Planning for Life

Beware the Missing Schedule of Beneficiaries for your Nominee Realty Trust

Posted by Harry S. Margolis on April 14, 2021

By Harry S. Margolis


If you have a nominee realty trust, make sure you also have a copy of the schedule of beneficiaries. We can't tell you how many times we've found these schedules missing, meaning it's not clear who owns the property.

What is a Nominee Realty Trust?

To understand what this is all about, you need to know something about nominee realty trusts. These are devices used almost exclusively in Massachusetts to hold title to real estate through which the trustees act as agents for the beneficial owners whose names are not listed on the deed. They are also not listed in the trust document; instead, they are listed on a separate schedule of beneficiaries which is not recorded at the registry of deeds (which is why they often go missing).

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Topics: nominee realty trust, schedule of beneficiaries

Appeals Court Clarifies Standards for Rogers Decisions

Posted by Harry S. Margolis on April 5, 2021

By Harry S. Margolis


A recent Massachusetts Appeals Court case clarifies the law around the administration of antipsychotic medications to individuals under guardianship pursuant to Rogers determinations. In accordance with the Rogers case, guardians may order the administration of antipsychotic drugs only after a so-called "substituted judgment" determination that the person under guardianship, were she competent, would agree to take the medication.

In other words, the question is not what is in the individual's best interest. Instead, the goal of the proceeding is to preserve the individual's right to self-determination and in effect to make her own health care decisions.

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Topics: guardianship, Rogers decisions

Check Your Retirement Plan Beneficiary Designations!

Posted by Harry S. Margolis on April 1, 2021

By Harry S. Margolis
Yes, I know, checking your retirement plan beneficiaries is tedious, but if you haven't done so recently (let's say, in the last five years), now's the time. This applies to all your retirement plan accounts, whether 401(k)s, 403(b)s, or IRAs. Your circumstances or those of your named beneficiaries may have changed, meaning that you need to adjust who you name as beneficiaries of your plans.
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Topics: Retirement Benefits, life insurance

Which Spouse is the "Spouse" in the Trust?

Posted by Harry S. Margolis on March 23, 2021

By Harry S. Margolis


A recent Texas case, Osche v. Osche, shows the benefit of using names when drafting rather than terms such as "spouse." In 2008, Amanda Hurst Ochse created an irrevocable trust for the benefit of her son, William W. Ochse III, his children, and his "spouse." For almost 30 years, he had been married to Cynthia Cadwallader Ochse. However, they got divorced in 2012 and in 2015, William married Carol Osche.

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Topics: irrevocable trust, rules of construction

Nursing Homes Crisis: Pandemic Deaths and 5-Star Ratings

Posted by Harry S. Margolis on March 18, 2021

By Harry S. Margolis


As described in an article in Next Avenue, nursing homes have evolved over the years from alms houses for the poor to today's skilled nursing facilities. At the same time, they've also evolved from homelike settings to be more like hospitals. At the same time, in recent decades, we've seen the huge growth of the assisted living industry which attempts to be more homelike, often aspirational, with luxurious common areas.

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Topics: nursing homes, assisted living, skilled nursing facility

Some Biden Tax Proposals I Can Support

Posted by Harry S. Margolis on March 9, 2021

By Harry S. Margolis


Last week, I wrote about the reasons I disagree with President Biden's proposal to eliminate the step-up in basis. Here I'll discuss some other tax proposals he has which I can support.

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Topics: income taxes, capital gains taxes, estate taxes

3 Reasons I Disagree with Biden on the Step-Up in Basis (But Support His Other Tax Proposals)

Posted by Harry S. Margolis on March 2, 2021

By Harry S. Margolis


As a candidate, President Joe Biden proposed getting rid of the "step-up" in basis. This is a provision that erases capital gains upon the death of the owner. Here's how it works:

What's a Step-Up in Basis?

Let's say you bought some stock for $20,000 and today it's worth $50,000. If you were to sell the shares for this amount, you would have to pay tax on capital gains of $30,000. The purchase price is the stock's "basis." The gain is the difference between the proceeds and the basis.

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Topics: capital gains taxes, estate taxes, step-up in basis

Free Britney! Why Her Conservatorship is Inappropriate

Posted by Harry S. Margolis on February 23, 2021

By Harry S. Margolis


Britney Spears is 39 years old and capable of earning tens of millions of dollars a year. Yet, as exposed in the recent New York Times documentary, "Framing Britney Spears," against her wishes, her father, James Spears, has served as her conservator for the past 13 years. At a February 11th court hearing at Los Angeles Superior Court, Judge Brenda Penny continued the conservatorship but confirmed the addition of Bessemer Trust as co-conservator.

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Topics: conservatorship

Martha's Vineyard Senior Gets Home Back After Undue Influence & Fraud

Posted by Harry S. Margolis on February 16, 2021

By Harry S. Margolis


In Steere v. Steere (Mass. Sup. Ct., Dukes CA 2018-44, December 16, 2020), Superior Court judge Paul D. Wilson finds that a nephew and his wife used undue influence to defraud his 88-year-old aunt from her house in Oak Bluffs on Martha's Vineyard.

How It Went Down

Gloria Steere had lived in her house in Oak Bluffs since 1982. Despite having been in charge of accounting at Martha's Vineyard Insurance for 30 years, in 2012 and 2013, she became the victim of scammers and lost her life savings of approximately $800,000.

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Topics: undue influence

How Men Often Shortchange their Wives' Social Security Benefits

Posted by Harry S. Margolis on February 15, 2021

By Harry S. Margolis

Social-Security-retirement-benefits-elder-law-Wellesley-MA-02481According to a study by the Center for Retirement Research at Boston College, most men begin drawing on their Social Security retirement benefits at age 62 or 63, rather than waiting until their full retirement age or even age 70. The early receipt of benefits means that both the husbands and their wives will receive less each month than they would if they waited.

According to the study written by Steven A. Sass, Wei Sun, and Anthony Webb, this early election has no effect on average on the men. Though they will receive a smaller benefit check each month, this will be offset by receiving more of those smaller checks, the ones they get between the ages of 62 and normal retirement age. Of course, this is the average. Men who are in ill health would do better to take early retirement and men who expect to live a long time should postpone their receipt of benefits for as long as possible.

This is also basically true of single women, meaning on average they do about as well in terms of lifetime Social Security benefits no matter whether they start earlier and get more smaller checks or start later and receive fewer larger checks.

Wives' Benefit Levels Still Dependent on Mens'

But for today’s seniors, most wives’ benefits are based on their husband’s work record. (This is likely to change to some extent over time, but even before the pandemic, women were more likely to take time off from work to raise families than were men. The need to homeschool children during the pandemic has fallen most heavily on women, which will have long-term effects on their earnings and Social Security work records.) As a result, if husbands choose to take benefits before their full retirement age, their wives are penalized twice — first while their husbands are alive when their benefit is smaller, usually half of the husband’s benefit, and second when the husband dies (which often happens first due to women’s greater life expectancy) when they receive their husband’s smaller benefit rather than their own.

The Math

Some numbers can demonstrate how this works. Making them up, let's assume that a man's full Social Security benefit will be $1,000 a month at full retirement age, and $750 if he takes them at age 62, and $1,250 at age 70. At age 62, the average American man has a life expectancy of 20 years and the average woman of 23 years. Here's what our fictional man would receive in total from Social Security should he retire at various times and live to age 82:

Retirement Age Social Security Income
62 $180,000
66 $192,000
70 $180,000

Assuming the wife's Social Security benefit is half the husband's, she'll receive about half these amounts while they're both alive, so the husband's early retirement has little effect. The effect comes during the three years she's likely to outlive him. Here's what she'll get based on his retirement age:

Husband's Retirement Age Wife's Survivorship Benefits
62 $27,000
66 $36,000
70 $45,000

These numbers arguably understate the potential effect of the husband's early retirement for a number of reasons: First, these are low Social Security benefits. Second, they don't take into account the effect of annual CPI increases in benefits that will be bigger for the larger postponed retirement benefit. Third, many wives are younger than their husbands, so they survive them by more than the three-year average difference in life expectancies. Fourth, Social Security is an annuity that pays for your entire life, in effect insuring you from the risk that you'll live too long and outlive your other resources. The effect of a higher or lower Social Security benefit will be most felt by those who live longer than the average life expectancy.

Why Do Those Men Do It?

So, why do men do this? Are they cads? The researchers conclude that they are not, that instead they simply don’t understand the implications of claiming benefits early. More education may change their behavior, although the researchers note that “financial education has not been especially effective in changing behavior.” As an alternative, they suggest a number of potential policy changes, such as requiring spouses to sign off on the decision to claim Social Security before the beneficiary’s full retirement age.

Interestingly, while the Social Security Administration’s website has a number of excellent calculators to assist beneficiaries in deciding when to retire, none appear to calculate spousal benefits.  Based on the Boston College report, adding such calculators would be a good first step.

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