If you have elderly parents, there are likely three generations in your family that all need estate planning: you, your parents, and your adult children. For those with elderly parents, there are important estate planning considerations:

• Your elderly parents may fear losing control of their finances and their lives. Proceed with caution and great respect.

• Your elderly parents may fear the onslaught of dementia. Gently support them in getting medical treatment and having open and honest discussions with the doctor.

• Sometimes, elderly parents attempt to hide symptoms of dementia because they are afraid and/or ashamed. Never shame. Always support.

• Elderly parents often deal with depression especially if they have failing health, the loss of a spouse, the loss of friends and siblings, and the loss of independence. Depression can be treated with medication. There is no reason anyone should suffer.

• Many elderly parents should not be driving, but they are hesitant to give up their driver’s license because it is the last line of defense in losing their independence. If your parents have a HIPAA release and your are authorized to do so, speak with your parents’ doctors about the driving issue.

• Talk to your elderly parents about estate planning. Gently ask what planning is already in place. If comprehensive and up to date planning is not in place, suggest that they meet with an estate planning attorney and offer to make the arrangements and drive them.

• Gently explain that if your parents don’t have powers of attorney for health care, you can’t help them with medical decisions and a court might have to intervene.

• Gently explain that if your parents don’t have powers of attorney for finances, you can’t help them with paying bills and taking care of day to day business. If they become too ill to take care of these matters themselves, the court will have to intervene.

• Court intervention is expensive, time consuming, an invasion of privacy, and public.

If you have questions about elderly parent estate planning considerations, consult with an estate planning attorney.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Social Security is a social insurance program that is funded by an individual’s payroll taxes known as FICA (Federal Insurance Contributions Act). What many don’t realize about social security is that it actually is made up several programs that fall under this ‘umbrella’. The most widely known social security programs are:

• Federal Old-Age, Survivors, and Disability Insurance;
• Medicare, which is the health insurance for aged and disabled;
• Medicaid, the grants for states to fund medical assistance programs; and
• Supplemental Security Income (SSI).

Social security for senior citizens is known as Old Age, Survivors and Disability Insurance, or OASDI, which pays retirement benefits from the funds collected from the individual’s FICA taxes. The amount of the monthly benefit that is paid to a retired worker depends upon that earnings record and the age they begin to receive benefits. If a worker covered by Social Security dies, a surviving spouse can receive survivors’ benefits, as can minor children.

While the basics of the Social Security program seems simple enough, like many government programs, the rules and regulations can be complex and difficult to understand. Some of the most frequently asked questions regarding social security benefits are:

How does Social Security decide how much I’ll get in retirement benefits?

The amount of social security benefits depends on your lifetime earnings as well as your age when you begin to collect benefits. The longer you wait to receive payments, the higher your benefit amount will be.

How much can I expect in Social Security benefits when I retire?

The Social Security Administration records your earnings in a database and tracks them with your social security number. They normally mail statements annually that provide an estimate of the benefits you will receive upon retirement. It’s a critical part of retirement and estate planning, so if you do not have a statement, contact the Social Security Administration to request one.

What is the best age to begin collecting retirement benefits?

Your full retirement age is 65 or 67, depending on your year of birth. The longer you wait to claim benefits, the higher the payment. But it’s not always the best choice to wait until full retirement age to claim benefits, particularly if they are needed to meet monthly living expenses or you are experiencing health issues.

There are so many variables, that it’s best to make these benefits part of a comprehensive estate and retirement plan, and consult with an experienced advisor to help make the most of social security benefits.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

Although the original purpose of Social Security payments was to provide income to the elderly after retirement, today’s Social Security benefits are also making payments to qualifying dependents, such as your spouse and children.

If you qualify for Social Security benefits after you reach the age of retirement, your dependents may also qualify for survivor benefits after you are deceased. The amount of benefits your loved ones might get will depend on if you are “insured” at the time of your death.

And we’re not talking about private life insurance.

To be considered fully insured by the Social Security Administration, you must have 40 credits; to get these credits you must have worked at least 10 years in which your income was subject to Social Security and Medicare taxes.

For those that are fully insured, the dependents eligible for survivor benefits include a spouse, divorced spouse, children, and a dependent parent. If you are currently (but not fully) insured, meaning you have at least 6 credits earned in the last 13 quarters, your spouse, children, or divorced spouse may be eligible for benefits.

• A spouse or divorced spouse can receive up to 75% of the dollar amount that the deceased was entitled to, if they are caring for the deceased children that are under the age of 16.

• The deceased children may also receive 75% of the deceased benefit amount if they are under the age of 18, disabled and under 22 years of age, or less than 19 years old and attending school.

• A widow may also receive benefits if they are age 60, or at least 50 years old and disabled.

In addition to these survivor benefits, there is also a one-time payment of $255 that is made to the spouse of the deceased after death. If there is no spouse, the payment may be made to the children of the deceased.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.

The Windfall Elimination Provision (WEP) reduces social security benefits of individuals who receive a pension from an employer that did not collect social security taxes. This provision was implemented in 1983 to end an unfair distribution of benefits available to to those collecting pensions but who had not paid into the social security system.

What is the Windfall Elimination Provision?

Before the WEP was enacted, those who worked primarily for employers that were not covered by social security (such as a government agency) had their benefits calculated as a low-wage worker, making them qualify for the higher benefit tier. But at retirement, then they received a full pension without paying social security taxes.

The WEP was designed to eliminate this advantage by decreasing the amount of benefits available to those with certain pensions.

Who is Affected by Windfall Elimination Provision?

The Windfall Elimination Provision affects only those individuals who earn their pension from a job where they did not contribute towards social security taxes. It is applicable only for those individuals who have worked in other jobs as well in order to qualify for social security retirement or disability benefits. Individuals who are affected by this provision include people who work for the federal, state or local government, non-profit organizations (NGOs) or for organizations based in other countries.

The effect of this provision depends on the number of years for which your earnings have contributed to social security provisions. If you have contributed to social security for a majority of your service, you will not be significantly affected by this provision, but a quick call to the Social Security Administration office can confirm the amount of reduction you can expect.

Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.