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‘Bye Bye Love’ Rocker Ric Ocasek Cuts Wife Out of Will

Ric Ocasek and wife Paulina
Ric Ocasek and his wife, Paulina Porizkova, filed for divorce after 28 years of marriage.

The language in the Will was very clear, according to the article “Cars singer Ric Ocasek cuts supermodel wife Paulina Porizkova out of will” from Page Six. There was no provision for his wife Paulina, since they were in the process of divorcing. He added that even if he died before their divorce was finalized, she was not to receive any elective share “… because she has abandoned me.” [Update: Porizkova is contesting Ocasek’s Will.]

It was Porizkova who found Ocasek’s body in September, while bringing him coffee as he recovered from recent surgery. The couple had two sons together and had called it quits in May 2018, after being married for 28 years. They met on set during the making of the music video for the Cars’ song “Drive.”

A filing with Ocasek’s Will stated that his assets included $5 million in copyrights, but only $100,000 in tangible personal property and $15,000 in cash. The document did not detail the copyright assets.

That may seem like a small estate for someone with Ocasek’s fame. However, an attorney who examined the document told The New York Post that it was likely the Cars’ frontman probably had more assets protected through trusts.

Like other high-profile performers who have considerable assets and who are savvy about finances, it’s possible that he has many millions of dollars. However, they will not pass through the public probate process because proper planning was done. That’s why people use trusts, especially when they’re public figures.

The Cars’ singer also seems to have left two of his six sons out of the Will. But the children he had with Porizkova were not left out of the Will.

It’s possible that the sons who were left out of the Will were compensated through other means. There may have been trusts set up for them, or perhaps life insurance proceeds.

The document indicates that Ocasek signed his Will on August 28, less than a month before his death.

Ocasek died of heart disease on September 15. He also suffered from pulmonary emphysema.

Mario Testani, his friend and business manager, is named as the executor of his Will.

Ocasek’s situation appears to show how trusts and other estate planning methods can be used to maintain an individual’s privacy, even if their other assets pass through a Will.

Reference: Page Six (Nov. 7, 2019) “Cars singer Ric Ocasek cuts supermodel wife Paulina Porizkova out of will”

Other articles you may find interesting:

What Happens to Eddie Money’s Money?

Prince’s Estate Battle Drags On

Feeling Squeezed in the Middle of a Generational Sandwich?

Generational sandwich
Today, there is a generation of middle-aged adults, known as the Sandwich Generation, who are caught between the demands of child rearing in addition to providing care to their aging parents.

Raising your kids, working, trying to take care of yourself, and now caring for an aging parent? That makes you part of the Sandwich Generation. You are not alone—almost half of America’s 40-60 year olds are in the same boat.

Most of us have adjusted to balancing children, work and finding some time for ourselves. But when we add caring for an aging parent, it often becomes too much. And usually it’s the “me” part that is sacrificed…until you hit burn out.

Here are some ways to leverage your time and resources so you can also take care of yourself.

Enlist Your Kids

Even the smallest child can spend charming one-on-one time with a grandparent. If your parent lives with or near you, they can spend time together in person. Adult children can take Grandma or Grandpa out for a meal or a movie – or spend an evening sharing a pizza and watching Netflix. If your parent is not near you, they can Skype on the computer, use FaceTime or play multi-player online games. Your children, no matter what their ages, will benefit from spending time with Grandma or Grandpa, they will see how you value and care for aging family members—and you will get some extra time to return phone calls, make dinner, or even catch a quick nap!

Ask About Options at Work

Check with your employer’s human resources department about resources that might be available to you. Depending on how long you expect to be caring for your parent, there may be a multitude of options available to you, including elder care research and referral services, flex time, even working from home options. The Family and Medical Leave Act (FMLA) calls for eligible employees to receive 12 weeks of unpaid job-protected leave. (Private employers with less than 50 employees are exempt.)

Seek Assistance

There are legal and community resources that can help you make the best care and financial decisions for your parent. A local Elder Law attorney can prepare the necessary legal documents and help you maximize your parent’s income, long-term care insurance and retirement savings, and qualify for VA or Medicaid benefits, if applicable. He/she will also be familiar with various living communities in the area and in-home care agencies. You can also hire someone to review and verify/dispute insurance claims and medical billing.

Find Your “Me” Time

As a member of the Sandwich Generation, stress is your biggest enemy and you have to find ways to reduce it. Joining a caregiver group, in person or online, will let you share your questions and frustrations, and learn how other caregivers are coping. Don’t be afraid to ask favors of friends and other relatives, such as picking up your kids while you go to the doctor with your parent. You could also learn to order in dinner every now and then without feeling guilty. Learn what you need to maintain your stamina, energy and positive outlook. That may include regular exercise (a yoga class, walk or run), a weekly outing with friends, or time to read or simply watch TV.

Other articles you may find interesting:

Are Your Estate Planning Documents Age-Appropriate? (Part 1)

Electronic Wills – Should You Have One?

Know Your Rights as LGBT Residents in Nursing Homes

LGBT seniors
Federal nursing home regulations and state and federal anti-discrimination laws protect all residents living in nursing homes, including LGBT individuals, from discrimination, harassment, and abuse.

Many people who identify as lesbian, gay, bisexual, or transgender (LGBT) report having significant fear of discrimination and mistreatment as they age. Many LGBT older adults experience violations of their rights when they try to access long-term care services and supports. Surveys have revealed concerns about discrimination by the staff and negative treatment by other residents, including verbal harassment and physical abuse. If you’re facing this situation, you need to know your rights as LGBT residents in nursing homes.

Federal nursing home regulations and state and federal anti-discrimination laws protect all residents living in nursing homes, including LGBT individuals, from discrimination, harassment, and abuse. You need to know the laws that protect you so you can take action when someone violates your rights.

If a long-term care facility receives any Medicare or Medicaid funding or has Medicare or Medicaid certification, even if no current resident receives this funding, the facility must honor the following rights. The individual resident in a care center has these rights, whether he receives Medicare or Medicaid funding or not.

  • Freedom from abuse. The facility must develop and follow policies that prohibit mistreatment of residents, including things like physical, mental, verbal, sexual, or financial abuse or neglect. The center must investigate and take action on allegations of abuse or neglect. Harassing a resident or refusing to provide good care based on a resident’s sexual orientation or gender identity violates the right to be free from abuse.
  • The right to privacy includes the right to private communications, whether in-person or through electronic or any other means. The facility must also maximize the resident’s right to privacy about his body and his medical, personal and financial matters.
  • The facility cannot restrict the right of a resident to receive visitors based on gender identity or sexual orientation. This issue comes up when a facility treats same-sex spouses or same-sex domestic partners different than different-sex couples.
  • The right to participate in activities includes taking part in events of a religious, community, or social nature within and outside the facility. The staff cannot prevent you from taking part because of your sexual orientation or gender identity. You should be allowed to be involved in and promote LGBT events, support groups and other resources without concern about abuse or discrimination.
  • The guarantee of respectful treatment includes dignity, respect, and consideration and being allowed to make your own decisions. This right also mandates you be addressed by your preferred pronoun and wear clothing and groom yourself, according to your gender identity.
  • The right to participate in your care, includes designating someone as your decision-maker for medical, financial and other matters. Federal law protects the right to name your same-sex spouse as your legal representative. The nursing home must treat a same-sex spouse decision-maker the same as a different-sex spouse legal representative.
  • The right to be fully informed protects a same-sex spouse’s right to the same information as a different-sex spouse.
  • Your right to make your own choices includes what you wear and how you express yourself. You can choose to share a room with the person of your selection, as long as both people agree. The facility cannot discriminate on the basis of gender identity, sexual orientation, or marital status.
  • The right to remain in the home bans the facility from discharging a resident on the basis of sexual orientation or gender identity.

Federal law orders nursing home staff to protect all residents from abuse and neglect, and to promptly report and investigate allegations of mistreatment. You can also contact your state’s ombudsman for long-term care to advocate for you.

An elder law attorney near you can explain if and how your state’s regulations may differ from the general law of this article.

References:

Other articles you may find interesting:

Florida’s Troubled Guardianship Program

Expressing Your End-of-Life Wishes

How Can Beneficiary Designations Wreck My Estate Plan?

Beneficiary designations
Review and update your entire estate plan – including beneficiary designations – to avoid unintended consequences.

It’s not uncommon for the intent of an individual’s will and trust to be overridden by beneficiary designations that weren’t chosen carefully.

Some people think that naming a beneficiary should be a simple job, and they try to do it themselves. Others don’t want to bother their attorney with what seems like a straightforward issue. A well-intentioned financial advisor could also complete the change of beneficiary form incorrectly.

Beneficiary designations are often used for life insurance and retirement benefits, but more frequently, they’re also being used for brokerage and bank accounts. People trying to avoid probate may name a “payable on death” beneficiary of an account. However, they don’t know that doing this may undermine their existing estate plan. It’s best to consult with your attorney to make certain that your named beneficiaries are consistent with your estate planning documents.

Wealth Advisor’s “7 Ways That Beneficiary Designations Can Mess Up Your Estate Plan” lists seven issues you need to think about, when making your beneficiary designations.

Cash. If your will leaves cash to various people or charities, you need to make certain that sufficient money comes into your estate, so your executor can pay these gifts.

Estate tax liability. If assets do pass outside your estate to a named beneficiary, make certain there will be sufficient money in your estate and trust to pay your estate tax lability. If all your assets pass by beneficiary designation, your executor may not have enough money to pay the estate taxes that may be due at your death.

Protect your tax savings. If you have created trusts for estate tax purposes, make sure that sufficient assets flow into your trusts to maximize the estate tax savings. Designating individuals as beneficiaries instead of your trusts may defeat the purpose of your estate tax planning. If there aren’t enough assets in your trust, the estate tax provisions may not work. As a result, your heirs may eventually end up paying more in taxes.

Accurate records. Be sure the information you have on the change of beneficiary form is accurate and up-to-date. This is particularly important if the beneficiary is a trust—the trust name, trustee information and tax identification number all need to be right.

Spouses as beneficiaries. Many people name their spouse as the primary beneficiary of their life insurance policy, followed by their trust as the secondary beneficiary. However, this may defeat your estate planning, especially if you have children from a first marriage, or if you don’t want your spouse to control the assets. If your trust provides for your surviving spouse on your death, he or she will be taken care of from the trust.

No last minute changes. Some people change their beneficiary designations at the last minute, because they’re nervous about assets flowing into a trust. This could lead to increased estate tax payments and litigation from heirs who were left out.

Qualified accounts. Don’t name a trust as the beneficiary of qualified accounts, like an IRA, without consulting with your attorney. Trusts that receive such qualified money need to contain special provisions for income tax purposes.

Here’s one not in the article, but I find myself advising clients about it frequently:

Family harmony. Some people with multiple children name just one child as the beneficiary on bank or investment accounts, relying on verbal assurances or “family agreements” that the child will share the inheritance with his or her siblings. It’s fast and easy. But there’s no legal obligation for that child to do so – that money becomes 100% his or her when the parent dies. And, even worse, it becomes available to every creditor that child may have, or it could be lost in a divorce if mixed with joint assets, or if that child dies shortly after inheriting the asset, it could end up going to his or her spouse instead of the siblings. The truth is, most children who inherit an asset won’t share the way the parent thinks they will. If you want all of your children to inherit something, name each one separately.

Be sure that your beneficiary designations work with your estate planning, rather than against it.

Reference: Wealth Advisor (October 8, 2019) “7 Ways That Beneficiary Designations Can Mess Up Your Estate Plan”

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Smart Second Marriage Planning Tips

Using a Trust for Your Children’s Inheritance Plan

What’s the Difference Between a Quitclaim Deed and a Warranty Deed?

A quitclaim deed provides no protection to the buyer
A quitclaim deed provides no protection to the buyer.

When you buy, sell, or transfer ownership of a property to another, you need to be aware of what type of deed a property has and whether to use a quitclaim deed or a warranty deed when you transfer your interest in a property to someone else.

Bankrate explains in its recent article, “Quitclaim vs. warranty deed: What you need to know,” that a quitclaim deed is a deed that transfers the actual legal rights to a property (if any exist) that the grantor has to another person. That is, without any representation, warranty, or guarantee. A quitclaim deed gives no guarantee of the title status of a property, any liens against it, or any encumbrances. It really means that you get only what a grantor may have—nothing more. Therefore, if the grantor has nothing, you get nothing.

A quitclaim deed may work well if the grantor indeed has the legal rights to a property, and there are no liens.

Quitclaim deeds are used in safer situations where there’s little question about the ownership interest in a property. They can be used when a person is transferring ownership of real estate to family members. However, a warranty deed is generally used in more complex situations, including when someone is getting a mortgage to buy a home.

With a warranty deed, the seller is guaranteeing that she has a legally defensible ownership interest in the property and can transfer her ownership interest to the buyer.

Warranty deeds are the wiser option when you’re purchasing property. Buyers want to be certain that you own the property, so they want you to sign a warranty deed. If you don’t actually own the property, the buyer can sue for a breach of warranty.

If you’re transferring property to your spouse, child, or your revocable trust agreement as part of an estate plan, a quitclaim deed may be just fine because it accomplishes the change of ownership, but you’re not providing any warranty for the transaction.

Generally, all real estate transactions that are arm’s length transactions should use warranty deeds.

Don’t just rely on a simple fill-in-the-blank quitclaim deed. The deed is actually the least of your concerns; transferring real estate has many income tax, estate tax, gift tax, estate planning, and Medicaid planning implications to the grantor and the grantee. Talk with an estate planning or real estate attorney before potentially making a costly mistake.

Reference: Bankrate (September 4, 2019) “Quitclaim vs. warranty deed: What you need to know”

Other articles you may find interesting:

Titling Property Correctly for Your Estate Plan

What Happens When Real Estate Is Inherited?

How Will Jeffrey Epstein’s Estate Be Settled?

Jeffrey Epstein
Jeffrey Epstein

Jeffrey Epstein’s last will and testament is dated August 8—just two days before he was found dead in a jail cell. Whether he killed himself or not [insert your favorite Facebook meme here :)], he left a big mess. His estate is estimated to be worth $577 million, including fine arts and collectibles that are still to be valued. Epstein also created a revocable living trust for his property.

CNBC’s recent article, “Here’s why a bitter legal battle could be ahead for Jeffrey Epstein’s estate,” reports that a lengthy fight is coming as Jeffrey Epstein’s estate addressees the legal claims over the distribution of his assets. The 66-year-old was facing federal charges of sex trafficking of minors and sex trafficking conspiracy.

Attorneys believe there will be a long legal fight, as alleged victims file claims against the money manager’s estate. The Epstein estate will be in the middle of lawsuits for a long time – until all of the plaintiffs are paid.

Let’s look at some the issues that heirs, plaintiffs, and attorneys will face.

  1. Creditors get paid first. Jeffrey Epstein’s will tells his executor to pay from the estate several costs, including funeral and burial expenses, administration costs and “all of my debts duly proven and allowed against my estate.” The will then directs the executor to give all of his property after these payments and distributions to The 1953 Trust, which was also established on August 8. The trust distributions aren’t known, because the trust document wasn’t attached to the will.

This means creditors, including plaintiffs of the many lawsuits against Epstein who receive a judgment in their favor against the estate, will be paid before property passes through to the heirs.

  1. All trusts are not equal. Some trusts may provide creditor protection, but not all trusts offer the same level of protection. Irrevocable trusts can’t be changed by the grantor once they’ve been established. When you transfer the assets to this trust, they’re out of your estate and you save on taxes at death. You’ve given up control of the asset—that’s why these trusts offer creditor protection. However, revocable trusts can be revised by the grantor during his or her life. Because the terms can change, the assets are still deemed to be owned by the grantor—making them subject to estate taxes and seizure from creditors.

You don’t save on estate taxes when you create a revocable trust, and Epstein’s trust is revocable. And, although moving assets to an irrevocable trust may protect them from creditors, it won’t work if you’re facing legal claims.

  1. Where you live is key. Jeffrey Epstein was a resident of St. Thomas in the U.S. Virgin Islands, but his will mentions five properties, including a mansion in New York City. The other properties, all owned by corporations of which he owns shares, are in New Mexico, Florida, Paris and the Virgin Islands. New York is known to chase down well-to-do residents who claim to live in tax-free havens. They conduct non-residency audits and hit them with taxes. Big estates can mean a lot of revenue for New York.

There is a chance New York could seek its share of state income and estate taxes. Where you live is answered by looking at facts and circumstances, including voter’s registration, driver’s license and the location of family and belongings. Just spending 183 days in your “new” state alone, isn’t sufficient to protect it from an audit from a high-tax state.

Reference: CNBC (August 24, 2019) “Here’s why a bitter legal battle could be ahead for Jeffrey Epstein’s estate”

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Amy Winehouse’s Ex Filing a $1 Million Claim

What Happens to Eddie Money’s Money?

How Does the IRS Know if I Gift My Grandchildren Money?

IRS gift of money
It’s pretty simple to avoid paying gift tax, so it doesn’t seem worth the risk of getting caught trying to bend the rules.

A recent nj.com recent post asks, “Will the IRS know if I gift money to my grandchildren?” The article explains that federal and state tax agencies do not have any direct way of knowing how much is being gifted. They rely on taxpayers self-reporting gifts. It’s the honor system.

However, the tax authorities may discover this if you or the recipient are audited, if they match transactions reported for certain assets, or when banks report cash transfers in excess of $10,000. Since it’s pretty simple to avoid paying gift tax, it doesn’t seem worth the risk of getting caught trying to skirt the rules. Understanding the gift tax is the best way to avoid issues.

The IRS stipulates that a gift is “the transfer of property by one individual to another, while receiving nothing, or less than full value, in return.” A gift is never taxable to the recipient, so only the person making the gift has to consider the gift tax.

The amount you can give will not be subject to gift tax if the gift amounts are less than the annual and lifetime exemptions. The annual gift exemption is currently $15,000 per recipient, which means that you can give up to $15,000 each year to an unlimited number of people with no reporting requirement at all.

You’re supposed to complete a U.S. Gift Tax Return (IRS Form 709) if you exceed the exemption, but don’t panic. Although you are required to file a gift tax return, it is highly unlikely any gift tax will be due.

That’s because gifts in excess of the annual exemption offset your lifetime exemption ($11,400,000 per person in 2019), before any gift tax is due.

The IRS can impose penalties if you they discover that you failed to file a gift tax return, even if no gift tax was due. Also note that the gift tax is integrated with the estate tax, which applies to amounts transferred upon your death in excess of your remaining lifetime exemption.

If you’re planning on making a gift to help pay another’s college costs or medical expenses, make the payment directly to the educational or healthcare institution because that payment isn’t considered a gift.

Ask your estate planning lawyer about any state gift, estate and inheritance taxes.

Reference: nj.com (October 1, 2019) “Will the IRS know if I gift money to my grandchildren?”

Other articles you may find interesting:

Roth IRA Tips and Tricks

How Do Transfer on Death Accounts Work?

Savings Bonds Pitfalls

U.S. Savings Bonds
U.S. Savings bonds (War bonds) have been around since 1941. While few people invest in them now, your parents may own them and they can present some problems at death.

Do you or a loved one own savings bonds? If so, you might want to read this article because you may not know about some of the problems they can create.

For younger people who might not know what a savings bond is, it’s a debt instrument secured by the U.S. government. A debt instrument, also known as a bond, is evidence that you loaned the bond issuer money and are entitled to receive interest and, eventually, the return of the money you loaned. These particular bonds are issued in small amounts, from $25 to $10,000 to individuals.

They were first issued in 1941. At that time, they were called “war bonds” and patriotic advertising was used to induce people to buy them. War bonds – bonds issued by the federal government to help pay for wars, have actually been around since the beginning of our country. But, unlike previous wars, after WWII the bonds never went away; they just got a new name. For a long time, they were very popular gifts for birthdays and weddings, and many large employers offered employees the option to buy savings bonds with part of their paychecks. But their popularity has declined over the years.

Savings bonds used to be issued as small paper certificates (actually, they were printed on card stock) which made them easy to give as gifts or to collect in a safe deposit box. But now they are only issued electronically. Savings bonds are very safe because the payment of interest is guaranteed by our federal government. Of course, because they are so safe, the interest rate on them is very low. When a paper savings bond matures, the holder can cash them in at a local bank (called “redeeming”). Taxes on the interest are due in the year the bond is redeemed.

So, many people over the age of 60 have these paper savings bonds lying around – in desk drawers, in safe deposit boxes, under mattresses, or even stuck in books and in other hidey-holes around their homes. They may be registered in the name of one individual, joint with one or more co-owners, or in the name of an individual with a named beneficiary. If a joint owner or beneficiary is alive when an owner dies, there’s no problem. Just submit some paperwork to get the bond re-issued (electronically) in the correct name. But if the bond is only in the deceased person’s name, or everyone named on the bond is deceased, things get a bit trickier.

Treasurydirect.com has all the rules and forms needed, but the bottom line is that the bonds are subject to your state’s probate laws. If no probate for the rest of the estate is needed under state law and the total redemption value of all the bonds is less than $100,000, you can likely work directly with the Treasury Dept. Otherwise, the bonds will go through your state’s probate process.

Most people try to avoid probate, if they can, to make things easier on their loved ones. So, is there a way to avoid a potential probate if someone owns paper savings bonds? Perhaps. But every change to a paper savings bond now requires that the owner open an online account. Many older people aren’t comfortable with this.

To add a beneficiary, paper bonds can be converted to electronic bonds, and a beneficiary can be named once the bond shows up in the online account. To add a joint owner or change the owner to a revocable living trust – same process, except the Treasury Dept. considers that a change of ownership, and the current owner will owe taxes that year on all the interest accrued to the date of the ownership change. The same goes for ownership changes due to divorce.

And here’s the fun part – the IRS requires YOU, the owner, to keep track of all of that because when you do eventually redeem paper bonds where ownership was changed (maybe years ago), the 1099 you receive from the Treasury will show all of the interest from the original issue date to the final redemption date – and the IRS will be looking for the tax due on the entire amount! And do-it-yourself tax preparation programs, such as TurboTax, don’t have the capability to deal with explanations to the IRS about taxes already paid (as I found out the hard way when I did my Mom’s taxes).

The treasurydirect.com website has a ton of useful information and all the forms you’ll need. Savings bonds certainly serve a purpose for risk-averse investors, but just be aware that the paper form of these bonds can create some headaches. Ask your parents now whether they own any savings bonds – and where they are and whose name is on them – so you don’t have a potentially nasty surprise later on.

Other articles you may find interesting:

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Naming a Trust as the Beneficiary of an IRA

IRA beneficiary form
Sometimes naming your trust as the beneficiary of your IRA is a great idea. Sometimes it’s not.

A frequently used strategy to save for retirement is an IRA. This money is saved to fund retirement, but there’s always the possibility that you’ll die before all the money is withdrawn. That means you must plan for what happens to that money after you are gone. Designating a trust as your IRA beneficiary is one option. It provides you with maximum control over the distribution of your assets after you die.

KTVA.com’s recent article, “How to Name a Trust as Beneficiary of an IRA,” discusses some of the important elements of naming a trust as an IRA beneficiary. Naming a trust as a beneficiary requires careful planning, so work with an experienced estate planning attorney.

Naming a trust as the beneficiary of your IRA gives you much more control over the funds because trusts use written instructions for how and when the money should be paid out. Designating a trust as the beneficiary of an IRA also lets you enjoy the tax benefits of an IRA while still maintaining maximum control of funds.

This is also a good move for a person who wants to leave her IRA to a beneficiary who may need some additional direction, like a minor child, a spendthrift child or spouse, or a person with special needs. Naming a trust as your beneficiary also shields the funds from creditors—a great estate planning strategy if your state doesn’t protect inherited IRAs.

However, naming a trust as a beneficiary of your IRA probably isn’t the best choice if you want your retirement savings to go to your spouse. Spouses who inherit IRAs are able to roll the deceased’s IRA into their own IRA account, tax-free. If you want your spouse to inherit your IRA with no strings attached, designate your spouse as the primary beneficiary of your IRA.

There are several requirements that must be met when designating a trust as the beneficiary of your IRA. They include the following:

  • It must be a valid trust under state law;
  • The trust must be irrevocable (or become so upon your death);
  • The trust’s beneficiaries must be individuals; and
  • The trustee must provide a trust document or certified list of beneficiaries to the IRA’s custodian or trustee by October 31st of the year after your death.

However, there are some drawbacks to doing this: the expense of structuring and maintaining the trust and designating a trust as the beneficiary of your IRA are much more complicated than simply naming a beneficiary of your IRA.

You also forfeit the ability for your spouse to roll over the IRA into his own IRA tax-free. This cancels out some of the tax benefits, because if you didn’t designate a trust as the beneficiary—and the IRA funds just rolled over—the tax-advantaged account would grow more quickly. But it also prevents your spouse from naming his new spouse or lover as the beneficiary on what used to be your IRA.

Keep in mind that just because a trust is named as the beneficiary of an IRA doesn’t mean the assets are transferred to the trust—they shouldn’t be. Instead, they should remain in the IRA to take advantage of the account’s tax benefits until distribution of the assets begins.

To set up a trust as the beneficiary of your IRA, you’ll need the help of a qualified estate planning attorney. Mistakes can be costly.

Reference: KTVA.com (July 15, 2019) “How to Name a Trust as Beneficiary of an IRA”

Other articles you may find interesting:

How Much Money Should I Provide My Child with Special Needs?

Using a Trust for Your Children’s Inheritance Plan

VA Pays Millions in Home Loan Refunds

VA Home loan form
Roughly 53,000 disabled veterans were mistakenly charged VA funding fees on their home loans.

Officials at the Department of Veterans Affairs said they reviewed 130,000 cases over the summer to look for errors. Many of these were simple clerical mistakes or disability ratings changes, after veterans settled on their loans.

The Military Times’ recent article entitled “VA refunds $400 million in mistaken home loan fees” explains that with the current regulations, veterans and service members must pay a VA funding fee when they apply for a VA home loan. This charge can be between 0.5 and 3.3% of the total loan. The money is supposed to pay some administration costs for the department. Disabled veterans are exempt from this fee.

However, an inspector general report released earlier in 2019 found that roughly 53,000 disabled veterans were charged these fees in recent years.

VA officials announced in May that they would review current and past loans, and contact veterans eligible for refunds.

In a statement, Veterans Affairs Secretary Robert Wilkie explained that the effort stretched back as far as 20 years. “Our administration prioritized fixing the problems and paid veterans what they were owed.”

The total amount of the payouts was significantly higher than the nearly $290 million total investigators estimated earlier this year.

The refunds ranged from a few thousand dollars to more than $20,000 for some vets.

Veterans Affairs officials also announced a new policy guidance for lenders to make certain that they’re asking veterans applying for the loans about their disability status. The VA also has created new internal processes for oversight over future loan applications which may be eligible for waived fees.

The Department of Veterans Affairs has also planned new outreach efforts to help get the word out to veterans about the waivers they’re eligible to receive.

VA officials said they believe that their review of the issue is now complete. However, any veterans who think they may be entitled to a refund for mistaken fees can contact the department’s regional loan center office at (877) 827-3702 or visit the VA’s website for more information.

Reference: Military Times (October 8, 2019) “VA refunds $400 million in mistaken home loan fees”

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