FLORIDA ESTATE PLANNING AND PROBATE LAW BLOG

The Florida Estate Planning and Probate Law Blog is focused on recent federal and state case law and planning ideas.

DO NOT FORGET TO COLLECT YOUR SOCIAL SECURITY SURVIVOR BENEFITS

♠ Posted by Marc J. Soss in ,,,,,,,,

There are few upsides (maybe relief from pain and suffering) to the death of a spouse. In order to ease the burden, the U.S. government offers a few Social Security survivor benefits.



Survivor Benefits: The main benefit for a surviving spouse is that they may be able to receive Social Security payments if their deceased spouse met the requirements to qualify for Social Security retirement benefits. If both spouses are collecting Social Security benefits, the surviving spouse will only receive the larger benefit. 



Others eligible for benefits include: spouse of the deceased, aged 60 or older; spouse of the deceased, aged 50 or older, if disabled; spouse of the deceased at any age, if he or she is caring for the deceased's child who is younger than 16 or disabled; an unmarried child of the deceased who is younger than 18, or younger than 20 if still a full-time student in elementary or secondary school or 18 or older and with a disability that began before age 22; a stepchild, grandchild, step-grandchild, or adopted child under certain circumstances; parents aged 62 or older, who were dependent on the deceased for at least half of their support; and a surviving divorced spouse, under certain circumstances.





Death Benefit:  In addition to the benefits described above, a surviving spouse may be eligible for a one-time payment of $255.  Eligibility for the benefit requires the surviving spouse to have been living with the deceased spouse, at their date of death, or, if living apart, to have been receiving benefits based on the deceased spouse's Social Security record.







How to Claim Social Security Survivor Benefits: In order to claim Social Security survivor benefits you must inform the agency of the death of your spouse. Typically, the funeral home will notify the Social Security Administration with regard to the deceased.  In order to contact the Social Security Administration you must either visit your local Social Security office or speak with the agency on the phone (at 800-772-1213). hen speaking with them it is important to also inquire about: (i) survivor benefits; (ii) retirement benefits; and (iii) eligibility for the one-time $255 lump-sum benefit.
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CHARITABLE PLANNING WITH YOUR RETIREMENT ACCOUNT

♠ Posted by Marc J. Soss in ,,,,,,


 
 
For the past several years, Congress has employed a last minute temporary rule that allowed IRA owners to exclude their required minimum distributions (RMDs), from their adjusted gross income, by making a direct contribution of the funds to a qualified charitable organization. However, this last minute action made planning difficult for taxpayers. Finally, in December 2015, the Qualified Charitable Deduction (“QCD”) provision became a permanent part of the U.S. Tax Code.  This allows taxpayers to comfortably utilize the provision and establish long-term planning strategies around it moving forward.
 

Eligibility and Advantages:

Any IRA owner or beneficiary who is at least 70.5 years old, no exceptions, can use the QCD rule to donate their required minimum distribution or up to $100,000 per year to charity and exempt the funds from taxation. All contributions and earnings inside the IRA are QCD eligible but are classified as a nondeductible contribution. Taxpayers may not utilize a joint gifting strategy for the purpose of QCDs. 

The biggest benefit of utilizing the QCD provision is the ability for a taxpayer to lower their adjusted gross income, since the gifted funds do not count as taxable income to them. This can allow a taxpayer to stay in a lower income tax bracket, reduce or eliminate the taxation of Social Security or other income and remain eligible for deductions and credits that might be lost if the taxpayer had to declare the RMD amount as income. Another advantage is the taxpayer will not have to itemize deductions in order to qualify for this deduction (since the exclusion applies to adjusted gross income and not taxable income).

Rules

In order for the donation to qualify under the QCD rules it must be made directly to the charity. The IRA owner or beneficiary can personally receive the check and deliver it to the charity, but they cannot deposit the funds and then make out a check to the charity. The recipient charity must also be a qualified 501(c)3 organization and a charitable gift annuity will not qualify. The charitable donation amount must be substantiated by the charity with a written receipt.
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