Category Archives: Estate Planning

Estate Planning Facts. Last Will and Testaments versus Living Trusts. Estate Taxes. Gift Taxes. Inherited IRAs. Guardians for minor children. Pet Trusts. Funeral Agents. Avoiding Probate. Get Your Affairs In Order.

Have you collected the Social Security benefits to which you may be entitled?

You worked hard your whole life and paid money into the Social Security program evey month. So did your spouse. And now that you are both retired, you are relaxing, enjoying life and collecting a benefit check every month.

But Social Security benefits are not just for retirement. They are for widows and widowers, too. That’s right. Some of the money you paid into Social Security during your working life goes to survivor’s insurance from which you may one day be entitled to collect benefits. The amount of those benefits is based on lifetime earnings.

It is important to know that the surviving spouse is not the only one who can collect benefits. Surviving minor or disabled children are eligible as well.

Diesmart has received questions from widows and widowers who want to be sure they have collected all of the pension benefits to which they are entitled. However, they usually either forget or don’t know that they are leaving money on the table when they don’t file for Social Security survivor benefits as well.

Don’t forget to contact the Social Security administration to find out what steps you need to take to collect benefits to which you are entitled. www.ssa.gov/survivorplan/ifyou.htm

For more information about death benefits, go to www.diesmart.com.

Do your frequent flier miles live on after you’re gone?

The New York Times recently did research to find out and the answer was far from consistent.

Only two airlines contacted have a specific, written policy that allows your miles to be transferred to a surviving family member – American and US Air. On the American Airlines site, in the section titled “Earning AAdvantage Miles”, they outline their specific policy. US Air states their policy under General Terms and Conditions.

One airline, JetBlue, said that they don’t have a specific policy but, after receiving a death certificate and other documentation, will transfer the miles to a beneficiary.

Southwest Airlines has a specific policy – it does not allow transfer of any miles after the death of a RapidRewards member.

Delta’s policy is to not transfer miles. However, upon request of a SkyMiles member’s surviving family member, they may make an exception and move the miles to their account.

United also said their policy is that miles are not transferable upon death. However, MileagePlus evidently has a form that can be completed to request transfer of miles from a deceased member’s account to that of a beneficiary. Along with the completed form, a copy of the death certificate and a $75 fee must be submitted.

If you have a lot of unused frequent flier miles, you might want to specifically bequeath them in your will. However, the airline holding them is still not legally required to give them to the beneficiary of it is against their company policy.

What’s the easiest thing to do? Make sure your frequent flier miles are on an airline that will allow your family to inherit them or start travelling more now, using up that bank of valuable miles while you can.

For more information about what happens to your assets when you’re no longer around, go to www.diesmart.com.

Does a loan live on after death?

Although the person is dead, the loan may live on for years…or until it’s paid off. In some instances, death cancels the loan but this is rare. In some states, the next of kin doesn’t just inherit the estate. He inherits the debt as well and is required to pay the debt.

If someone cosigned the loan with the deceased, that person is responsible for the debt. Some loans, such as federal student loans, contain a clause that cancels the loan in the event of the death of the person who signed it.

Private lenders vary on their policies so heirs will have to check the note carefully to find out whether their liable for the debt.

If the loan has been secured with real property, it must always be repaid. Either the bank will repossess the property to cover payment or whoever has inherited that real property will have to pay off the note.

Sometimes banks or other financial institutions will give the cosigner or other family member a few months to decide how to pay off the loan so it’s important to speak with a financial officer quickly so a solution can be discussed.

If the original borrower purchased credit life insurance which pays off the loan in the event of death, there is no problem. The heirs get to keep their inherited property and the loan is paid.

Be sure you know the terms of any loan you take out and what the impact of this loan may be on your heirs if you die before it’s been paid off. Otherwise, you may be leaving your heirs with an unwelcome inheritance – a debt.

Don’t Pay an Inheritance Tax on Your Own Money!

If you live in Indiana, Iowa, Kentucky, Maryland, Nebraska, New Jersey or Pennsylvania beware. These states tax your inheritance, no matter what the amount is.

Barry and Susan Brown of Philadelphia, PA learned this the hard way. Because they were getting older, they decided to add their son’s name to their bank accounts. They decided this would be the easiest way to enable him to access their funds in case of a health emergency.
Unfortunately, their son died before they did. Shortly thereafter, they received a tax bill for several thousand dollars. Why? Under Pennsylvania law, one third of the money in their accounts was considered to be their son’s. Since, according to the law, they had inherited it, they owed 4.5 percent as tax. Their son had none of his own money in the accounts, but that didn’t matter. They had to pay the tax.

This problem could have very easily been avoided. Instead of putting their son’s name on their bank accounts, they should have prepared a financial power of attorney document. In this document, they could have given their son the right to access their money and make financial decisions on their behalf when they were unable to do so. This method would have allowed them to keep all of their money instead of giving some of it away to the government needlessly.

For helpful information about how to plan for incapacity and death, go to www.diesmart.com.

Planning a Pet’s Funeral

Many people complain about funeral costs when they are deciding what to do about dear deceased granddad or mom; they think costs are too high and ask for cheaper options. But when it comes to a beloved pet, no one complains about what it costs to bury or cremate it. Cost is rarely even discussed. Rather the pet owner decides what he or she wants and then just pays for it.

National Pet Memorial Day was celebrated in September. According to the International Association of Pet Cemeteries and Crematories,  it was a day to “increase awareness of the many options available to memorialize pets”. Less than ten years ago, pet aftercare facilities were almost nonexistent. People just didn’t talk about what to do with their deceased pet. Today, there are more than 700 pet aftercare facilities nationwide and the number is growing. According to Tom Flynn, president of Hillerest-Flynn Pet Funeral Home and Crematory in Hermitage, PA, it’s a rapidly growing business. His profits have increased by 25% every year since he began offering pet burials in 2006.

Nobody really knows what demographic is responsible for the industry boom. Some think it’s baby boomers, who turn to a pet after their spouse has died or their children have left home. Others think it’s people in their 20’s and 30’s who have delayed or opted out of becoming parents and have decided to get a pet instead. Still others think it’s older women who never had children. Or the very wealthy. But, in actuality, Ed Martin, Jr. of Hartsdale, NY Pet Cemetery and Crematory, says they “get everybody: men, women, rich, poor, young, old.”

A pet funeral can be expensive, with a bronze grave marker costing almost $1,800 and a velvet-lined casket in excess of $1,100. Did you know that in addition to pet burials and cremations, you can arrange things like pet blessings and candlelight vigils? Some companies offer even more services than you’d find at a human funeral home.

In addition, there are unconventional options as well. Although it sounds very weird, some people opt for freeze-drying their pet’s body which can cost as much as $3,000. And a company in Elk Grove Village, IL called LifeGem, has a process that uses carbonized ashes from cremated remains to create synthetic diamonds. Prices run from $2,490 to $25,000. The process originally was intended for humans but pet owners started requesting the service for their pets so frequently that it’s now 25% of LifeGem’s business.

If you’re looking for unusual ideas, a place to start might be Peternity, an online store like Target, but for pet grieving.

Whatever you decide when planning what to do with your deceased pet, be like everyone else. Don’t think about price. Just decide what you want and pay whatever it costs.