/her estate who wishes to include a beneficiary who is in a same-sex marriage ,regardless of where that beneficiary resides.

Federal Benefits for Same-Sex Married Couples

Some legal experts have questioned whether spouses in same-sex marriages living in states like Florida will be eligible for all the federal benefits and rights accorded to straight married couples, notwithstanding DOMA's reversal. One early signal that they probably will: Just 48 hours after the Supreme Court ruling was issued, the U.S. Immigration and Citizenship Services Agency awarded a green card to Bulgarian immigrant Train Popov, a man, who had been married in New York to another man, American Julian Marsh. The couple lives in Miami. Based on this development, one can reasonably presume that other federal agencies will fall into line, and that same-sex married couples living in Florida will have access to the full range of federal benefits that provide preferential treatment for spouses.

That said, it is important to point out that different federal agencies use different standards to identify who is or isn't married. Some agencies, including the Social Security Administration, Internal Revenue Service and Veterans Administration have historically used place of residence as the criterion, meaning that they consider a couple to be married only if their domicile considers them married.  From that point of view, a same-sex couple who has been married in, say, Vermont and who now resides in Florida, would not be considered married. Obviously this is a grey area of the law that has yet to be resolved.

Assuming for the moment that all federal benefits will apply to same-sex married couples regardless of where they live, the federal benefits they will receive include:

• Federal estate tax breaks:  Unlimited marital deduction when one spouse passes his/her estate to the survivor. (Prior to the DOMA ruling, any amount in excess of $5.25 million passed to your partner was subject to federal estate tax.) A surviving same-sex spouse may also use any unused portion of the deceased spouse's exemption (portability).

• Social Security advantages: Like their heterosexual counterparts, a surviving spouse in a legal same-sex union may opt to collect the decedent's Social Security benefits if those benefits are greater than what the survivor is currently receiving. Also, while both spouses are alive and collecting Social Security, the lesser-earning spouse can elect to receive 50% of the higher-earning spouse's benefit.

• V.A. Benefits: All the benefits that heterosexual married couples have enjoyed are now available to same-sex marrieds. For example, if the spouse is entitled to pension with aid and attendance, the survivor will also be entitled to those benefits, provided of course that he/she meets all other criteria. 

• 401-ks:  Under federal law, the spouse is the automatic beneficiary. Therefore, if you are legally married in a state that recognizes same-sex marriage, your spouse will automatically be your beneficiary (whether you like it or not). 

• Individual Retirement Accounts: A deceased spouse's Individual Retirement Account can now roll over into the survivor's account without being taxed, and the survivor may take minimum required distributions based on his/her own life expectancy, and then let the ultimate beneficiary stretch it out.

• Medicare: All the spousal privileges and benefits that apply to opposite-sex married couples are now available to same-sex marrieds. Spouses of Medicare recipients can enroll in the program even if they lack the requisite work history. 

• Income taxes: Same-sex married couples may now file joint returns, which is generally advantageous.

 

What has NOT changed at the Florida state level for same-sex married couples

 
As noted above, nothing has changed at the state level, at least for now. Florida laws affording preferential status to married couples do not apply to same-sex married couples, despite the marriage being recognized as legal in a different state. Among the Florida benefits still NOT available to same sex marrieds are:

• The right to an elective share of the spouse's estate.
• The right to a life estate in your spouse's homestead, or one-half ownership in that property.
• Consideration as the natural health care proxy for your spouse, second only to a court-ordered guardian.
• Same-sex spouses may not hold assets as tenants by the entireties, which heterosexual couples may do and which provides creditor protections.
• If a same-sex spouse dies intestate, the survivor is entitled to nothing. Married opposite-sex survivors are entitled to 50% of the estate if there are children from the decedent's prior marriage, or 100% if the decedent has no children from a prior relationship.

At this juncture, it may be wise for committed same sex couples who reside in Florida to consider being married in a state that recognizes same-sex unions. Although it obviously will not change the nature of the relationship from the point of view of Florida law, the spouses will at least be considered married for federal benefits purposes.

If you are in a same-sex marriage recognized in another state, but you are domiciled in Florida, you must take particular care with your planning to ensure that you and your spouse are protected, since the state provides you none of the protections available to same-sex married couples. Contact our offices for the expert advice required for your situation.

A grey area: Long-term care Medicaid benefits for same-sex married couples

Florida Medicaid regulations are a compilation of both federal and state statutes. Therefore it is unclear as to how the DOMA ruling will play out for Florida same-sex couples who are legally married in other jurisdictions and who wish to do Medicaid planning to protect themselves and one another from the cost of long-term care. Two tools commonly used by elder law practitioners in Medicaid planning, spousal refusal and unlimited interspousal transfers, may not be available in Florida to such couples.Only in the fullness of time will we know how these issues will be resolved by the courts. Meanwhile, our experienced Florida elder law attorneys can give you the most accurate and up-to-date advice.

Estate planning if one or more of your beneficiaries are in same-sex marriages

The Supreme Court ruling opens up sticky problems for those planning their estates and whose intended beneficiary (or beneficiaries) is in a same-sex marriage. 

For example, suppose you are a Florida resident and your daughter Ann resides in Massachusetts, where she was married to her spouse, Susan. If Ann predeceases Susan, do you or do you not want Susan to get Ann's share? If your will identifies Ann's "spouse" as the contingent beneficiary, will the Florida Probate Court recognize the validity of that language and allow Susan to receive the bequest - and is that what you desire? If it is, in my view it would be better to omit the word "spouse" and instead identify Susan by name.

Powers of appointment create another area of uncertainty. Sometime a client who wants to leave money to someone in a trust does so with a general power of appointment; meaning the beneficiary is permitted to leave the funds to anyone the beneficiary chooses. In other instances, someone will leave funds under a limited power of appointment, restricting to whom the beneficiary may leave the funds, generally that beneficiary's "spouse and lineal descendants." As you can imagine, DOMA's reversal opens up a legal can of worms with respect to limited powers of appointment. Can you now put restrictions in your limited power of attorney restricting the gender of the beneficiary's spouse? If your limited power of appointment states that your son can only leave his share to his "wife," does that disqualify a same-sex spouse, and is that what you want?  Our highly experienced estate planning attorneys can anticipate these potential problems and draft your estate planning documents in a way that ensures your wishes are carried out in this new legal world.
 
In conclusion, we can look forward to many test cases, lawsuits and rulings on all of these matters over the coming months and yes, even years. Check our website and this blog to keep up with these developments and what they may mean for you and your loved ones.

To read the Supreme Court decision, click here. 

Bill would remove barriers preventing mentally competent disabled individual from establishing special needs trust

New federal legislation, if passed, will eliminate the barrier that currently prevents disabled but mentally competent people from setting up their own Special Needs Trusts (aka Supplemental Needs Trusts). 

Right now, under Title XIX of the Social Security Act, only a parent, grandparent, guardian, or the court may set up a first-party special needs trust for a disabled individual, even if the individual is an adult and mentally competent. This requirement imposes an unnecessary burden on a disabled individual whose parents and grandparents may no longer be alive or who are unwilling or unable to assist. It also creates unnecessary additional work for our already overburdened court system. Says National Academy of Elder Law Attorneys President Gregory French of the current law: "It is wasteful, unfair, and wrong for the laws to prohibit individuals who have mental capacity from creating their own special needs trust just because they have a physical disability."

House Bill 2123, the Special Needs Trust Fairness Act of 2013 introduced by U.S. Rep.Glenn Thompson (R-Pennsylvania) and US.Rep.Frank Pallone (D-New Jersey), would amend the current law to enable a mentally competent beneficiary to independently create and fund his/her own special needs trust. 

A Special Needs Trust is an instrument that holds funds for a disabled beneficiary. Funds are not directly available to the beneficiary, but are released to the beneficiary for services that do not replace, but rather supplement, the services provided through Medicaid or Supplemental Security Income (SSI). This permits the beneficiary to to remain below the required maximum asset level, retaining eligibility for vital public benefits. 

 The bill has not yet been voted on in the House. You can track its progress here. 

March 1 is your deadline to apply for Social Security direct deposit!

Social Security going paperless:

On March 1 the Social Security Administration will no longer send  checks by mail. If you are one of the 7% of Social Security recipients who still receive paper checks, you have just a few days left to sign up for electronic payment. Sure, change is difficult for many of us, but electronic payment is actually a lot more secure. Plus, you'll be helping bring down the deficit: The Treasury Department estimates the switch will save taxpayers $1 billion over the next decade. To sign up for your electronic payment, go to www.godirect.org. There are just a few situations in which the Treasury Department will continue to send paper checks:

• If you were born on or before May 21, 1921.
• If you reside in a very rural area without ready access to your bank.
• Those with mental impairments making electronic payments a hardship.

 Request a waiver by calling 800-333-1795.

Changes to earnings limits, too:

Social Security has also changed the earnings limits for beneficiaries:

• If you are between age 62 and 65, for the year 2013 you can earn up to $15,120 (up from $14,640). For every $2 of earnings over the income limit, $1 will be deducted from your benefits.
• If you turn 66 in 2013, you can earn up to $40,080 (Up from $38.880). For every $3 of earnings over the income limit, $1 will be deducted from your benefits.
• At age 66 and older, there is no longer an earnings limit.

When to collect Social Security is a number-crunching challenge for millions of people these days. The longer you wait, the bigger your future benefits, but there are numerous other factors to consider too, including your spouse's age, whether you and your spouse are still working, your health, whether you have additional sources of income,  tax ramifications, anticipated longevity and much more. Help is available at the  Social Security website. Another online tool is the AARP's benefit calculator. 

U.S. Supreme Court cites Florida inheritance law in unusual case

The U.S. Supreme Court recently handed down its decision in the case of Astrue v. Capato. The circumstances of the case are ones most of us will never experience. Nonetheless, the case has lessons for everyone. It underscores the importance of creating a precisely worded estate plan that takes all contingencies into account, and keeping it regularly updated.

When Florida resident Robert Capato was diagnosed with esophogeal cancer, he and his wife Karen were concerned that chemotherapy might leave him sterile. He had his sperm frozen for possible future use. Although Capato went on to father a child with his wife, he died in 2002. Karen then underwent in-vitro fertilization while living in Florida, using her late husband's stored sperm. She moved to New Jersey during the pregnancy, and gave birth to twins 18 months after Robert's death.

The Capatos had signed a notarized document stating that "Any children born to us, who were conceived by the use of our embryos, shall in all respects and for purposes, including but not limited to descent of property, be children of our bodies." However, Robert Capato's will, signed in Florida, did not make mention of any children who might be born subsequent to his death. The only beneficiaries mentioned in his will are his wife Karen; the child they conceived when he was alive; and his children from a prior marriage. And therein is the problem: According to Florida law, children conceived after a parent's death cannot inherit from the parent, unless they are referred to in the parent's Will.

The Supreme Court got involved because Karen attempted to claim Social Security Survivor Benefits for the twins. Social Security turned down the application, stating the father had to have been alive when the children were conceived. A federal judge agreed. The case then went to the Circuit Court of Appeals, which reversed the decision, and found its way to the Supreme Court. The Justices ruled unanimously that the twins are not eligible for survivor benefits because the federal government - i.e, the Social Security Administration - must base its decisions upon each state's own inheritance laws. Even though Karen actually gave birth to the twins in New Jersey, they were conceived in Florida, and thus, Florida intestacy laws apply. Wrote Justice Ginsburg: "The law Congress enacted calls for resolution of Karen Capato's application for child's insurance benefits by reference to state intestacy law."

This is highly unusual case, to be sure. Still, all of us can learn from it. Consult with an experienced Elder Law/Estate Planning attorney when drafting your estate plan.

You can read the Supreme Court decision here.