Estate and Probate Attorney in Cincinnati Ohio » Retirement Plans, Social Security, and Life Insurance

Am I Entitled to Any Benefits From My Spouses Employer?

admin — Tue, 29 Mar 2011 09:12:37 +0000

Frequently, employers will have death benefits as part of a retirement package. Additionally, insurance, health plans, and dental plans can sometimes be continued by a surviving spouse. This can be the case whether the employee died as an employee or...
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How is Life Insurance Collected?

admin — Tue, 29 Mar 2011 09:11:30 +0000

Life insurance is collected by contacting the insurance company who sold the life insurance policy. The insurance company will send a claim form which must be filled out and signed by the executor if payable to the estate or the designated beneficiary. The claim form must be returned with the insurance policy and a certified copy of the death certificate.

Under Ohio law, the insurance company has 30 days to make payment or they must pay interest. Sometimes the company will send you a check. Otherwise, it will send you a checkbook which you can write checks against until the insurance is used up.

What are My Rights to Social Security?

admin — Tue, 29 Mar 2011 09:10:43 +0000

A surviving spouse or dependent child may be entitled to social security benefits. The executor or spouse needs to contact the Social Security Administration to stop the decedent’s social security payments and to determine the rights of the spouse and minor children.

A surviving spouse may collect his or her benefit or the deceased spouse’s benefit, whichever is higher. The surviving spouse does not get both. Additionally, benefits can be paid to minor children under the age of 18, up to 19 if in high school, and any age if disabled before age 22.

How are Retirement Plans Collected?

admin — Tue, 29 Mar 2011 09:09:58 +0000

Retirement accounts and IRAs are not part of the probate estate unless the decedent failed to designate a beneficiary. If there is no named beneficiary or if the beneficiary is “my estate”, the retirement plan will pass per the terms of the will. Otherwise, the named beneficiary will receive the retirement asset. Retirement accounts and IRAs are paid directly to the named beneficiary outside of probate. They are subject to both estate taxes and income taxes. Because the beneficiary may be entitled to delay the payment of income tax, it is extremely important to consult with your attorney or tax advisor before you withdraw any money from the retirement account or IRA. There are very complex rules concerning the income tax aspect of these accounts.

How the IRA is taken and taxed first depends upon the type of beneficiary. A surviving spouse has more options including the ability to rollover the IRA into his or her own IRA and delay taking distributions until they reach age 70 ½. If any other person is the beneficiary, they may take a lump sum distribution and close out the inherited IRA or may set up a decedent IRA or beneficiary IRA and rollover the account into this new account. Once the decedent/beneficiary IRA is set up, a beneficiary may take distributions over their life expectancy or fasted if needed. There is no 10% penalty on distributions from a decedent/beneficiary IRA. However, distributions are subject to income tax.

Warning: These rules are complicated; you must get good tax advice to delay income taxes and to avoid penalties.