Military Pension/Social Security/Inheritance/Long Lost Grandmother

[Gator By Marriage]

Should you EVER take Social Security payments early?

According to a new study by Schroders, 40 percent of people plan to start taking the benefits between the ages of 62 and 65 - leaving them short of qualifying for their full retirement benefits.

www.dailymail.co.uk

The most likely negative outcome for SS is not that they’ll stop paying it - that’s political suicide. No, they’ll “means test” it, starting out with folks like Buffett and Gates. It won’t take them long to get to most of the middle class.

 

[BMF]

Should you EVER take Social Security payments early?

According to a new study by Schroders, 40 percent of people plan to start taking the benefits between the ages of 62 and 65 - leaving them short of qualifying for their full retirement benefits.

www.dailymail.co.uk

Brad's thread discussing his mom and dad's situation was pretty eye opening. I'm healthy AF for my age, but unless I'm still working for whatever reason, I think I'm taking it at 62.

One of my issues is that when I was on the Jacksonville Fire Department I didn't pay SS tax (on my FD income). I paid it on my side gigs (paramedic off-duty job and Navy/CG reserves) but it was too little to count towards my years of credits (the amount changes every year, I think it's now somewhere just over $20K/year now) but you have to have 30 years of "credit" (making at or over that minimum income) or they will dock your SS payments - if you receive a pension. I fall into that category. I think I still need about 5 or 6 years of credits to hit 30 creditable years.

 

[BMF]

The most likely negative outcome for SS is not that they’ll stop paying it - that’s political suicide. No, they’ll “means test” it, starting out with folks like Buffett and Gates. It won’t take them long to get to most of the middle class.

It's going to be interesting to see what they do - at some point in the very near future (within 5-10 years) they (politicians?) are going to have to make a few drastic moves. I think they're going to raise the minimum age at least 12-18 months, raise the SS tax at least 1%, and like you mentioned - they'll have some sort of "you make too much to collect your 'full share' of SS, so you will only get 75% of what you were supposed to get" or something along those lines. But the first two will definitely happen (and 'we', those of us approaching SS age likely be grandfathered-in, but I imagine if you were born in say, 1980 or later you're screwed).

 

[bradgator2]

Most of you bastards are old, so maybe you have already gone through all this... but the paperwork/energy required after someone dies is never ending. And honestly, I cant imagine a simpler life than my dads.

He had a very small checking account with Wells Fargo that his SS went into. This is the one where he withdrew all the cash. The balance was $2600 and my sister and I were beneficiaries. Let me tell you... Wells Fargo really stonewalled coming off it and closing the account. Really bizarre and consumed way more time than it should have.

And we are stilling dealing with paperwork after my mom's death over 3 years ago. Her and her brother were 50/50 on a deed to the family farm. That part was easy. However, they pulled a little bit of oil money through an oil contract. Getting them to stop sending my dead mom checks took forever. Then obviously there was no way to cash them. So they have to be cancelled and re-issued into an estate. Sounds easy. Takes years.

 

[CDGator]

Try working with the VA getting enrolled for medical care in the midst of an illness! There are 8 kids in Seedy’s family and everyone had a role in making it happen for his dad. There is no way a sick person could tackle it alone and get the help they need. All the hoops you have to jump through are exhausting on top of the Dr appointments. Criminal!

They called ALS a service related illness even 50 years later so they covered all related expenses.

 

[LagoonGator68]

Most of you bastards are old, so maybe you have already gone through all this... but the paperwork/energy required after someone dies is never ending. And honestly, I cant imagine a simpler life than my dads.

He had a very small checking account with Wells Fargo that his SS went into. This is the one where he withdrew all the cash. The balance was $2600 and my sister and I were beneficiaries. Let me tell you... Wells Fargo really stonewalled coming off it and closing the account. Really bizarre and consumed way more time than it should have.

And we are stilling dealing with paperwork after my mom's death over 3 years ago. Her and her brother were 50/50 on a deed to the family farm. That part was easy. However, they pulled a little bit of oil money through an oil contract. Getting them to stop sending my dead mom checks took forever. Then obviously there was no way to cash them. So they have to be cancelled and re-issued into an estate. Sounds easy. Takes years.

You need a lawyer friend and a will.

 

[bradgator2]

You need a lawyer friend and a will.

Both parents had a very simple and clear will. It dont matter. Everything still goes to probate, takes minimum 6 months, and lawyers take their cut.

Listed beneficiaries on any money accounts is an absolute must. Should be immediate dispursment and they trump any will. Plus, lawyers are bypassed. You just better make sure the beneficiaries are up to date

I've been told a "trust" is basically the same process as a will... except the lawyers are involved/paid before you die, instead of afterwards. But I have not verified that.

 

[FireFoley]

Both parents had a very simple and clear will. It dont matter. Everything still goes to probate, takes minimum 6 months, and lawyers take their cut.

Listed beneficiaries on any money accounts is an absolute must. Should be immediate dispursment and they trump any will. Plus, lawyers are bypassed. You just better make sure the beneficiaries are up to date

I've been told a "trust" is basically the same process as a will... except the lawyers are involved/paid before you die, instead of afterwards. But I have not verified that.

I just went thru the same thing with my mother in PBC. That county is a nightmare. She did not have much, a very simple will and not a lot went to probate. But it does not matter. Anything in probate is a hassle. Agree to POD all your bank accounts and TOD all your other financial and brokerage accounts. You can even do it with a home via a certain type of deed. My experience taught me to avoid probate all all costs.

 

[bradgator2]

I just went thru the same thing with my mother in PBC. That county is a nightmare. She did not have much, a very simple will and not a lot went to probate. But it does not matter. Anything in probate is a hassle. Agree to POD all your bank accounts and TOD all your other financial and brokerage accounts. You can even do it with a home via a certain type of deed. My experience taught me to avoid probate all all costs.

Agree 100%

Really interesting you mention the home/deed. I just heard about that for the 1st time last week. I had an older coworker place his adult children on a "special warranty deed". I thought that was pretty damn clever.

 

[Altitude Gator]

Agree 100%

Really interesting you mention the home/deed. I just heard about that for the 1st time last week. I had an older coworker place his adult children on a "special warranty deed". I thought that was pretty damn clever.

It's not very clever all, but done all the time. My FIL did it for his children and when he dies, they are going to get hit with a huge tax bill for the paid off home.

Better to put the property in a trust and name the kids as the beneficiaries. They they "inherit" his basis.

There is a good reason estate attorneys make money before or after death. A good one will keep a bigger chunk of the deceased's earnings/estate out of the hands of the government.

And, BTW, a "special warranty deed" is only different from a general warranty deed in one way - it limits the warranties of title to encumbrances incurred during the grantor's ownership - so in this scenario, it is not particularly helpful. A quit claim deed would have accomplished the same thing - adding the kids to title (likely as joint tenants so they become owners without the deceased's estate upon death) - and the huge tax burden.

 

[bradgator2]

It's not very clever all, but done all the time. My FIL did it for his children and when he dies, they are going to get hit with a huge tax bill for the paid off home.

Better to put the property in a trust and name the kids as the beneficiaries. They they "inherit" his basis.

There is a good reason estate attorneys make money before or after death. A good one will keep a bigger chunk of the deceased's earnings/estate out of the hands of the government.

And, BTW, a "special warranty deed" is only different from a general warranty deed in one way - it limits the warranties of title to encumbrances incurred during the grantor's ownership - so in this scenario, it is not particularly helpful. A quit claim deed would have accomplished the same thing - adding the kids to title (likely as joint tenants so they become owners without the deceased's estate upon death) - and the huge tax burden.

Very interesting Altitude. Thanks for your insight!

 

[LagoonGator68]

It's not very clever all, but done all the time. My FIL did it for his children and when he dies, they are going to get hit with a huge tax bill for the paid off home.

Better to put the property in a trust and name the kids as the beneficiaries. They they "inherit" his basis.

There is a good reason estate attorneys make money before or after death. A good one will keep a bigger chunk of the deceased's earnings/estate out of the hands of the government.

And, BTW, a "special warranty deed" is only different from a general warranty deed in one way - it limits the warranties of title to encumbrances incurred during the grantor's ownership - so in this scenario, it is not particularly helpful. A quit claim deed would have accomplished the same thing - adding the kids to title (likely as joint tenants so they become owners without the deceased's estate upon death) - and the huge tax burden.

Clarification- If kids are on deed at parents death they are saddled with parents original purchase price basis. If they inherit the home their basis is the value of the home on the day they inherit it…..huge difference for tax purposes

 

[Altitude Gator]

Clarification- If kids are on deed at parents death they are saddled with parents original purchase price basis. If they inherit the home their basis is the value of the home on the day they inherit it…..huge difference for tax purposes

Correct. I am not an estate lawyer (I am a RE and BK lawyer that runs a title company), but have looked into this extensively to try to convince my FIL to work with his kids to change is estate planning techniques - even to the point of getting his financial advisor to tell him the same thing. He is stubborn about doing anything that goes against what he thought was the best thing at the time he did it. And it is going to cost his kids taxes he doesn't want to pay.

 

[CDGator]

Mom moved to KY and eventually went into a nursing home. Her house in FL went into a trust but it was complicated. Her common law husband stayed in the house. The agreement written up by the attorney was that he could stay in the house for $1/year. If he was out of the house for more than 90 days, we could sell it. He would pay electric and water and mom would pay expenses and insurance. Since he had prostate cancer and was 10 years older, nobody expected him to survive her. Fast forward to mom passing away and her estate being distributed to the three kids. She did not leave funds for maintaining the house so we had to continted to pay property taxes and insurance for a few years after. Her “husband” sadly fell and was out of the house for 6 months. We contacted his kids about buying the house from us. They could have but chose not to. He sadly was very angry at me over it all because we were the closest.

I’m thankful mom had all her assets in a trust. Everything went according to the will and was settled quickly even though the house situation sucked, but it was what mom wanted. I called him in June but it was an awkward conversation.

 

[Bushmaster]

Gift the house to your heirs and retain a life estate. Upon death, the value of the house rolls into the estate for calculation of whether you have a taxable state. Life estate dies upon death and kids get a step up n basis to fmv.

Trusts are expensive and are not necessary.

 

[Nalt]

Mrs. Nalt and her brother jointly inherited their parent's house and land when their mother passed away last January. Her brother said to have the deed put in our (Mrs. Nalt's) name and when we make a decision to either move into it or sell it, to pay him half of the appraised value. The appraisal was done so we know how much we will have to pay him. Now, he is going out and buying expensive things like a Kubota side-by-side, a very expensive attachment for his Kubota tractor, etc. plus his wife, who was working fulltime, has quit her job and doesn't do any gainful work but he has been pressuring us to go get a mortgage so he can pay off his fun stuff. I'm not inclined to be in a hurry just so he can continue having fun at our expense.

 

[g8r.tom]

Is it really your expense? He is owed half, correct?

Now if your not ready to move and they are pressuring you, well thats not the original deal. Don't be in a rush for them for that.

 

[Detroitgator]

Mrs. Nalt and her brother jointly inherited their parent's house and land when their mother passed away last January. Her brother said to have the deed put in our (Mrs. Nalt's) name and when we make a decision to either move into it or sell it, to pay him half of the appraised value. The appraisal was done so we know how much we will have to pay him. Now, he is going out and buying expensive things like a Kubota side-by-side, a very expensive attachment for his Kubota tractor, etc. plus his wife, who was working fulltime, has quit her job and doesn't do any gainful work but he has been pressuring us to go get a mortgage so he can pay off his fun stuff. I'm not inclined to be in a hurry just so he can continue having fun at our expense.

 

[bradgator2]

I am more in shock that half a trailer in Alabama is worth a nice Kubota tractor.

 

[Bernardo de la Paz]

Her brother said to have the deed put in our (Mrs. Nalt's) name and when we make a decision to either move into it or sell it, to pay him half of the appraised value. The appraisal was done so we know how much we will have to pay him.

If you are going to sit on this decision for awhile, you should have it reappraised and pay half at that time.

It might have been more appropriate for you to post this in ADG's am I the azzhole thread.